COMPUTRON

RECOMMENDATION
Thomas Zimmermann, manager of the European Sales Division of Computron must submit a bid to Konig & Cie., AG in order to remain a competitive player in the European computer manufacturer market. Mr. Zimmermann should submit a bid in the amount of $1,101,400 (refer to Appendix A). This bid price is competitive with EDAG, which is considered to be the primary competitor in the bidding process and Mr. Zimmermann expects EDAG to place a bid in the amount of $1,091,200. The Computron bid removes all allocated costs for R&D (8%) and S&A (6%) which is comparable to the 15% European tariff that EDAG has used to undercut Computron in the past. Mr. Zimmermann believes that Computron can charge a premium over the EDAG bid since Computron provides a superior product in addition to the opportunity for Konig to avoid any switching costs associated with moving to a new computer manufacturer.
RECOMMENDATION CONSIDERATIONS
As Mr. Zimmermann prepared his bid for Konig’s business, he considered many different aspects of the market.
? Computron’s strategic position as a high quality computer manufacturer in terms of precision, dependability, flexibility, and ease of operation must be maintained; therefore, Computron must continue to offer a consistent level of quality in the marketplace despite Konig’s invitation to bid with specifications that included machine dependability at a reasonable price.
 
? It is imperative that Computron win the contract bid as Konig makes up 80% of German sales and has the potential to generate up to $4 million in additional business over the next 2 years.

? Computron’s newly built plant productivity is dependent upon winning this bid with Konig. By winnin ...