Case Name :      KR Audio Electronics

Authors :           Joan Winn

Source :             North American Case Research Association (NACRA)

Case ID :            NA0125

Discipline :        International Business

Case Length :    18 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

This case illustrates the financial, strategic, and managerial challenges faced by a manufacturer of audio amplifiers and vacuum tubes in the Czech Republic. Eunice Kron became CEO of KR Audio Electronics when her husband, the founder of the company, died unexpectedly. From 1996 until her husband’s death in 2002, Eunice Kron had been only marginally involved in the business, writing letters, translating documents and answering phone calls. When her husband died, Eunice decided to manage the company herself, despite the skepticism of suppliers and customers. Eunice solicited payments and orders herself, and traveled to electronics tradeshows to learn about the industry and court potential buyers. KR’s engineering team continued its technology innovations and developed new products. In 2002 and 2003, the SARS epidemic, the U.S. involvement in the war in Iraq, and the devaluation of the dollar on the international currency market had an adverse impact on the company’s ability to sell its products. As losses mounted, Eunice was not sure how or if she should continue to keep the business afloat. In 2004, Eunice is faced with the decision of whether to hire a young man to help market KR’s products at the upcoming audio show in Las Vegas. Ultimately, she must decide how to proceed for the longer-term: should she continue to manage the company herself, try to find a partner, or sell out.