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Yogesh Nema (047) Varun Mahajan (044) Kasi Muthu (020) Prashant Bhaskar (029)

The Case : Customer Relationship Management Strategies The Company : Zurin Industries Switzerland Based Sales of Francs 5.6B , profit 426 M, RO Sales 7.6% Industrial Plastics, Diesel Engines, Industrial Components, Air & Gas Compressors The Product - Air & Gas Compressors Regulating flow of liquids or gases in plants Standard or Specialty 40% Sales from Europe , Others from US , Asia
Supplier Zurin OEM/Others

Competitive Advantage Ability to solve customer problem Product Quality Durability Suppliers Heavy dependence of engineering and developmental skills of suppliers Lot of time / R&D to develop new product

Sourcing Strategy Inception Participation Decision R & D Sourcing Production Sourcing Swedish Ericsson Fixed price No disclosure of production costs Zurins primary almost exclusive supplier French - Gordier Transparent Pricing Zurin bought total quantity produced operating at maximum capacity

The Issue : Ericsson has increased price of XK1000 steel 3x times

How important is the relationship with Ericsson

Ericsson R&D unit is critical to success of Zurin

Can price be negotiated with Ericsson?

Zurin can negotiate on price terms by promising a increase in orders for XK1000 and XM5000 from Ericsson

Negotiate with Gordier regarding the increase in production Split R&D costs between Zurin and Ericsson Pay Ericsson for the R&D expenses