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Andrew-Carter Casestudy

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3. Aztec Component Supplies The senior management team at Aztec Component Supplies knew that they were facing a decision crucial to the future of the company. A plastic injection mouldings manufacturer, they had for the last twenty years specialised in providing industrial mouldings for domestic appliance manufacturers. They were especially adept at moulding relatively large components, such as the outer casing for carpet cleaners. Large components were difficult to make to the high levels of tolerance and finish which customers demanded. Because of this ability they had increasingly focused on the few large customers who were willing to pay their prices. Five years ago, twelve customers accounted for around 80 per cent of Aztec’s sales, …show more content…

We are not even preventing them from dealing with other companies. I would prefer that they didn’t of course. Just coping with our increased business will be a tough job for them. But they have to understand that unless they make up their minds soon, and fully commit to the deal, we will lose patience. They are not a particularly large supplier, accounting for less than 10 per cent of our purchased parts expenditure. The Desron Group are fifty times bigger than they are, can’t they see we are in a position to help them?” Ethan Condos was not so sure. ‘Sure it’s a great opportunity but the choice is just too stark for comfort: accept the deal, or reject it. Maybe we have to simply be courageous and make a decision one way or the other. If so, we need to fully understand the advantages, disadvantages and, above all, the risks of accepting the deal or not. However, I would also like to explore the possibility of some kind of deal which would involve a less radical move than committing ourselves so totally’. Case Questions Q1: Should Aztec take up the offer to become Desron’s sole supplier of injection moulded parts or should it turn down the offer?

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