Platinum Box

Summary

Platinum Box, a medium size company, makes fold down boxes. Currently using five printing presses and looking to acquire five more for the expansion to a new market. Company’s strategy is to enter into United States with high quality product. Company is using presses made by JabaKing which makes “very good quality but not necessarily the highest quality” (Case p. 1). Three suppliers are selected JabaKing, Merakuri and Pnutype. The company needs to decide whether to continue with existing supplier or to multi source.

Although the company has a very strong relationship with JabaKing, based on its current mission to enter United States it should go ahead with a new supplier. If it chooses new supplier it will save company money by becoming more efficient and at the same time it will allow to produce higher quality product. The Merakuri should be chosen as a supplier based on a superior and more cost effective product.

Issue Identification

Platinum Box is trying to decide whether to single source by continuing with JabaKing or multi source with a different supplier. On one hand the company has a long standing relationship with Jabaking. Supplier helped the company many years ago by selling equipment at very reasonable terms. In addition Jabaking had a very good quality machines that produced a fine product, however it was not of the highest quality. Since the company wants to enter United States and compete on the highest quality product, staying with existing supplier would not accomplish current strategy. If the company wants to be competitive and enter new market it has to choose the best supplier on the following parameters quality of the product, cost, output and operating costs.

Reliance on one supplier creates risks for Platinum Box. Unexpected events such as a strike or internal problems of the supplier can affect the company. Jabaking has a union that wants to unionize all of the printing shops within next two years.

Environmental and Root...