Aaa Office World Case

1686 Words May 19th, 2015 7 Pages
Introduction
When a certain point is reached regarding a company’s success, a set of different opportunities arise and partnerships may unfold. However, with every possible strategy available, risks and benefits also come into play; without discarding any of them beforehand, every option is a strong candidate until a final decision is made. In this case study we will analyze the current business strategy pertaining to AAA and the offer from Business Center Inc.
Background
In order to define what AAA should do in this kind of a situation we must first look at the background of the company. The company has been in business for 28 years and their sales volume is about $40 million which speaks volume about the company’s experience and
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With a steady business in place, AAA isn’t sure on how to go about with this offer. Stasia Acosta’s main concern, however, comes from the fact that if she declines Business Center’s proposition once again, they may forever lose them as a customer. Furthermore, another turning point would be the sole idea of having a newly formed competitor, essentially created by themselves, who could potentially lower the market price making it a critically devastating move for AAA. Needless to say, with one single customer holding thirty percent of AAA’s sales, making the right decision here is imperative for the long term success of AAA Office World.
Name Brand vs. Private Label
To every retailer, no matter what sort, a competitor will always be present as well. In many cases, patents exist in order to protect ones product, for a certain period of time, from other parties with similar ideas. Nonetheless, like everything else that expires, a flood of new, and cheaper products will ultimately find their way to the market. The same happens when a private label is forced to compete with a store brand, which is the case with any large retailer. For the sake of argument let us take the private label brand Huggies, and compare it to a known store brand, Parent’s Choice. If Johnson & Johnson, for example, were the suppliers of the Huggies brand to a large retailer store such as Walmart, they would be heavily tied to