• Young company (c. 2011) • ~12% increased manufacturing cost • Located in our building
WE LIKE THEM
• ~6% reduced manufacturing costs after 1 year • ~11% reduced manufacturing costs after 18 months • Immediate capital costs: ~$560k
• Established company (c. 1993) • 1-2% reduced manufacturing costs • Direct competitor to Fabricorp • Located in Nebraska
BUSSINESS AS USUAL
We already have a friendly relationship with the staff. They are in our building, and it would be easy to work with them to solve any problems that come up. They might be more willing to adapt if we new products as we develop them.
An option that gives us complete control over manufacturing and a better handle on fulfillment. It is a growth opportunity for the company, that could save us money in the long run.
COMPLICATED / DISTRACTION
This is the option most similar to the status quo. Relatively low costs (maybe even better than our current rates) and few required changes in our company strategy.
It cuts into already slim margins. Also, they may not be able to scale up if we need to quickly increase output.
This would be a major shift in our operations, and falls well outside our core competencies. The learning curve is steep. There would also be initial capital expenses.
They have a poor reputation for customer service. We may lose valuable time fixing problems and putting out fires.
I like the idea of working with other startups. I think it is good for the company's image and network. It's fun.
This scares me a bit. I'm not sure if that's because of the risks involved, or just because it is so different.
They are a competitor to Fabricorp, so mentioning them in the negotiation may give us some leverage, in this negotiation or future negotiations.