Clear_Hear_Scenario

Title Your Name Class Date Instructor There are several delicate balances involved when running a business. Keeping employees working, providing customers with reliable products that meet their needs and expectations, and maintaining the relationships with suppliers are all important to the success of a business. In the Clear Hear scenario, the quandary is which phone to place to produce the best profit gain. Lisa Sherman a few manufacturers to chose from, and must find a solution quickly. Her decision could jeopardize relationships if she simply makes the easiest most profitable solution. This decision would be supplying the phones from the Original Equipment Manufacturer (OEM). Today’s business environment does not slow down for the maintenance of relationships. If one company can produce a product that is more efficient and can deliver in a shorter time, they will be the product we see on the shelves. However, consideration to the notion that if something is not broken, do not try to fix it must be a part of this scenario. The employees of the phone manufacturer will be fine so long as they are in production, whether it is the Alpha or the Beta model. The problem is which manufacturer to order the phones. The solution would be to not accept the order in place, and move forward with OEM. OEM can produce a better product within 90 days. This phone shows higher profitability, which would increase employee bonuses. The price point of $14.00 meets the cost controls of the company, and the profit margin far exceeds that of the Clear Hear Alpha model. This may be a dramatic step, however in today’s business environment it is the way things work. No longer can a business be successful or maintain growth without risk taking and using the most cost effective materials. Gone are the days of the mom and pop shops where produced was supplied by the same grower for the past 20 years. Today we find a balance between the best quality and the lowest price, wherever that may be, and regardless of the relationship with the supplier. This is a risky situation for the company, having never ordered product for OEM in the past. In a Oligopoly where few sellers of a standardized or differenciated product are affected by the decisions of its rivals it is the best final product who will prevail. [ (McConnell, 2009) ] Should the new company be unable to keep their delivery promise, it would be awkward and perhaps costly to go back to the original deal. Works Cited McConnell, C. B. (2009). Economics: Principles, Problems, and Policies. New York: McGraw Hill/Irwin.