Corning, Inc., Consumer Products Group

Abstract

Corning, Inc. is faced with a decision about what to do with one of its three business segments, Consumer Products, which has been performing below senior management's expectations. The case puts the student in the role of Marty Gibson, president of the Consumer Segment, who is provided with a variety of concerning potential solutions. The case can be used to discuss (1) industry structure, (2) core competence and its role in strategy and organization, and (3) organizational flexibility in contrast with mass production paradigms.

Excerpt

UVA-BP-0321

CORNING, INC., CONSUMER PRODUCTS GROUP

In 1989, Corning Glass Works became Corning, Inc., a company the Wall Street Journal called one “of a select few poised to lead business into the 90s.” The name change reflected many major changes for Corning in the 80s. Following a number of years of average, cyclical earnings, Corning's performance was so impressive in the 80s that a 1991 Business Week cover story featured the company as “a model of how aging U.S. manufacturers can reinvent themselves.”

Despite this corporate success, Marty Gibson, president of Corning's Consumer Products Group, was concerned about his group. Consumer Products' performance was well below the financial objectives given it by the corporation and paled in comparison with Corning's other groups—Specialty Products, Communications, and Laboratory Services. Gibson was looking at a return on equity (ROE) of 6-7 percent, 9 percent tops, and the possibility of recession. The corporate goal was 17 percent. Nevertheless, in one week, Gibson was to report to Corning's Executive Committee his recommendations for the future direction of the Consumer Products Group.

Gibson wanted to present a single course of action to the Committee. Moreover, the magnitude of the issue of making major changes in Consumer Products and the emotional charge it carried required that, not only he, but all Corning managers think clearly through the alternatives available to the group. Gibson had just returned from a meeting with senior Corning managers that he had called to encourage an open exchange of views on his group's strategy.

Gibson knew that he better be armed with a full understanding of the alternatives. He sat down to go over his notes on Corning, the other two product groups, and the views expressed at the meeting.

. . .

Keywords: strategy formulation implementation