August 2012
Case
HBS Case Collection

Polar Sports, Inc.

Format:Print
| Language:English
| Pages:7

Abstract

Polar Sports, Inc. is a fashion skiwear manufacturing company in Littleton, Colorado. The company has a unique design for skiwear using a special synthetic material that improves insulation and durability. The ski apparel industry is highly competitive and the best way for companies to gain market share is by developing new fabrics and using innovative patterns. The firm generates over 80% of sales between September and January and relies on seasonal production to respond promptly to customer orders. During those months, the plant must rapidly increase production by hiring and training additional workers, often paying them overtime. The vice president of operations is concerned about the costs associated with seasonal production and presents a proposal to switch to level production. The change can reduce costs and improve efficiency but can also affect other aspects of company finance. Students must analyze potential cost savings and understand the financial risks involved before making a final recommendation. This case can be used in first-year MBA-level courses in finance or in advanced undergraduate finance courses.