American Connector Company

Executive Summary

Though ACC’s strategy of maintaining a high level of quality, customizability, and flexibility had served them well in the past, their cost structure was precarious in the face of a new, low-cost producer, DJC Corporation of Japan. Using highly efficient manufacturing techniques in their new Kawasaki plant, they were able to establish themselves as one of the lowest cost producers in Japan. If DJC were to enter the US market and build a plant similar to the one in Kawasaki, their low costs might be enough to quickly erode ACC’s market position.We recommend that ACC keep its focus on customization and flexibility, reorganize their factory to streamline the manufacturing process, upgrade technology to increase quality and yield, and more efficient labor organization. Additionally, ACC should seek to protect its competitive advantage in product design by bringing its proprietary designs in-house.

Competitive Threats to ACC

American Connector Company (ACC) and DJC Corporation of Japan have differing competitive strategies. While ACC focuses on product quality and meeting customer’s specific requests, DJC focuses on excelling in manufacturing techniques, adapting to user needs and design modifications. If DJC builds a new electrical connector plant in the United States, it poses a critical threat to ACC. Even though ACC has an advantage of having a more flexible production process used to cater to the high customization requests of its customers, they lag behind DJC’s manufacturing processes. DJC is able to operate at a high utilization at their Kawasaki plant by decreasing startup and shutdown costs operating 24 hours a day, seven days per week. They have also standardized their production line by eliminating variability, having longer production runs, and streamlining their facilities. Additionally, DJC is able to delivery customer orders daily. ACC’s flexible