Case Issue;
Case Issue is how to develop a pricing strategy for Atlantic bundle• - the new Tronn server and the PESA (Performance Enhancing Server Accelerator) software tool before SME ( that is Develop a pricing strategy for ¶Atlantic bundle• - the new Tronn server and the PESA(Performance Enhancing Server Accelerator) software tool before SME trade show ) trade show
Company Overwiev; The firm in question is Atlantic Computers who is a manufacturer of Servers and High-tech products
Atlantic Computers are the market leaders in the traditional market with it's product "Radia"
For the basic market which is a fast growing one, Atlantic Computers developed a server named "Tronn" and a software tool named PESA Jason Jowers joined the Company
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The competitor is Ontario Computer Inc.
Their advantage over Atlantic Computers is a majority sales generated by online trade
Their business model is based on operational excellence, so they pushed out many non value-added costs so they could compete largely on the price
The Pricing Strategy;
Jason Jowlers is in charge of determening the price for the " Atlantic Bundle" and he has serious options from which he needs to choose one. There are four options and they are;
1. Atlantic Computers can continue with their history of pricing and provide PESA (The ´Performance Enhancing Server Accelerator ) free with the Tronn server.
2. He can choose competitive based pricing, which is charging the customers to 4 times the competitors servers.
3. Pice by cost-plus pricing
4. Price based on value-in use pricing
Answers;
1. What demand issues does Jowler have to worry about? How important is each issue to Atlantic
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Question 1: At any of these dates, did Intel have a contingent liability as defined by SFAS #5?
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b) Another alternative should be using the negotiation method in order to develop a “win-win” situation. A negotiating party would have to be applied, “When a long period of time is required to produce the items purchased” (p 375). In these circumstances, suitable economic price adjustment clauses must be negotiated. Opportunities for various improvements may develop, such as the new manufacturing methods, new packaging possibilities, substitute materials, new plant layouts, and new tools. Negotiation permits an examination and evaluation of all these potential improvements. Competitive bidding does not. The advantage would be assurance of a long-term business with the Company along with reasonable profit for the supplier and reasonable cost for the buyer.
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3. What are the biggest risks faced by the firm in the next 5-10 years?
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