Essay on Precision Worldwide, Inc Havard Case Study

Due to the profit margin being over $1000/100 rings sold, PWI will be able to completely wipe out their debt in a matter of a few months. Although there will be competitors selling other plastic rings, they will be few and far between. PWI will be one of the first companies to sell it therefore obtaining more of the market share and becoming a leader in this field. The fact that PWI is worldwide will prove to be an advantage in generating new clientele in new areas by being the first to have the merchandise in their regions. By creating new clientele, PWI will produce larger profits and hopefully due to the quality of their product offerings, trust and loyalty in the new clientele. Company shareholders will also have more trust in PWI for making a wise decision and eventually increasing the value of their shares. Fortunately for PWI that the profit margin is high enough to offset the quantities of plastic rings that are sold. Since they are stronger and more durable than the steel rings, less plastic rings will be purchased.
One of the reasons that Precision Worldwide, Inc. needs to take the risk in producing the plastic rings is because they can afford to halt production of the steel rings. After taking into consideration their opportunity costs it would be the wisest decision