Introduction
Pegasus Technologies is a technology solutions provider, with an extensive team of devoted professionals. It is looking forward to manufacturing 8-inch touch-screen color LCD panels, which they expect to be of exceptional quality and high resolution. The company has for several years been recognized as the leading company in the manufacture of various lines of palm pallet computers. The capability of being touch screen is intended to ease its use since the user does not need to carry the keyboard as well as the mouse. It thus enhances its portability level, making it less bulky.
The company is not all blank. It has produced a variety of electronics including PT 9000 which has 200 megabyte hard-drive, 3-gigahertz processor and a removable DVD writer. It is a high quality machine and its design was influenced by the harsh environmental conditions. For the last three years of its operation, the company has experienced its efficiency and is reaping the high quality prestige in its industry. It has thus come to the decision of creating the machine, and to enhance uniformity, it requires choosing one company to be its supplier.
Problem Identification
The main aspect of the thesis is to choose the specific company Pegasus Technologies should entrust in the supply of the touch screens. After much research and consideration, the company has narrowed down its choices to four companies. They include Reese Corporation, Payne Industries, Kruger Corp and Capozzi Manufacturing. With careful consideration, the essay will come up with the best choice on the winning company in the supplier position.
Analysis
The analysis of this decision will include analyzing the pros and cons of each of the four companies and coming up with a solution that will enable total success of the project. It should enhance a good market for the company, as well as provide efficiency as well as maximum profitability.
Reese Corporations
Reese Corporations is the main manufacturer of the panels under consideration. With its large size, it means that it has the largest sales in a year, approximated to $6.5 billion. It has also existed for several years, since the early 1990s. Having and maintaining success throughout those years shows the loyalty it has created to its customers. It could also be interpreted as popularity. Partnering with the company as its suppliers would thus make Pegasus Technologies to acquire more customers (Heimeriks, Bingham, & Laamanen, 2015). It would thus succeed as a result of association as well as Reese’s influence. The company also charges $245 per unit, which is a fairly reasonable price.
However, partnering with Reese Corporations would require Pegasus to dig dipper into their pockets. Pegasus is only willing to spend half of what the Reese is willing to partner. This is $500 million per annum. It would thus be impossible for Reese to accept the small investment of $250 million per annum, offered by Pegasus Technologies.
Capozzi Manufacturing
Capozzi Manufacturing is the second company Pegasus has considered. It is rated second in the manufacture and sale of computer equipment in the area. Its last massive sales of $2 billon were largely as a result of monitor sales. The company does not give a high limit to the amount of investment it will participate in. The $250 million per annum thus seems to be a good number for the company. Even though it is not the largest of its kind, the company would create an averagely good market for Pegasus since it is also widely known, to be ranked number two in the area. The price of the company was $250 per unit, which is slightly higher than that of Reese Corporations.
The company being number two in its area could be viewed as a shadow of Reese Corporations, and would thus not provide as much popularity for the company, as Reese would (Zowada, 2013). At the same time, its services are slightly highly priced, in consideration to its higher competitor.
Kruger Corp
Kruger Corp is the third company in the list for consideration in the project. It is considered very efficient, since in its last four years of existence, it has managed to build a big name for itself. It has also been involved in the production of touch screen panels of a new range. It would thus be a good choice in terms of experience as well as efficiency (Rodrigo & Nádia, 2015). The quality of its products is also highly rated.
Kruger however seems to quote the highest price of $275 per unit, among the four companies under consideration. It is thus slightly expensive, in relation to its experience in the industry compared to that of its counterparts.
Payne Industries
Payne Industries attracted Pegasus mainly because of its attractive quoted price. The company is willing to take $240 per unit which is fourteen percent lower than Kruger, and four percent lower than Reese. It would thus cost Pegasus the cheapest. The company’s small size would also allow it to focus all its attention to Pegasus, meaning it would do everything in its power to ensure the success of the business partnership. Among the new businesses in the industry, Payne is considered the most promising.
Payne being a new business is not widely known. It would thus not play a major role in enabling the popularity of the touch-screen LCDs. It has, however, not much experience in the business, compared to its three competitors. Choosing the company would thus be out of its low charges only, which is not very wise for a business (Zowada, 2013).
Solution Size and Rationale
Among the four companies, Reese Corporations seems to be the best solution. For instance, being rated the best company in its field gives it a big name. Taking Cappozi would cause the company to be viewed a little inferior by the public, since it would have overlooked the best company according to ratings, performance, popularity, profitability and effectiveness. Kruger needs more time to create a name for itself, while Payne is still a small company, which might not handle the big challenge effectively.
The problem on the size of investment could be negotiated (Jian, & Bao, 2013). If the management teams of Reese Corporations and Pegasus held a meeting, they would compromise on their number and probably take an average size of investment like $375 million per annum. Pegasus will thus have to sacrifice more, while Reese compromises.
Conclusion
References
Heimeriks, K. H., Bingham, C. B., & Laamanen, T. (2015). Unveiling the temporally contingent role of codification in alliance success. Strategic Management Journal, 36(3), 462-473. doi:10.1002/smj.2224
Jian, L., & Bao, J. (2013). A Synthetic Cloud Model for Third-Party Logistics Partner Evaluation. Proceedings For The Northeast Region Decision Sciences Institute (NEDSI), 1140-1147.
Rodrigo Duarte, S., & Nádia Kassouf, P. (2015). Relationship with suppliers from the perspective of integrated logistics: the example of a Brazilian company from the sugarcane sector. Business Management Dynamics, 5(4), 1-9.
Zowada, K. (2013). Business Cooperation Of Logistics Companies With Small And Medium Enterprises - Research Report. Journal Of Economics & Management, (12), 111-120.
