Strategic Investment Decision Making Case Study

Strategic Investment Decision Making - Case Study Example This paper addresses a critical question "Should TAM Airlines buy Airplanes of the Model: Fokker F-100 or the Airbus A-320" The research is carried out in the form of a case study where drawing information from different search engines such as Google and previous research we compared the two aircraft. Drawing from prior studies the evidence suggests that Airbus 320 represents a better option for TAM Airline considering, it flight capacity, its flexibilities, and its technological advancement attached to the changing time. Airbus 320 offers the management an opportunity for a long term suppliers relationship management. The difference is attributed to differences in the level market systems that characterized both economies. Fokker F100 is characterized by a Short route for regional flight limited to 3111km where as Airbus 320 is a long route flight. The features and flexibilities offered by airbus gave us grounds to recommend it to TAM Airline Adler (2000) suggests that strategic investment decision making involves the process of identifying, evaluating, and selecting projects that are likely to have a big impact on a company's competitive advantage. Strategic investment decisions influence what the company is doing, that is, the set of products and services as well as their attributes that it offers to customers. These decisions also influence where the company offers these products and services and how it offers them. (Adler, 2000). It is therefore very essential to ensure that the right decision is made as regards the products and services on offer, where such products are offered and how they are offered. Investment decision making involves the elements of a classic cost-benefit analysis. (Adler, 2000). According to Akalu and Turner (2001, 2002) finding a reliable method of investment appraisal is not only a matter of concern for company management. Investment appraisal has now become a matter of concern to both share holders and investors. (Turner, 2001, 2002). Customer satisfaction lies at the heart of all modern thinking on quality and business management. Customers and suppliers are important stakeholders. "Stakeholders are those individual or groups who depend on the organisation to fulfill their own goals and on whom, in turn, the organization depends" (JSW: 2005:179). TAM Airlines now faces a critical purchase / Suppliers management decision to discontinue with it much heralded Fokker F-100 and go in for the Airbus -320. Thus, the central theme in this paper is to find out which of the two airplanes represent a better investment or purchase decision for TAM Airlines. 1.1Problem Statement and Research Questions The supplier selection process must be an integral part of an effective

Conservative Approach of Organosations Essay Example | Topics and Well Written Essays - 1500 words

Conservative Approach of Organosations - Essay Example Some say, â€Å"Attack is the best defense† while others preach, â€Å"defense is the best attack† (Shim, pp. 62, 2011). This paper is an attempt to capture a glance of this debate by exploring the arguments of both sides of the debate. Discussion Arguments in favour of aggressive approach Following could be some of the advantages in favour of the aggressive approach of companies. First, it is always difficult for firms to compete with each other when the switching costs incurred by the buyer for a product or service are high. This is more likely to be true in the technological market since the switching costs goes on to include the high fixed investments, training expenditure and others (Markides & Geroski, pp. 139-140, 2005). Therefore, when a new firm tries to compete with the first mover in the industry, it always has to consider the switching costs of buyers that are high in case of technology related or technology based products. Therefore, the new firms has to co me up with a value proposition that not only offers more value than the existing product but that value should also be sufficient to induce the customers in incurring the switching costs (Geel, pp. 351, 2011). ... 20-21, 2009). Third, there are no doubts in the fact that firms that are quick in capitalizing on technological opportunities also develop a unique relation with their buyers that other firms fail to have. These firms get more time to exploit the distribution and supplier channels thus their relationship with all of distribution and supplier channels stands out of the crowd (Skarzynski & Gibson, pp. 168-169, 2008). Further researches reveal that not only firms that capitalize on technological opportunities end up getting hold of those superior and innovative technologies but at the same time, they also end up acquiring the lion’s share of many other resources associated with the same. For example, if there any assets or natural resources associated with the business that is unique, the firm may be able to acquire that on well below the market price or may have great bargaining advantage over the suppliers, which other firms will not have when they enter into a crowded market ( Shim, pp. 62, 2011; Porter, pp. 46-47, 1998). The importance of adopting new technologies is also evident from the blue ocean strategy as well, which is, in itself, a new and unique chapter in the field of strategic management. The strategy argues that the entire field of strategic management is faulty and flawed in the sense that it encourages firm to remain and fight in the red oceans. The blue ocean strategy divides the marketplace into blue oceans and red oceans. Most of the firms are in Red Ocean that is characterized by their fierce competitive environment, cutthroat competition, increasing pressuring on firms to beat competition (Markides &