A Chip Off the New Block

760 Words Apr 3rd, 2016 4 Pages
Case Study #3: Contract for the International Sale of Goods
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A chip off the new block
Semicontronics is an Australian manufacturing company that has been in the business of semi manufactured electronics for over a decade. Semicontronics has a solid reputation for meeting customer demands for quality products on time and on budget. The majority of Semicontronics customers are international, mid-market manufacturing companies that produce generic electronics such as cell phones, digital media players and game consoles. Retail stores in foreign countries purchase the generic products and rebrand them for sale.
Recently, Semicontronics has been approached by Phoneson to act as a supplier
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If Semicontronics can maintain its track record for supplying cost efficient, quality products on target, it could open an entire new customer market for expansion. While negotiating the supplier contract, Semicontronics realizes the memory in its current computer chips will have to be significantly increased to support the technical capabilities of Phoneson’s electronics. Its current manufacturing plant in Brazil is not equipped to meet these new demands, and an upgrade at this stage in a new customer endeavor is not economically feasible for Semicontronics. Semicontronics realizes it must find a quality subcontractor with the capabilities to manufacture the Phoneson computer chips, including the enhanced memory requirements.

Cash in your chips… After careful market research and consideration of options, Semicontronics decides to subcontract the computer chip manufacturing to Singatron, a relatively new electronics manufacturer in Singapore. Singapore has been a hotbed for electronics manufacturing, and Singatron was created by venture capitalist hoping to get a foothold in Singapore’s electronics market, specifically, in the next generation of computer chips. Although Singatron markets itself as a top quality manufacturer, its lack of experience is proving to be a major obstacle to it winning contracts. The subcontracting offer from Semicontronics has the potential to be mutually beneficial for both parties, because

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