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Read the two articles and write your response in 150 words, in two different docx file.
To Bid or Not to Bid
Q1 - What other factors should Marvin and his team consider?
Deciding whether to bid on a project if often more difficult than it appears as there are plenty of subjective and objective factors that need to be taken into consideration. Outlined below are some of these factors that Marvin and his team may need to consider before making the bid:
The case highlights that there is a potential lower profit margin on this and other future contracts, but greater overall profits and earnings per share, however, this is something that he will need to consider deeper:
Is this bid competitive? To win, will Marvin have to bid so low that he loses all profitability?
Does he have the right expertise and man-power to execute this project in a profitable manner, bearing in mind that this is at least a 10-year project.
Competition Win Impact:
This to me, is as important as potential profit, simply because due consideration needs to be given to the impacts of winning this bid:
Releasing the detailed cost structure to this client can potentially leave Marvin’s company exposed to its competition and potentially impact future bids, as this structure is potentially the ‘secret-sauce’ that Marvin’s company uses to be operating in this space.
Marvin can potentially let competitors get their foot in the door, and heavily sabotage their future by disclosing this confidential information.
Existing clients requesting for discounts on current contracts and potentially request for more competitive pricing on future contracts.
Payment – Will Marvin have to fund this project?
Since it is at least a 10-year contract, what are the payment terms going to be? Is he going to have to fund this and only get paid upon completion?
Assuming he gets paid annually, how does this impact his business? Does he have to miss out on other, more profitable/strategic opportunities as he potentially may not have the capital, manpower or resources to use?
2 – Should they bid on this job?
While this is a long-term contract (10+ years), there is enough reason to believe that there is substantial risk associated with bidding on this contract. From the case-study, it is evident that Marvin and his team usually work on fixed-price contracts, and it therefore very likely that their level of skill, familiarity and expertise in working on such projects is likely to be higher, and they are also less likely to run into issues (cost, management, etc.). In addition to this, there are a few pros and cons of bidding that I have identified:
Pros of not bidding:
Ability to focus on other clients with (potentially) higher profit margins
Ability to compete with other companies for later contracts based on the winners exposed cost-structure
Prevent release of company’s detailed cost structure
Cons of not bidding:
Potential removal of Marvin’s company from client’s bidder list
Potential to lose ability to be considered a strategic partner
No long-term contracts for Marvin’s company
Given the current facts, I believe that Marvin’s team may not be the right fit at this time to fully execute this bid. The lack of expertise, poor scope and the requirement to expose their detailed cost structure is enough reason for them to decide against bidding.
While they may be able to hire externally or sub-contract, however this too will significantly impact their bottom line.
: Page 1474 and questions in 1475.
Bidding decisions are critical in the development business as most temporary workers rely on upon the focused offering framework for their work. Since the 1950s, analysts have created models keeping in mind the end goal to help with these choices.
Past research discourse of aggressive offering methodology has practically only been centered around the utilization of scientific models, be that as it may, no solid proof of receiving the created models by contractual workers. Then again, a few early types of research advocate the utilization of contrasting options to scientific models, as offering circumstance investigation, the thought of various market situations and displaying focused offering as a successive procedure. This exploration will take after this proposal of finding and dissecting the d2b procedure to help comprehension and building the Decision-to-Bid (d2b) demonstrate. That if seriously made, can cost a few a huge number of dollars in unsuccessful offer readiness costs in one major venture offering or during that time for a few offers. That is a major venture on a high hazard speculation with no certification of return.
According to my view here are some of the factors Marvin and his team should consider in every bid/no bid decision.
1. Bid Cost Tenability – What will it cost (time/cash) to partake in this offer? What is the likelihood of winning the offered?
2. Profit Potential– Can I make a benefit on this Project?
A. Do I have the correct mastery and labor in-house to do this project beneficially?
B. Is this an aggressive offer? With a specific end goal to win, will I have to offer so low that I lose all gainfulness?
C. Historically, what was my benefit on activities in this industry or from this client?
3. Payment – Will the customer pay me in a sensible measure of time, or will I finance this project? To what extent would I be able to store it and by what means will this affect the business?
A. Competition Win Impact– Who is my opposition?
1. Do I need my rival to get their foot in the entryway with this client? Do I have to win this project basically to keep my "insider" edge with this client?
2. Scope – Is the extension very much characterized? On the off chance that ineffectively characterized, will this put a strain on my association with the client (change arrange hellfire)?
3. Terms and Conditions – would they say they are excessively cumbersome? Will I open myself to an abnormal state of hazard?
4. Future Opportunity – If another client, industry or innovation – would the organization advantage from this open door either regarding increasing new aptitude, involvement in another industry, or building up another client relationship?
According to my view Marvin should bid by following the above factors. And the reason why I suggest bidding on the job is
I. It’s a Long-term contract, where lot of companies doesn’t get such a chance from their clients.
II. There is a good profit ratio compare to the previous contracts
III. And workable standard for getting more contracts with expected profits and a healthy relation with the client
IV. And at last if they decide not to bid the Marvin’s company would lose the chance to bid in future biddings and the profit margin from client will be reduced
: Page 1474 and questions in 1475.