Otis Toy Trains Case

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Otis Toy Trains is faced with the challenge of dealing with increasing labor costs. Until this point, Otis has been able to deliver a detailed and refined train series at a price customers are satisfied with. Chinese company JLPTC has announced its ability to produce the same train and cut manufacturing costs up to 60 percent. In order to survive, Otis needs to cut costs and evaluate the potential success of its strategic options.
Otis could accept the proposal in its entirety. By doing this, Otis would be able offset the increasing labor costs within the U.S and additionally has the potential to make more profit on every unit sold. Otis would need enough information to ensure that cutting costs is not offset by additional expenses
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accept the proposal or not, if Otis takes the best aspects of both decisions it can come to a plan that is mutually beneficial for both

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