Essay on Ckc Case Write-Up
What are the interests of the various players in the Varacil market?
* CKC: Obtain the least costly ending for the lawsuit, considering the future effects of the outcome with respect to market share and future profits.
* Tolemite: Obtain a payment of all past and future liabilities at the highest royalty possible, or the highest payment.
* BARD: They would benefit from two situations:
1.CKC wining the trial, as they would not have to pay royalties anymore, which could decrease CKC’s cost competitive advantage if BARD decides to lower the price of the product. Thus they can become more competitive and may increase their market share this way.
2. CKC having to pay a royalty of 4% or …show more content…
Communication: Mr. Purcell should state that both companies would be better off without going to trial, as the money and time used in the process could be better allocated. Moreover, if they did go to trial, CKC would win and Tolemite will stop receiving the royalties he received from BARD, in addition to the potential royalties they could receive from CKC, which might be the reason why BARD is involved in the matter. Immediately after, he should state that CKC would have much more to gain from proceeding to the trial than paying a royalty of 20%. That such royalty would make CKC’s product unprofitable, thus the dollar amount Tolemite would receive will be lower than if they had a lower royalty that did not affect CKC’s product competitively.
For their product to continue being competitive, the royalty paid cannot exceed that of BARD, to maintain the company’s competitive advantage. Moreover, as CKC would win if they went to trial, the royalty should be less than that of BARD. I would suggest a royalty payment of 3.5%, instead of 2.5% that was previously suggested. If a deal is made, the royalty should be somewhere between 0 and 4% for CFC survival as a company. He should mention that the only ones that win from the trial are the lawyers and advisors and that the ones that are loosing in the process are “you Mr. Mantiris, I and our…