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Precision Worldwide, Inc

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Precision Worldwide, Inc. Introduction When a competitor develops and introduces a superior product that is less costly to manufacture and even many times usable and durable, the key to people at Precision Worldwide must decide whether to match the competitor's product, when to do so, how to price or what sustainable competitive advantage it needs to adopt during the next strategic period, given that it holds a large inventory of its now inferior product. This issue concerns the steel and plastic rings which the company, Precision Worldwide, Inc. (PWI) is opting to produce as a matter of competing intensively with a French company, Henri Poulenc, which was at the same time posing a big threat to the viability of the steel rings PWI is …show more content…

This can bring a positive impact in favor of the PWI for its initiative at providing its customers with marked down prices of steel rings. And, (4) the production of plastic rings at a cheaper cost will enable the company to bring a message of dynamism to the market despite the prospect of competition. (Hill, 2008) 4. How long is it prudent to sell a short-lived highly profitable replacement part without jeopardizing the company’s image and market share? Answer: The introduction of the plastic rings into the market should be followed by a market survey to determine the acceptability of the market to the innovation. An analysis of the consumer behavior is important in planning the appropriate action to be taken on the period required to sell the plastic rings. The survey should be able to tell the effects of the innovation for PWI to assess how long the product can be introduced into the market without affecting the image and market share of the company. 5. What price relationship is likely to prevail between the steel rings and the plastic rings once the latter become widespread? Answer: The price relationship expected to prevail between the steel rings and the plastic rings might at a ratio of 5:1 which means that five plastic rings is equivalent to one steel ring. This relationship however, can significantly change as the cost structure is reevaluated and inputs analyzed to arrive at a more competitive cost structure enough to sustain the

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