1. The analytical tools that can be used by the supply group to determine the right price include a PESTL analysis of the specialized plastics industry that ABC Plastics operates within as well as a SWOT analysis of the potential decisions which Nationwide Telephone could take given the options. The real issue may be the need for Nationwide Telephones to do a Porter’s Five Forces analysis and Early Warning Analysis with regard to their own product, as given the prevalence of cell phones and the decreasing use of landlines, there may be in fact decreasing demand, rather than growing demand, over the coming five year period. The drop in sales that Rogers has noticed may be more related to the outdated product.

You're lucky! Use promo "samples20"
and get a custom paper on
"Nationwide Telephone Case Study"
with 20% discount!
Order Now

2. Nationwide’s supply department could have prevented the price escalations by having a long term contract with ABC Plastics with a locked-in price for certainty. They could have also made a new request for proposals and terminated the current relationship with ABC Plastics if a competitor offered better rates and similar quality for the manufacture of the plastic parts. A third option would have been to use a new request for bids to use a lower priced offer as a pressure tactic to lower the increasing price, as it was stated was their regular practice. While it was not clear from the case study details what the timelines were for the price increase, had they been following their existing strategy, it seems unlikely that the current situation would be occurring.

3. The competitive condition of the plastic component industry impacts the use of price analysis because it provides the terms and context of not only the price of the plastics with the existing supplier ABC Plastics, but also of their competitors. If there is significant demand for the industry (perhaps due to manufacturing of components for lucrative cell phone production), then Nationwide Telephones must be more careful in keeping the relationship with ABC Plastics intact. It would pose a supply chain risk if ABC Plastics chose to terminate the relationship based on fulfilling other, more lucrative contracts. If there is considerable capacity free as well as supply in the plastics industry, then Nationwide Telephones would be better off looking at competitor alternatives, including a potential contract with a Mexican firm given the success of the strategy for other parts.

4. Jan could encounter resistance from Bill in the form of refusing to share critical details or information as well as failing to use or share access with Jane to his existing relationship to the plastics supplier. Bill can help to facilitate the pricing analysis process by sharing information and strategies tried so far as well as information regarding how the plastics supplier operates. Further, Bill can has an existing relationship to the supplier which can be used in the course of implementing the strategy that Bill and Jan could develop collaboratively. By putting their skills and knowledge together they have a better chance of succeeding in their initiative, however given that Bill is getting ready for retirement, and the fact that the current increase in prices does not reflect well on the job he has done so far, Bill may have few incentives to be cooperative.

5. Some of the costs of continuing to source from the same local suppliers include potentially losing out on a more cost efficient strategy using a different supplier by seeking competitive bids as well as having to pay the increasing costs of doing business with ABC Plastics. Some of the benefits include certainty based on previous experience with regard to the timely delivery of quality materials that work well for their production operations as well as the ease of continuing with current relationships without the hassle of negotiating a new contract.