For the Nakamura company, the decision-making problem arises in front of them both offers are good as they meeting with the objective of the company that there will be an expansion of lacquerware to the U.S market. By keeping in mind, the long-term goals, they need to increase their share in the U.S market. And the priority of the company is maximizing the profit for the long run and the least priority of the company is short-term returns.
There are two offers and both have different conditions and both have different aspects. As the company have to either reject both offers or accept one offer. So, by the evaluation of both offers and seeing the advantages and disadvantages both. By accepting the RC offer this offer assures the returns of the $283000 in the next three years and there is a return of the $240,000 per year. But there is no presence of Nakamura in the U.S with its Chrysanthemum brand name and after 3 years Nakamura has the power of the Negotiation with RC as it will have an excess capacity of $275000 pieces. This offer does not have any kind of flexibility without any long-term profit and also this offer is risky.
Another offer from the SSW offer is that the order does not assure a firm order and any return for the period of the contract this is risky if the U.S market doesn’t like lacquerware in the market. But the offer is flexible if Nakamura initially supplies only 3,00000 pieces instead of the 600,000 pieces. And also siphon off 175,000 pieces from the domestic market, with this offer becoming less risky and flexible also. The company will use its name while competing in the U.S market. The distribution will be focused on the long-term profit and there is the potential of the $1 million per year in profit. And also at the time of renewable of the contract Nakamura has the power of negotiation.
So for the Nakamura company, SSW’s offer is best in all the that this offer satisfy the objective and needs of the company and also this offer giving the flexibility and less risk but most important Nakamura will use its brand name while competing in the U.S market. By accepting the offer there must be some terms and conditions on which they both signed so that offer can be legally managed by both parties.
- The offer will not be cancelled before 6 months of the signing.
- There should be the use of the brand name of the Nakamura’s Company in the U.S Market while competing.
- There will be a renewable contract after 3 years with proper analysis of the profit and market analysis with proper SWOT analysis.