i need to summarize this case stady
Case
Dura -is a leader in label converting for the durable-product market place. They specialize in high-performance two colour labels for the automotive, lawn and garden and appliance industries. Dura stick has a well-deserved reputation for quality, technical knowledge and service. This means that the company can command a high price for their products in a very competitive market.
The Person
Mohammed Ahmed has been with Dura- stick for two years. He came to the company with 10 years' experience so he received a very good salary and conditions. However, his performance since he joined the company has not been good. The industry has been hit by the financial crisis so although Mohammed has worked hard but he has not been able to generate much business. He knows he needs to close a big account or he will be at risk of losing his job. Mohammed has a wife and two children to support so losing his job would be disastrous.
The situation
Last week Mohammed called on Ahmed Jumma at Spray -On PJC., a manufacturer of industrial spraying systems for the automotive painting industry. Dura-stick had providing spray-On with a variety of warning and instructional labels for about 20 years. Ahmed has been very pleased with the Dura-Sticks performance, in particular the quality of its manufacturing department under the direction of Hussain Ibrahim. After giving Mohammed another excellent vendor evaluation report Ahmed began to talk about a new project that Spray-On were involved in for a paint sprayer for household consumer use that required a seven colour label with very precise graphics.
Ahmed explained that this was the biggest project that spray-On had been involved in recent years. He said that it would mean a label company could get a very large order. He asked Mohammed "Does Dura-stick produce these multi colours, consumer type labels?" Mohammed thought for a moment. He knew that if he said yes it would give him a big chance to get the contract and he reasoned that Dura-Stick MIGHT be able to handle the job even though they were currently only experienced in two colour labels. Almost immediately he said "Yes I am sure we can handle this." "That's great news said Ahmed. Take this sample and let me have your proposal by next week. I hope it looks good because I would feel very confident if I knew the project was in the hands of your excellent production team."
Mohammed went back to his company and gave the sample to Faisal Rashid who is responsible for costing and preparing quotes for new opportunities. Faisal took one look at the sample and said immediately "we cant make this, we don't have the machinery, we will have to sub-contract this one out." Mohammed heart sank into his shoes. He knew that Ahmed would only give them the contract if the labels were produced at Dura-Stick's factory. Yet, Mohammed still let Faisal prepare the proposal which he then presented to Ahmed the next day. Ahmed took a look at the proposal. He was shocked. He said "your prices are 20% higher than your competition, that is a lot. I am not sure if the board of directors will agree that price, but let me see what I can do."
Mohammed knew the price would be high as the cost had to include the cost of another company producing the labels as well as Dura-Sticks own profit margin. He responded to Ahmed "Well you know the quality of what we provide and how important the project is to your company. Isn't it worth 20% for the peace of mind you will have?
Next day Mohammed got a phone call from Ahmed "Congratulations, Mohammed, Dura-stick have been awarded the business. It was a tough sell to my people, but I convinced them that extra money would be well spent because of the excellent production department you have and the fact that Hussain Ibrahim will personally manage the project."
Mohammed had to stay quite. He knew that Hussain would not be involved as the labels would be produced by Labeltec in Dubai, who wouldn't then sent the labels to Dura-Stick for shipment to spray-On's facility. Mohammed knew that Ahmed would be completely satisfied with the quality of the labels as Labeltec had a very good reputation. Besides, this order was crucial to his job security, not to mention the well-being of his company. While Ahmed continued to explain his company's reason for awarding the contract.
