Strategic Management
4th Edition
ISBN: 9781259927621
Author: Frank T. Rothaermel The Nancy and Russell McDonough Chair; Professor of Strategy and Sloan Industry Studies Fellow
Publisher: McGraw-Hill Education
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Chapter 8, Problem 2ESI
Summary Introduction
To explain: If there is a credible threat by Company NE in its annual pricing negotiations.
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As a purchasing manager for a manufacturer of domestic appliances you are to source the door seal for a new model of microwave oven. The component has caused problems in the past but the design problems have now been overcome. The market has been increasingly competitive and any problems with the new model could be disastrous. Preliminary sourcing indicates that permaseal Ltd has a substantially lower price than the other potential suppliers, including your current supplier Thermal bond Ltd. However, the last time you did business with permaseal was six years and at the time you experienced some quality and delivery problems.
REQUIREMENT
Explain in detail how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
As a purchasing manager for a manufacturer of domestic appliances, you are to source the door seal for a new model of a microwave oven. The component has caused problems in the past but the design problems have now been overcome. The market has been competitive and any problems with the new model could be disastrous. Preliminary sourcing indicates that Permaseal Limited has a substantially lower price than the other suppliers, including your current supplier Thermalbond Limited. However, the last time you did business with Permaseal Limited was six years ago and at the time you experienced some quality and delivery problems.
Required:
Explain in detail how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.
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Similar questions
- As a purchasing manager for a manufacturer of domestic appliances you are to source the door seal for a new model of microwave oven. the component has caused problems in the past but design problems have now been overcome. the market has been increasingly competitive and any problems with the new model could be disastrous. preliminary sourcing indicates that permaseal Limited has a substantially lower price than the other potential suppliers, including your current supplier Thermal Bond limited. however, the last time you did business with permaseal was six years and at the time you experience some quality and delivery problems. Explain in details how you would undertake this sourcing exercise in order to ensure that you select the best possible supplier for the long term.arrow_forwardScenario You work as the chief supply-chain officer at the large international corporation, NationaliTeas. NationaliTeas manufactures and sells tea worldwide. Its motto is “Keeping people and their taste buds awake (when they want to be awake).” Its mission is “Make the world more awake through rejuvenating and refreshing beverages and sustainable practices that uplift workers, communities, and souls. The company would like to establish an operational goal of having your corporation apply for a B Corp Certification within the next two years. 1. Based on the company evaluations for areas in need of improvements and strengths, propose four high impact initiatives to help strengthen the corporation's commitment to people, planet and profit. 2.Describe the organizational benefits of each initiative, specifically noting the expected positive impact of completing each. Examples of positive impacts include better alignment to the organization’s mission, vision, and culture statements; 3.…arrow_forwardThe president of your company has just told you that an Indian multinational company is interested in purchasing a large amount of the products that you and your group are responsible for. You have been charged with meeting with the team from India, hosting their visit, and negotiating the agreement, including pricing. How do you communicate during the meeting with your colleagues? What are some aspects of the social and business interactions that you will want you and your staff to avoid? What will you report back to the president regarding the meeting, and will you encourage her to take part in the meeting?arrow_forward
- What are examples of (1) consumer-driven and (2) seller/retailer-driven actions made possible through price transparency on the Internet?arrow_forwardb. If you were concerned about low income individuals having access to water, what type of pricing structure would you use in your municipality? Explain.arrow_forwardNike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate and manufacture the shoes it designs. Thus, the firm has a credible threat over its current outsourced manufacturers. If Nike has no intention of actually entering the manufacturing arena, is it ethical for the Nike supply chain management to bring up this credible threat during annual pricing negotiations? What are some reasons Nike may want to consider such a vertical integration more seriously?arrow_forward
- You are a newly appointed marketing manager of a multinational firm. The firm has the following market base: consumer market, business market, and international market. Its business products serve as a raw material for other businesses and thereby have a wide scope of its business frontier. It has challenges in segmentation although they produce quality products for various markets. Based on the above challenges facing the firm, it has also resulted in serious pricing decision problems, which are seriously affecting the firm’s profitability level. Meetings has been held both nation and international level to rectify some of these anomalies in the firm. Now, the head of corporate affairs has become worried of these pending challenges and has called for presentation from the head of the marketing. 1. Explain how to segment the following markets and its requirements: i. Consumer market. ii.Business market. iii. International market.arrow_forwardProcter & Gamble sells multiple brands often within the same product category (for example, P&G sells Tide, Cheer, Gain, Downy, and Ivory). The most likely explanation as to why P&G maintains separate brands (in the same product category) is because P&G's own research indicates that Offering different brands will eventually A result in competitors leaving the market. Big retailers (such as Wal-Mart, Target, and Amazon) will withhold shelf space unless В the firm develops exclusive brands just for them. P&G's marketing research indicates that there are many laundry detergent market segments and each of those segment is C apparently large enough, and will respond to, marketing efforts to develop a separate brand that will satisfy that segment's needs. Offering different brands in the same category allows P&G to bypass Anti-Trust/ Pro-competition laws.arrow_forwardConsider the challenge that Casper Mattress experienced in going against traditional distribution channels for its products. This can be likened to a “David versus Goliath” strategy—very high risk, but with potentially high rewards. As you consider a product or business that you would like to launch, Is there a nontraditional distribution opportunity that might challenge the conventional “industry” but create an innovative alternative to reach customers? Feel free to agree or disagree and explain why. If you agree, consider what is unique about your product that would allow you to disrupt traditional distribution channels and why nontraditional distribution would work for your product and not some other product.arrow_forward
- In your analysis of the South African market, would Nike be right to use price leadership. If yes why? If no why?arrow_forwardwhat are the advantages of price-fixing between competitors?arrow_forwardState whether each of the following statement is true or false and explain your answer. 2. A credible threat of forward integration reduces the value that buyers can capture from their sellers.arrow_forward
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