Tag Archives: price

The Mindless Game

Strategy is the word we freely use. Strategy as I have seen in my work situations always allude to personal strategy. Because the company as a whole does not have any strategy of its own.  Individual strategy most of the times than not always turns into mind games. While strategy ideally aims for a collective and positive goal, mind games always have selfish motives behind them.

I get terribly frustrated  when the possible deals are lost because of seniors’ indecision. CEO’s constant refusal to take positions has now become infamous in the organisation. VP will take decisions when his self-interest is served. If it is a deal that involves my effort, VP would do everything possible to mis-guide the cartel and CEO, so that pricing, terms etc will be made very stiff.  

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The Colour Extracting company had approached us sometime back for some material. While we had the facilities to do this product, we have never produced it commercially. So the pricing was worked out based on theoretical assumptions.

The purchasing manager of the Colour-extracting company is a good-looking and attractive female. I had met with her once in their office. There was a big gap between their price bid and our quote. I was convinced that our pricing is high because the finance manager must have used his imagination to work it out on a higher side  and the diffident operations managers also would have given their safest figures to the finance manager. If we do a trial production, we could get proper cost observations to work out a realistic price. I didn’t think that CEO would order the factory to do a trial production and to re-evaluate the realistic input-output ratio. 

I thought it was up to me to do something that will trigger events toward this end. I entered the Director’s cabin unannounced. He uncovered his face by keeping the newspaper he was reading on the desk and said “yes?”. I gave brief background and mentioned to him “This customer has a long-term potential. We should take a strategic view and do a small trial even though we may incur costs. Then only we will know what is the achievable costing for this product”. He asked “have you discussed it with CEO?”. I said “yes..but…” I wondered for a second what to say. Without waiting for my answer any further, he said “ok. let me see”

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After two days, I learnt that the trial production was being organised in the factory. CEO did not mention about it to me directly. “Strategy” worked!

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Trial production threw up a surprise to me. We got the same yield that we had calculated in the original costing. How to bridge the price expectations? By this time, I had committed myself so much to this particular business opportunity. I did something which in normal circumstances I would have never done. I proposed to the Purchasing Manager of the colour-extracting company to visit our office and meet with the CEO for final price discussion. While my suggestion sounded very casual and business like, there was a silent intention behind it.  CEO would start ogling at the Purchasing Manager and may try to agree to do the business at a realistic price somewhere close to the customer’s bid.  If I was to deal with this alone, then the profit expectation of 25-30% would remain intact and I would not be allowed to budge at all. The boss behaved exactly as expected – full of show-off, flirty talks, indecent humour, etc. In one stroke, he offered a counter-bid (closer to the customer’s bid) which was accepted immediately. The woman became weary at the end of the meeting. When I saw her off in the gate, she muttered “your boss is very weird”.

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The contract was received in the subsequent week.

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My personal strategy did work. But  there was an unintended  implication too. The purchasing lady gave me a phone call on a saturday. “I am sorry but I have to tell you this. Your boss keeps stalking through smses. My business card did contain my mobile number in it. I did reply him rudely on a couple of occasions, but he is not stopping….I am really sorry that I am talking to you about this…I know you cant do anything in this case….” I uttered some inrrelevant but kind words. My heart knew I sounded fake.

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Day 15

Excerpts from a phone conversation

–         Saw the mail from XYZ corp. How much volume are they talking?

–         They are ready to lift 50 tonnes at our price, subject ofcourse to approval of the factory. They would like to visit us.

–         Hmmm…no issues…but we do not want to be taken for a ride!

–         I’m not sure I follow, how can we be taken for a ride in this?

–         It has happened in the past, where the customers have visited us, but never bought anything after they left.

–         That means they did not approve our facilities.

–         Remember that you have to have eye in your head while talking to me (What is the meaning of this expression? I have never heard it before)

–         Hmmmm

–         Are you clear?

–         Should I tell the customer that they cannot visit us and they have to buy without seeing the factory?

–         Listen…you are not allowing me to talk.

–          ??

–        There is no harm in having them visit the factory. But we should make sure they buy good volumes.

–        As I said earlier, this customer buys in excess of 2000 tonnes from the industry. The list of items and quantity they buy is already with us which I have shared with you. If you want, I can ask them to send an email confirming all the items they are interested to procure from us.

–     no..no..no….dont do that….we may not be in a position to do all the items they buy.

–     then what should I tell them?

–     See I have no issues in talking to them…but 50 tonnes is nothing. MNO corp wanted 3000 tonnes, we said we can give only 500 tonnes.

–     Ok, then let me tell them they can’t see the factory and 50 tonnes is too less.

–     no. You are hurrying again. I have no issue with 50 tonnes….but the price they give is less….see we have negotiated so well with MNO corp and got a good rate.

–     I have quoted Rs 5 per kilo more than that, sir.

–     yeah yeah….tell them 50 tonnes is too less.

–     But I understand that we will not be able to produce the full qty of what we agreed with MNO, this 50 tonnes we have offered only because XYZ is ready to pay better price….

–      is it?  We should be talking to big guys.

–      XYZ is the largest wholesaler with national distribution in USA. You can check about them in the market. You will know.

–      Yeah I know…I know them very well….They are based in London. I know.

–       No sir, they are in New York.

–       Yeah yeah you are right.

–       I dont understand why they want to visit the factory. All these buyers are silly. They waste our time and energy.

–       Let me tell them then we are not interested.

–  You are hurrying…..I have no issue….am I making myself clear (Note : all his favourite phrases! He has uttered them in one go!)

–          ??

– Do one thing! Talk to VP and then let me know what he says. I am about to board the flight. I am headed to Bangalore for a lunch with Jt.Secretary.

I then dialed the factory to talk to VP.  The operator told me that he has gone to attend a “mundan” ceremony of one of the staffs’ son. It took sometime to collect my thoughts. What should be the line of action now?

I am not hurrying. I have no issue. It is clear that I am going to continue reading the e-Book that I was reading earlier (before I received the call from the CEO!).