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Fe'Nix Del Sur

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Case Discussion: Fe’nix del Sur The Fe’nix del Sur (Fe’nix) case presented information used for making a major business decision. A mass merchandising department store offered a contract to Fe’nix that would have a substantial impact on the firm’s annual growth1. Given the background information on Fe’nix, the market trends, competition, and details about the contract, the company executives in charge of making this final decision should reject the contract.
A main reason the national sales manager, Myron Rangard, should reject this contract is because is because of the contractual details. The contract stated that it would buy at 10% below the company’s existing prices; while this may create sales volume, it may not necessarily create gross sales profit due to the lower price. Also, while purchases are estimated to be at $4 million annually, the company’s lack of market research hinders them because the firm is unaware of consumer trends. For example, they do not know if replica sales have increased or decreased in the last 5 years, if replica sales are trending upwards or downwards, or if authentic artifact sales have increased or decreased in the last 5 years. Without this information, the figure of $4 million annually in this contract has no reference point. In addition, Fe’nix would have to triple its replica production to satisfy the contractual obligation. This another aspect of the contract that could take away from profits due to substantial budget increases. They need to renegotiate the contract to sell to a percentage lower than 10% to make up for the replica production increases. They also need justify an increase in the initial purchase of $750,000 with market research showing that replica demand is increasing and that investing more than $750,000 initially will be beneficial for both sides.
Another reason why this contract should be

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