De Havilland Inc Case Study Essay example

1445 Words Feb 1st, 2012 6 Pages
Executive Summary:

The current problem with the De Havilland INC. case is awarding the bid to Marton who did not present their financial analysis as instructed in the bid. They came in with the lowest bid, which can be either a tactic just to get business and they hike their prices later, or they actually are that good at what they do. The decision has been made to go with Marton because of their lower prices and we will be able to see their financials when we do a site visit to their facility. One of the issues with this process is that De Havilland has lost some of the control in the bid process since Marton as put a time limit on the decision of 120 days. This makes it difficult for De Havilland to be able to negotiate with the
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De Havilland is focused on lowering our costs as we are clearly over paying for the flap shrouds and bay doors, we are also looking to move to a smaller base of vendors to permit each firm to capture economies of scale. We want fixed pricing for five years, which is what Marton is offering. This would eliminate constant negotiations on our part and the vendors part and we like the idea of having a firm fixed contract in place . There is also an issue with why Marton has given a 120 day acceptance period. This leaves little time to negotiate with the other two lower companies even if we wanted to. I feel as though this is not a big a deal to Marton as it is to us, making us feel like we’re less in power, when we should have full control.

Alternatives and/ or Options: There is a possibility that awarding the bid to Marton may not be the best decision so in thinking this, I have decided that the BATNA with Marton would be to award the bid to the next best supplier, DAS Composites. If we can negotiate a Five year deal with Das and maybe bring the costs down slightly, we’d still be doing better than we were when dealing with Dollard Plastics. I would think that this is a deal that Marton would want to take on, but if they did walk away from the deal we do have other options to consider and Das Composites prices are only 7% more than Marton. The problems that could arise from doing the deal with Marton are that since

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