INGERSOLL RAND

ANSWER(1): Anand’s reaction towards Sanjay’s order win can be considered genuine but
not at all appropriate. Since Sanjay had put a lot of efforts in cracking the deal after regular
follow-ups with the team at Deccan Textiles, it was not righteous at that very moment to
break before Sanjay that the deal is not at all profitable and they cannot finalize it. This kind
of behavior might induce a lack of motivation towards further deals by the sales team and sets
a boundary around them to consult and then move forward in such deals. Concluding it,
Anand’s reaction might be in IRL’s interest but deducing a better way to communicate this to
a senior sales executive who is exhilarated to have converted this deal would have been in
everyone’s interest.

ANSWER(2): Due to its aggressive buying techniques, Deccan Textiles has faced and is
prone to following damages:
 The company wants to pay the least price and take maximum benefits from a product
they are investing in. This might lead the suppliers to not be any more interested in
finalizing any kind of deals with the company due to negligible or no profit margins.
 Due to the policy of buying any machinery at lowest price possible, the company’s
manufacturing plant has seen several breakdowns affecting the per day production
capacity thus increasing the operational charges.
 Due to frequent breakdowns, there is a lot of maintenance required for the equipment
in which the maintenance department fails due lack of technical expertise or lack of
bandwidth, however if the company would have maintained the relations with the
suppliers and have bought a quality product, they could have got that assistance from
the post sales service team of the suppliers.
 The company has been experiencing poor performance of compressor for over 3 years
and every time the machine trips, the company incurs a direct loss of 8 lacs in the
revenue and the frequency of such failures being approximately 15 times an yeas, the
company has incurred a total loss of approximately 3.6 million in three years.
 Apart from the revenues lost due to machine breakdown, there are various other costs
that company has to incur as a part of maintenance such as reparation costs. They also
have to pay the labor overtime due to such breakdowns. This all sums up to various
additional cost that they bear in operations.

ANSWER 3:

There are four options available to Anand:

1. Accept the deal as finalized by Sanjay and sell the machine at 93 lacs
2. Reject the deal and adhere to guidance price at IRL
3. Take a consultative approach towards Deccan Textiles to make them value the
machine appropriately
4. Reduce the features offered on the compressor to reduce costs associated

In the available ones, last option might help through cutting out any features that Deccan
Textiles is not looking forward to in an air compressor.