Case Study

Every decision made had my involvement as the buyer in an attempt to learn what each party needed to ensure my goal and theirs could be met to ensure the purchase went through. The over overarching theme here is to aggressively pursue the optimum solution and to avoid any events that may lead to dangerous conflict and other groups trying to pull away from a mutually beneficial solution. This strategy is dependent on the person perusing it to have a form of legitimacy to push forward but if any form of power can be leveraged it is best spent moving

For the Motorking Corporation, the DSI tree estimates a profit of $1,885,137.50 in a strong economy and after subtracting the DSI fee of $20,000 leaves the corporation with $1,865,137.50 which is greater than $1,577,291 (This is Motorking’s Expected Value for Perfect Information). This proves that the Motorking should hire DSI to conduct a market survey.

There were plenty of factors that nourished my confidence level for this exercise, by preparing a tactical game plan forced the seller to agree to my concessions throughout the negotiation. Knowing that Seltek not was loosing money in both the owning of set property and the fact that they had a $200k tax lien on the property. Furthermore, after my firm had given me the authority of investing up to $40 million dollar into this acquisition, I felt the seller had no chance in walking away from the deal. Also, implementing an optimistic opening, allowed for take advantage of the psychological tendency of contrast principle (p. 161).

Finding a way to fairly evaluate each bid was needed. A Weighted Evaluation System was chosen. Four factors were used to evaluate the bids. They are: Performance & Quality, Service, Price (total cost of purchase determines the pricing factor) and Financing. By applying a value to each, a better evaluation of the bids can be made.

(a) See decision tree above. (b) Once Monday 's bid is made, Newtone 's optimal strategy is to accept the bid if it is a $3,000,000 bid and reject it if the bid is for $2,000,000. If Monday 's bid is rejected, then accept Tuesday 's bid, regardless of the amount offered. The EMV of this strategy is $2,600,000.

Refer to Scenario 15-3. What decision should be made according to the expected monetary value decision rule?

The proposed venture in this case study has great potential in highly populated areas with a need for transportation. Since Zipcar provides the cars in areas close to the customer, this service would be easy to use. The drawback would be finding a way to make the benefit of utilizing Zipcar more compelling over other forms of transportation such as owning a car, using other car rental services, taxis, subways, or buses. The nice component of Zipcar is that it offers hourly services which can attract people who need a car only for a doctor’s appointment or grocery run.

In such a scenario, whereby Oceanview conducts market research and rejection of the zoning change is predicted, it is faced with an expected loss of $387,900.75 if it proceeds with the bid, and an expected loss of $15,000 if it does not. Hence in this case, it will not focus on maximizing profits but on minimizing loss. Hence it should not bid if market research predicts rejection, as this decision is more likely to keep its loss at a minimum.

He should like to determine about the market actual wants. Just like the same, also during the marketing, the research about the marketing is also very important to determine what message the organization should adopt. It also shows which medium will be the best. The analysis of Boone (2010) revealed that with the help of this market research, he can gather the necessary data for his organization which can help us in analysis and create an action plan.

3. If market research is conducted and it predicts that the zoning change will be rejected, the expected value of submitting the bid would be a loss of $-0.075 million, whereas the payoff of not submitting the bid would be 0. Hence, to minimize losses, Oceanview should not submit the bid.

The prime managerial value of management research is that it reduces uncertainty by providing information that improves the decision-making process. The decision –making process associated with the development and implementation of a strategy involves four interrelated stages.

Single stage tendering prices are based on incomplete information. That the client has to understand and take into consideration when looking into the risk of the project. This creates a false sense of security and a situation where both parties are looking to pick holes in the design work. Robert Smith calls it ‘legalised gambling’ as the attractive apparent cost is balanced with the sureness with transfer of risk (Smith, 1995) page 44, cited in (Mosey, 2011).

A strategic option is a valuation approach applied by firms when making strategic investment decisions involving valuable business opportunities. The approach is premised on the idea of remedying the shortcomings of DCF analysis model. This approach allows firms to value investment opportunities by ascertaining on future value benefits that a specific project would bring to firm, rather than looking at cash flow. Strategic options enable the management to formulate strategic decisions to inform on future opportunities that would be created through today’s investments. Possible future operations are valued using strategic options, as no cash flow is analyzed, but rather analysis of opportunity for investing

Purchase decision is impacted by price, effect on architectural drawings, quality and relevance of information provided to costumer, level of service, design of the bid document, customer’s impression of salesperson.

  Section 1: Identification of current forecasting techniques used in the demand forecasting of existing and new products. Section 2: Idenitification of a better forecasting technique which can ease the process and improve the reliability and accuracy of the sales forecast.