Overview of the Case Study
Within any bidding process, it is almost impossible to get a perfect bid for the product required. Therefore, most bidding processes require an element of compromise so that the consumer can get the bid with the highest value. However, this is also not easy as the best value in many cases can be found in installments occurring within different bids by varying suppliers (Chen et al., 2015) . In some cases, this can be cured through advising the bidders to subcontract one another where applicable, and when not applicable, the consumer will have to pick the best possible option out of the available bids. The case study herein refers to three bids made for a lighting control console. Being a singular and specialized computer system, this component cannot be contracted between the three companies or any two, hence the need to pick one winner for the bid. On the other hand, there are several stakeholders within the transaction that have to be convinced to compromise so as to effectuate the purchase (Beshears & Gino, 2015) . The first is the purchasing team. This is the group that holds the ability to give a go-ahead for the deal. The second team is the users and include the individuals who will have to handle the device on a continuous basis. Finally, there is the theater department who will be handling the commercial aspects of the use of the device and are in a better position to understand whether or not using the device will be profitable.
Analysis of the First Bid
The first bid has been made by the market dominant player Electronic Theatre Controls (ETC). Their console is dubbed Obsession II and is being offered at the price of US$ 96,777. The company is the dominant supplier of such products in the market with their market share being higher than 59% of the entire market. This makes ETC a reliable supplier. The fact that it is doing well in the market reduces the chances of collapse. Secondly, ETC is situated in Columbus, Ohio which places it within close proximity of the CSU campus where the console will be used . The proximity will enable ETC to be available as and when needed by the users of the console. However, ETC’s product is the most expensive and comes at a price that is 61.52% higher than the lowest bid. This definitely places the bid at loggerheads with the purchasing team who would prefer the lowest purchase cost. Further, the users of the product do not also side with ETC. The commercial experts, however, to wit the theater managers consider ETC to be the most cost effective.
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Analysis of the Second Bid
The second bid is by far the smallest player in the industry, among the bidders. Leprecon and is to the tune of US$86,697 and the product is dubbed as LP-300. The purchase of the product is lower than the ETC bid but exponentially higher than the lowest bid. From the perspective of specifications, LP-300 must be very poor since even the users have rated it as the lowest products. Normally users will rate a product based on its components and not the price. Finally, even the purchasing team has rated the LP-300 as the lowest, meaning that the product also fails among the specialized specifications that only the purchasing team can look at. However, Leprecon has the advantage of being the lowest bidder among the companies within 25 miles of CSU, which was one of the primary factors.
The Third Bid
The final bid is also the lowest and the preference of the purchasing team due to that fact. It is presented by Strand, for the product Strand 520 at the price of US$ 59,997. The only listed advantage of the product lies in the fact that its purchase price is the lowest. Not evidence, however, is given about its quality but it is clearly superior to LP-300 which is depicted as the poorest. The main disadvantage for Strand is that it is situated in Cleveland Ohio, which is over 100 miles away from CSU.
The Preferred Choice
A careful analysis of the case study will show that the complex part of the choice does not relate to the product, but rather to the stakeholders. This is because whichever choice is made, some stakeholders will feel infringed. However, from a purely technical and commercial perspective, the best choice is the ETC’s Obsession II. Granted, this is the most expensive product in the market but tag-price, in this case, is not a major consideration. This is because the three consoles are not similar but just fall under the same parameters. Their quality, durability, the ability for repair, power consumption and availability of spares must vary from product to product (King & Lakhani, 2013) . Based on the assessment of theater managers, it is clear that the high price of the ETC product is also matched by its superior quality. This makes the product itself the better choice. Further, the fact that ETC is the main supplier with a higher sale volume means that they are not over reliant of profits per piece sold, but rather on volume of sales, thus have a higher propensity for providing value for the price . The users can easily be convinced to use the Obsession II since it enables them to avoid the LP-300 which they abhor. The theater managers will definitely be delighted as this was their choice. The main obligation, however, will be to convince the purchasing group that the higher price of ETC is commensurate with the value of the product (Suneja et al., 2015) . This is because value seems like the highest consideration for the purchasing team.
References
Beshears, J., & Gino, F. (2015). Leaders as decision architects. Harvard Business Review , 93 (5), 52-62
Chen, Y. Q., Zhang, S. J., Liu, L. S., & Hu, J. (2015). Risk perception and propensity in bid/no-bid decision-making of construction projects. Engineering, Construction and Architectural Management , 22 (1), 2-20
King, A., & Lakhani, K. R. (2013). Using open innovation to identify the best ideas. MIT Sloan Management Review , 55 (1), 41
Suneja, S., Isci, C., de Lara, E., & Bala, V. (2015, March). Exploring vm introspection: Techniques and trade-offs. VEE '15 Proceedings of the 11th ACM SIGPLAN/SIGOPS International Conference on Virtual Execution Environments, 50 (7), 133-146.
