Statement of Issues
The main problem in this Platinum case is the decision whether or not to single source to Jabaking with the expansion of printing equipment. Because Conrad of Jabaking was instrumental to helping Platinum find their feet and establish its ground in the printing industry in 1992 does not necessarily mean Platinum press has to be indebted to Jabaking thirteen years after. Even though Conrad has always hinted Jim Hicza since 1992 that he expects that Platinum will reward them for the favour in future, business decisions have to made at crucial times even as long term business relationships still has to be sustained. Platinum will have to blend these two crucial business principles if it wants to continue to grow in the business industry. One way to get this done is by exploring potential opportunities , long-term, in working with Jabaking to help them upgrade their equipment and technology system to meet current market demands long term while also purchasing the services of Pnutype because of the technically sound environmental equipment. That way Platinum will sustain the long term relationship with Jabaking as well as tapping from the high quality equipment Pnutype has to offer for the purposes of establishing firmly and gaining goodwill in the new US market.
Therefore, for the immediate solution, Platinum Press should engage multiple sourcing for this new US market venture for the following reasons:
1) This will help keep Jabaking competitive and on their toes for continuous improvement and to be able to provide better value. 2) Multisourcing will help minimize the risk of Jabaking’s or any other supplier’s failure. Especially in terms of providing high quality equipment in a time where quality ranks high on the evaluation matrix of purchasers. As we already know from the case that Jabaking does have a reputation of having very good quality product but not necessarily the highest quality. 3) Jabaking may not necessarily have sufficient capacity or skills to meet the new market need. 4) Multisourcing will give Platinum Press an opportunity to test and discover potential expert suppliers in the industry. 5) Multisourcing will also help reduce and/or avoid Platinum’s dependence on Jabaking alone and avoid Jabaking gaining business leverage.
In this case, a good decision will result in a situation that strengthens Platinum’s Press bargaining position and not weaken it. Platinum Press’ position is weak when there is only one known provider of the product or service—as in a sole source or single source deal. Therefore, competition is the best way to quickly arrive at market price level. This competitive factor will be missing in sole/single source negotiations with Jabaking.
Careful bid structuring results in apples-to-apples comparisons for each bidder. Platinum Press Inc. strives to collect a minimum of three viable bids for each procurement effort. Bids are tabulated into a matrix that lists all vendors and fields of comparison. Each vendor is asked to submit bids with prices broken out for effective comparisons.
In view of the problem issues outlined above, there has to be clarify in terms of the negotiation technique in question. We need to specify if the negotiation is for competitive reasons as in the case of Pnutype and Merakuri Press or if it is solely for the aim of collaborating with Jabaking to help them enhance and develop their equipment quality especially as Platinum Press is someone indebted to Jabaking. The decision of which method on negotiation to apply rest solely on Jim Hicza. However, as mentioned earlier, competitive negotiation should be applied immediately while collaborative negotiation should be applied for long-term product development assistance for Jabaking.
Differentiating Between Competitive and Collaborative Negotiations
Most supply management professionals...