Givaudan Flavors, its Major Problems and Possible Soltions - Case Study Example

- Solution B. In the scheduled meeting, both Tastyco and Givaudan should emphasize aligning their goals and objectives to ensure that adequate benefits are earned by both these ends. Rather than pressuring Givaudan to reduce costs to be categorized as a Strategic Supply Partner, the meeting should focus on comparing and analyzing the benefits as well as drawbacks that they will have to face being in agreement and even if not being in agreement.- Advantages A. Solution A, as suggested in the above section, is quite likely to result in higher demand for Tastyco, which will, in turn, result in an increase in its profit margin.

By ordering larger volumes from Givaudan, Tastyco will have to implement push-selling strategies in order to build better customer loyalty and thereby augment selling capacity. This, in turn, will also motivate Givaudan to decrease its price per unit, offering cost benefits to Tastyco and on the other hand, avoiding any decrease in its profit margin.-Disadvantages A. In the long run, this solution may impose a direct negative effect to the break-even points of Givaudan, as any decrease in the quantity demanded will result into lowered profit margin and hence, may force the two partners to emerge.

Hence, the solution may not be viable in the long-term.Advantages B. Conducting a meeting between the two parties can result in a mutual agreement, which can be beneficial to both the companies. Being able to relate their aims and objectives, Tastyco and Givaudan can further result into a common objective satisfying their individual value targets.Disadvantages B. In order to solve the pricing problem, negotiation between Givaudan and Tastyco is a necessity. However, if Givaudan is pressured to change its pricing strategies, there are high chances that it might seek for partnership with larger competitors of Tastyco, raising differentiation concerns.

In addition, departing their ways may reduce market shares held by both the companies as well as result in Tastyco losing the value-added advantages that it used to retain from Givaudan.