Submitted by: Submitted by acecom
Views: 331
Words: 361
Pages: 2
Category: Business and Industry
Date Submitted: 10/12/2011 01:55 AM
Before the lecture began I gave the proposal of Peglettes a 3, and after the lecture I decide to give the Peglettes proposal a 2.
I will reject the proposal for the Peglettes on several grounds. One of the key reasons for this rejection is because the supplier to make the new project successful rests on the hands of one supplier, Empire who holds a patent for the special plastic compound which would be required to make the Peglettes. It would be possible that one day Empire decides to stop supplying the plastic compound to us, or that they may exponentially increase on the pricing which will also result in the failure of the new project. Even though there was mention on pricing our product 5% lower than the current Empire items, it still wouldn’t make up for the possibility of limitless increase in price from Empire.
More over, it seems that the barrier to entry into this market is quite low as there are already reports of several other competitors looking to enter this market. Morever, there are evidence to suggest that to deal with minor limitations such as the different sizes, a company can simply buy injection molding machines off the shelf.
Lastly, it seems that the current company do not have any experience dealing with retailers therefore even if they do decide to enter this segment, they will not likely be as successful as other companies who have experience dealing with retailers.
All these reasons combined make this venture highly unattractive, and not likely to succeed.
The recommendation for entering the pressed gear market seems to be more feasible since the company has a tradition of being specialty parts supplier. Moreover, since it will be a proprietary technology with the new process the company developed, it will keep the barriers to entry higher for others.
There are, however, quality issues initially that is still going through trials that would be in our best interest to clear before going ahead with investing in this...