You are a senior manager of Company M, which is an electronic equipment manufacturer. You have an existing supplier, Company N, which provides components to several of your company's key products. Company N has worked with your company to develop components for your products in the past and is very familiar with your product lines and expectations. In order to supply to your company, Company N has invested in dedicated and specialized production equipment and processes. Company N has even dedicated an assembly facility near your plant that caters to your company's specific production needs. There is also a team of dedicated design and production engineers in Company N that work solely with your company's product development groups. As company N has made all these investments specifically for your company, it will be costly for your company to find a comparable alternative supply source. In a sense, both companies are "locked into" this relationship.

Decision:

Given the high frequency and volume of the components that your company needs for its key products, securing a reliable supply of these components with competitive pricing is very important. This objective is further complicated by fluctuating component price driven by competing global demands and limited supply. Recently, there is a discussion at your company about the possibility of acquiring Company N. Acquiring Company N is financially possible for your company. It will integrate your company's supply network and exclude Company N's product and service from your competitors. Securing access to this supply source should prevent your company from price hikes in key components provided by Company N. However, doing so will increase management complexity for your company, and it is unclear whether your company can improve or even maintain the current component cost by acquiring Company N . Alternatively, your company can negotiate with Company N and sign a long-term exclusive dealing contract with explicitly set price range and price protection clauses. Signing such a long-term contract should prevent your company from price hikes in the key components provided by Company N unless some drastic events occurs and change Company N's cost structure completely. Doing so will also shield your company from the complexity of managing the operations of Company N. However, the exclusive dealing contract will also prevent your company from buying the components from Company N's competitors even when other suppliers become more competitive. As a senior manager of Company M, you need to take a position to support your company's direction of either (a) acquiring Company N or (b) signing the long-term contract with Company N.

Select your decision below and explain your answer. Please I need help with this