University of Toronto JRE 410 Case 0 Canadian Auto Parts

1. KEY QUESTION - Situation and Question
● How to price their headlight system?
● what are other companies offering?
● unprecedented delivery rate, volume, market
● supplier has advantage bc Japanese desperate
● Do they believe the $43?
● losing money at new plant currently
2. INPUT INFORMATION - Proof, Actions
External: Japanese Company and Market Internal: Canadian Auto Parts
Positive
● Overheard the $43
● Running into trouble - need rush delivery in
7 months
● Nervous employees ⇒ bit more
impulsive and want to make
decision right away
● General manager can make decisions
without higher authority or further
checking/discussion
Positive
● We think we can deliver for this
customer with $18 cost, $22 would
give $4 profit margin + make plant
profitable right away
● New customer would enable us to
make our plant profitable and
working at full capacity
● Expanding our company growth
● Yoko understands at some Japanese
Negative
● We have never worked them before (new
market and customer)
Negative
● Overheard the $43 - Yoko is bad at
Japanese, maybe miscommunication
● Unprecedented delivery rate, volume
(1 million units)- don’t have historical
information on how to pric