Worksheet for Computron: Competitive Bidding
Assignment: Analyze the case. Summarize your analysis of alternative bidding strategies in the following table. (Identify the key criteria. Evaluate the alternative bidding strategies on each criterion.) Draw an appropriate conclusion. Criteria
| I. Submit bid at list price
| II. Cut Price (16 %)
| III. Do not Bid
| High DependabilityReasonable PriceLow Emphasis on FlexibilityPinpoint Accuracy Not Required
| Advantages1. Maintain high quality image and branding of Computron.2. Keep standard markup in place – if they do win, it will be profitable.Disadvantages1. Price will be too high for König.2. Low chance that Computron will win the bid. – Missed opportunity, and the European factory may sit idle after opening.3. Allows other competitors to gain market share and potential future business with König.
| Advantages1. Highest chances of winning the competitive bid.2. Maintain relationship with König.3. European factory will have immediate work to complete when it opens.Disadvantages1. Miss out on potential profit if Computron was to bid higher.2. Some hit to Computron’s high quality image and branding.
| Advantages1. Maintain high quality image and branding of Computron.Disadvantages1. No chance of winning the competitive bid.2. Missed opportunity for Computron.3. European factory may not have enough work when they open.4. Allows other competitors to gain market share and potential future business with König.
| Conclusion: After weighing the alternatives available to Computron, I believe the best option is for them to reduce their price by 16%, making their overall bid $1,045,632. This price will put them just under EDAG’s price and just under 20% above Ruhr’s price. I don’t believe Digitex is a realistic competitor because of the inferior quality of their products. Given the conversation that Zimmermann had with König’s vice president in charge of purchasing, they would still have a shot if...
Please join StudyMode to read the full document