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DeHavilland Case Study

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Executive Summary De Havilland is a Canadian aviation company that is in the process of determining how to contract out the supply of its flap shrouds and equipment bay doors for its Dash 8 aircraft. Its current supplier, Dollard Plastics is believed to be charging a large premium over market price and for that reason, a completive tender was issued to test De Havilland’s hypothesis. After receiving bids from 9 companies, a strategic review of De Havilland’s options and alternatives was conducted. Based on this review, it is recommend De Havilland ceases its contractual relationship with Dollard and instead enters into a contract with Marton Enterprises. Although entering into a contract with Marton puts forth the issue of whether or …show more content…

There just is no way to tell whether or not the quality of one bidder’s product is equal to the quality of the other, leaving price as the only metric for a true “apples-to-apples” comparison. This gives De Havilland the opportunity that if it is able to control Marton’s quality to be comparable to that of Dollard, then its goals of obtaining a long term supply with significantly lower pricing will be met. Alternatives and/or Options De Havilland has the option to negotiate with Marton, to better its position by sharing its strategic objectives and try to reach an agreement that betters the relationship for both parties. It could negotiate to provide better pricing, better quality and better customer service. If De Havilland negotiated pricing, it could lower the pricing to something less than what was already proposed by Marton, and potentially cut out some “fat” that might be included in Marton’s original quote. De Havilland had been known for negotiating after receiving their proposals, so there is the potential that Marton was aware of this and padded its bid. De Havilland could negotiate on quality, requesting quality reviews and minimum quality specifications, and that quality control be instituted to ensure that Marton’s yield matched De Havilland’s standards. This would help alleviate any concerns De Havilland has over quality. Lastly, De Havilland

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