The Pollock's small Bakery is faced with a big decision on whether to accept a proposal from an airline food supplier, which may significantly change its future business if it does accept the proposal. Considering the various issues and weighing the alternatives available, I would recommend that John accept the proposal.
Though enjoyed a steady increase of business, the Pollock's is experiencing some problems: high cost, extended product line with small-volume items, fully occupied schedule, unprofitable, less brand equity, imminent competition threat. The core problem is how to transform the bakery into the Brownie Factory to ensure long-term profitability.
Accepting the proposal could effectively solve most of the problems. By cutting the size by 1/3, cost could be lowered down, quality maintained, capacity increased, brand equity easily established, overwork time lessened. Most importantly, profitability could be achieved. The contract could bring 4000*13 * [(0.3-0.15) - 0.03)] = $6,240 with high possibility of future business.
Pollock's could also use the brand leverage to explore other alternatives: distributors, existing customers, and other airline food suppliers.
The business proposal is an excellent opportunity for Pollack's. It could help Polack's to expand its existing customer base, forestall possible competition, realize a strategic move, and become profitable. This is a good example that marketing to organizations should understand, create and deliver value to clients. By cutting size of the brownies serve the purpose and John should positively consider the proposal.