Print for Power
Brief Introduction of PFP Ltd.
Print for Power Ltd. (PFP) is an Australian company that largely concerns itself with the provision of information and high quality research to leading paint manufacturers like British Paints and Dulux for purposes of paint development. Headquartered in Sydney, the company is essentially a limited research/merchandising company.
With regard to the new line of paints, PFP seeks to be a pioneer in the production of a highly innovative paint product. The company also seeks to promote the utilization of paint products that are not only durable and of high quality but also eco-friendly. All things held constant, PFP Ltd. plans to have this new and innovative product under full commercial utilization within two years of introduction into the marketplace. Although, the company has an initial partnership with Dulux, it is expected that in two years, the new paint will be available in all major brands.
According to Hill and Jones (2012, p.15), “the values of a company state how managers and employees should conduct themselves, how they should do business, and what kind of organization they should build to help a company achieve its mission.” PFP’s values underscore what is truly important for the company. These values are essentially the underpinning of PFP’s culture. To begin with, the company can be regarded truly environmental friendly. This is particularly the case given its ongoing and future projects. The company is also socially responsible — it is not concerned with profit making alone.
Company Effects on Environment and Society
At the forefront of PFP Ltd.’s vision are environmental concerns. To address environmental concerns, the company has amongst other things expanded its research and development towards a paint which in addition to providing aesthetic enhancements to houses is also productive in many other unique ways. By developing a new line of paints, PFP is seeking to popularize the use of paints that are not only eco-friendly but also innovative. This new line of paints is expected to “shake” the paint industry, especially given its new and advanced features. On the societal front, the production of the Power Paint (the new line of paints) will be of great benefit to entire communities. This is more so the case given the need to make energy more self-sustaining and affordable.
Partnership with Dulux
The final product will be commercialized through a partnership with Dulux. As per the arrangement, this will see Dulux offer the product for sale under its own brand name. In exchange for the access it will have to PFP technology, Dulux will be expected to pay an annual royalty fee. The said fee is expected to be 15% of the profits Dulux rakes in from the sale of PFP paint. Thus with regard to merchandising, PFP Ltd. plans to have a main partnership with Dulux. On the production front, the company will enter into a one year trial period partnership with Dulux for the production of Power Paint. Mass production of the same will largely be dependent on the results of this trial.
Benefits of Partnership
One of the key benefits of PFP’s partnership with Dulux is the specialization each partner brings to the arrangement. Currently, Dulux has an elaborate distribution system and sound customer base to guarantee maximum exposure to Power Paint. The company also has extensive knowledge of the industry. On the other hand, PFP lacks all of the above but has the technical expertise to produce and develop highly innovative paint products like Power Paint.
It is also important to note that should there be a need for additional capital to be pumped into this particular undertaking, the two companies could make a joint investment based on the existing partnership. Access to funds would be limited were PFP to go it alone. Indeed, as Miller and Jentz (2010) point out, partnerships permit or facilitate greater capital contributions.
Costs of Partnership
It is important to note that in this case, the returns realized from the venture will be shared between the two companies as per the arrangement I have already mentioned elsewhere in this text. PFP would keep 100% of the profits were it to pursue the undertaking on its own. Decision making could also be slowed down as consultations have to be made before critical decisions with regard to the new product are made. For instance, should PFP deem it appropriate to change the formula of the new product, it could be forced to first consult with Dulux based on the partnership existing between the two companies.
Hill, C.W. & Jones, G.R. (2012). Strategic Management Theory (10th ed.). Mason, OH: Cengage Learning.
Miller, R.L. & Jentz, G.A. (2010). Business Law Today: The Essentials (9th ed.). Mason, OH: Cengage Learning.
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