Platinum Box Case Essay

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. Criteria 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 certainly would prefer to begin each acquisition from a position of strength derived from a competitive environment. Competition is a great way to level the playing field. Competitive bidding drives suppliers down to a market-efficient pricing environment where the negotiation process can work optimally. But to have a competitive environment in any acquisition, the following conditions must exist:  · Competition: First and foremost, there need to be a number of qualified suppliers in the targeted marketplace—that is, no single or sole source constraints.  · Ability to move: The buyer must be able to move the business away from the current provider; there can be no binding commitments, for example.  · Sufficient Volume: The buyer must have enough volume to warrant interest from a sufficient number of qualified bidders.  · Time for competition: Sufficient time must be available to proceed through the entire competitive process.  · Willingness to change: The buyer’s internal line of business groups must be willing to use any of the qualified bidders. When negotiations follow a structured bid process (RFP, RFQ, auction, and so forth) or when accurate cost data is known for the product or service in question, buyers can usually leverage a negotiation technique known as â€Å"competitive bargaining.† This is the traditional way of hammering out a deal, marked by hard discussions focused mainly on price and based upon concrete facts. Competitive bargaining can be applied in a wide range of circumstances, even including single-source supplier relationships where an attractive alternative or fall-back plan exists. Competitive bargaining works in many situations. Yet it’s not the best tactic for complex acquisitions where dynamics in addition to price are in play. It’s also not a good tactic when negotiating from a position of weakness which can be argued for in this case with Jim Hicza and Conrad of Jabaking. The collaborative style is best suited for more complex negotiations, including ones where you’re â€Å"negotiating out of a hole,† which can be the present situation Platinum Press in it right now in that they are somewhat indebted to Jabaking. Collaborative negotiations:  · Focus on mutual problem solving in a collaborative fashion. The use of positive group problem-solving techniques, rather than oppositional positioning, is a core tenet of collaborative negotiations.  · They are non-confrontational: This does not mean the buyer is weak. Rather it means that negotiations are conducted in a positive manner and are focused on creating solutions that can work for both sides. The ability to keep things positive is a critical skill for supply management professionals.  · Yield to principle but not to pressure: A collaborative negotiation quickly falls apart if the buying organization compromises on this guideline. Once the buying company yields to pressure from its sales opponents to focus solely on price, the positive atmosphere essential to collaborative negotiations quickly evaporates. Successful collaborative negotiations require greater skill and experience than competitive bargaining. These discussions typically involve a multitude of issues that must be resolved to the satisfaction of both sides. So when an inexperienced negotiation team overly focuses on one point, for example, they leave themselves vulnerable to being taken advantage of on the other elements under negotiation. Moreover, the negotiators need to understand that these various issues are interrelated. The cost model of the entire package can change quickly if the negotiator does not understand the effect of one concession on another. Analysis: In creating a bid evaluation matrix for Merakuri, Jabaking and Pnutype, a few weighted evaluative steps have to be taken. These steps include: identifying the important evaluative factors; reaching consensus on the importance of the evaluative factors; specifying with precision the evaluative factors, reaching consensus on the weighting of each of the evaluative factors determining the range for the rating scale; developing the definition for each rank in the rating scale; performing the rankings individually and finally discussing and developing a consensus ranking.