2. About the company:
Switzerland based
industry
Sales office in 23
countries
Sales: 5.2 Billion SF
Profit: 426 Million SF
Industrial Plastics, diesel
engines, Air and gas
compression and
Industrial components
Mainly focuses on design
and development of
industrial components
Industries :aerospace,
automotive and
transportation vehicles
3. Product :
Air and gas compressors:
Use: Industrial plants
Purpose : Regulating the flow
of liquids and gases
throughout the
manufacturing plants and
power stations
Areas of sale: 40% Europe
and rest from Asia, Middle
East and other countries
Type : Standard or specialty
SUPPLIER
ZURIN
OEMs/
Others
4. Competitive advantage and
suppliers:
Competitive advantages:
Ability to solve complex
technical problems
Product quality
Durability
Suppliers:
Heavy dependencies on
engineering and
development skills of suppliers
Huge time/ R &D to develop
products
5. Issue
Ericsson Metalworks increased price of XK1000 steel by 3 times
1.Fixed
price
2.No
disclosure
of
productio
n cost
Zurin’s
primary
exclusive
supplier
Swedish:
Ericsson
Transpare
nt pricing
Not
enough
productio
n
capacity
to meet
Zurin’s
demand
French:
Gordier
6. Risks involved
Dumping existing steel producer(Ericsson) and signing with someone else
is a very time consuming process
Very few options
Ericsson R&D unit is critical to success of Zurin
7. Recommendations
Negotiate with Ericsson for a linear increase in price of steel(for current
pending order)
Zurin can negotiate on price terms by promising a increase in orders for
XK1000 and XM5000 from Ericsson
Lobby Gordier board to increase their capacity. If needed, offer special
partnership (R&D etc.), long term agreements
Look at proposals of Hiromishi Steel, Viktor Tredzk (long term)
Pay Ericsson for their R & D expenditure
