Zoltek

In 1996 the St. Louis-based manufacturer Zoltek launched a massive expansion of capacity to produce commercial-grade carbon fiber, a composite material used to produce a wide variety of end products ranging from sporting goods to windmill blades. Zoltek's goal was to become the dominant firm in a market whose growth was expected to be spectacular starting in the late 1990s. This case describes Zoltek's major strategic moves in the mid-1990s and can be used to explore the economic logic of a major capacity commitment. The case provides a possible example of the Stackelberg leadership model from oligopoly theory.