Epsilon Products: Project PineAlpha

The case describes the efforts of Anna Wagner as the newly promoted president of Epsilon Products as she plans to launch a major diversification for the business. Epsilon is a unit of the much larger Sussex Corporation (a disguised company), a diversified luxury goods company. More recently Epsilon has set up a joint venture with a Philippine-based company, Acoba, to develop a bio-leather material to be used in a new line of bags and purses. While the products have been well received by customers, the bio-leather initiative code named Project PineAlpha, has not proven profitable given low production runs. In order to increase production volumes, Epsilon has just received board support to expand the joint venture and launch a line of products that would be sold outside Sussex stores, an unprecedented move for the company. Meanwhile, Wagner, who is just taking over as president of Epsilon, is not well known by Sussex's CEO and Chair. Wagner must decide how to roll out the new PineAlpha strategy, how to position and staff the new unit, and how to deal with the inevitable resistance to change from employees, both inside Epsilon but also Sussex overall.