23 Jul DOES STEVE NEED ADDITIONAL INFORMATION FROM IVERSTINE AND WALKER?
Beach California to manufacture resistors Show more In 1979 Steve Blake founded Blake Electronics in Long Beach California to manufacture resistors capacitors inductors and other electronic components. During the Vietnam War Steve was a radio operator and it was during this time that he became proficient at repairing radios and other communications equipment. Steve viewed his four-year experience with the army with mixed feelings. He hated army life but this experience gave him the confidence and the initiative to start his own electronics firm. Over the years Steve kept the business relatively unchanged. By 1992 total annual sales were in excess of $2 million. In 1996 Steves son Jim joined the company after finishing high school and two years of courses in electronics at Long Beach Community College. Jim was always aggressive in high school athletics and he became even more aggressive as general sales manager of Blake Electronics. This aggressiveness bothered Steve who was more conservative. Jim would make deals to supply companies with electronic components before he bothered to find out if Blake Electronics had the ability or capacity to produce the components. On several occasions this behavior caused the company some embarrassing moments when Blake Electronics was unable to produce the electronic components for companies with which Jim had made deals. In 2000 Jim started to go after government contracts for electronic components. By 2002 total annual sales had increased to more than $10 million and the number of employees exceeded 200. Many of these employees were electronic specialists and graduates of electrical engineering programs from top colleges and universities. But Jims tendency to stretch Blake Electronics to contracts continued as well and by 2007 Blake Electronics had a reputation with government agencies as a company that could not deliver what it promised. Almost overnight government contracts stopped and Blake Electronics was left with an idle workforce and unused manufacturing equipment. This high overhead started to melt away profits and in 2009 Blake Electronics was faced with the possibility of sustaining a loss for the first time in its history. In 2010 Steve decided to look at the possibility of manufacturing electronic components for home use. Although this was a totally new market for Blake Electronics Steve was convinced that this was the only way to keep Blake Electronics from dipping into the red. The research team at Blake Electronics was given the task of developing new electronic devices for home use. The first idea from the research team was the Master Control Center. The heart of the system is the master control box. This unit which would have a retail price of $250 has two rows of five buttons. Each button controls one light or appliance and can be set as either a switch or a rheostat. When set as a switch a light finger touch on the button either turns a light or appliance on or off. When set as a rheostat a finger touching the button controls the intensity of the light. Leaving your finger on the button makes the light go through a complete cycle ranging from off to bright and back to off again. To allow for maximum flexibility each master control box is powered by two D-sized batteries that can last up to a year depending on usage. In addition the research team has developed three versions of the master control boxversions A B and C. If a family wants to control more than 10 lights or appliances another master control box can be purchased. The lightbulb disk which would have a retail price of $2.50 is controlled by the master control box and is used to control the intensity of any light. A different disk is available for each button position for all three master control boxes. By inserting the lightbulb disk between the lightbulb and the socket the appropriate button on the master control box can completely control the intensity of the light. If a standard light switch is used it must be on at all times for the master control box to work. One disadvantage of using a standard light switch is that only the master control box can be used to control the particular light. To avoid this problem the research team developed a special light switch adapter that would sell for $15. When this device is installed either the master control box or the light switch adapter can be used to control the light. When used to control appliances other than lights the master control box must be used in conjunction with one or more outlet adapters. The adapters are plugged into a standard wall outlet and the appliance is then plugged into the adapter. Each outlet adapter has a switch on top that allows the appliance to be controlled from the master control box or the outlet adapter. The price of each outlet adapter would be $25. The research team estimated that it would cost $500000 to develop the equipment and procedures needed to manufacture the master control box and accessories. If successful this venture could increase sales by approximately $2 million. But will the master control boxes be a successful venture? With a 60% chance of success estimated by the research team Steve had serious doubts about trying to market the master control boxes even though he liked the basic idea. Because of his reservations Steve decided to send requests for proposals (RFPs) for additional marketing research to 30 marketing research companies in southern California. The first RFP to come back was from a small company called Marketing Associates Inc. (MAI) which would charge $100000 for the survey. According to its proposal MAI has been in business for about three years and has conducted about 100 marketing research projects. MAIs major strengths appeared to be individual attention to each account experienced staff and fast work. Steve was particularly interested in one part of the proposal which revealed MAIs success record with previous accounts. This is shown in Table 3.15. The only other proposal to be returned was by a branch office of Iverstine and Walker one of the largest marketing research firms in the country. The cost for a complete survey would be $300000. While the proposal did not contain the same success record as MAI the proposal from Iverstine and Walker did contain some interesting information. The chance of getting a favorable survey result given a successful venture was 90%. On the other hand the chance of getting an unfavorable survey result given an unsuccessful venture was 80%. Thus it appeared to Steve that Iverstine and Walker would be able to predict the success or failure of the master control boxes with a great amount of certainty. Steve pondered the situation. Unfortunately both marketing research teams gave different types of information in their proposals. Steve concluded that there would be no way that the two proposals could be compared unless he got additional information from Iverstine and Walker. Furthermore Steve wasnt sure what he would do with the information and if it would be worth the expense of hiring one of the marketing research firms. Discussion Questions 1. Does Steve need additional information from Iverstine and Walker? 2. What would you recommend? 3. Build a Decision Tree with Payoffs and Probabilities. Show less
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.