Mars Incorporated: Online Procurement Harvard Case Solution & Analysis

Question 1

What are the basic types of auctions? [1 point]

            Different types of auctions prevail in the market and all those types could be distinguished with the help of their distinctive behaviors as they operate. There are specific reasons due to which a particular bidder participates in an auction and each bidder behaves differently which can be identified through the reason for which the bidder undertakes the bid and the way he participates in a particular bid. One of the common reasons might be the acquisition of the goods for personal consumption for which the bidder might participate in bid. Another reason might be that the bidder wants to resell those goods for profit or to utilize them for some sort of commercial use. The basic types of the auctions are described below:

Online Auction

            This is the most basic type of auction and it takes place over the internet. All the bidders are required to submit their bids online via the internet and they can easily quote their desired prices for the services and the goods. This type of auction offers flexibility and with its range of possibilities they have become highly popular in the field of electronic commerce. For instance, if there is a real estate property that is to be sold, then it is put over the internet and all the bidders conduct their individual research and then they quote a price for the property. There is a specific time when there would be fixed increments of the bids and the opening and the closing dates for the auctions are also specified. All the bidders, therefore, have to compete with one another in order to win on their price.

Live or Ballroom Auction

            Live auction is also named as on-site auction as it is conducted at a specific site. The site might be a meeting facility or a meeting room of a hotel such as hotel convention or indoor location. Before the start of the auction at the site, all the bidders will have to inspect and perform their individual analysis of the property that is being auctioned. All the pictures, images and other minor details of the property are also revealed to the bidders in the ballroom. All the auctioneers compete with one another at the same point of time in an open space due to which this type of the auction is also referred to as a transparent auction.

Sealed Bid Auction

            This type of bid is more preferred by the auctioneer when he wants to set a more confidential bid. The time when all the bidders can submit their bids is determined in advance and after that the auction commences. Whenever the seller wants to set some kind of optional terms of the sale, then this type of auction is chosen. Also, when the seller wants to sell more than one product or a service or if he wants to sell them in a bundle, then also a sealed bid auction is preferred. All the bidders under this auction can determine the set of the goods, which they want to purchase and hence, they can then bid accordingly.

Question 2

What features of the proposed Mars’ auction present implementation challenges? [1 point]

            The proposed auction of Mars Incorporated presents a range of implantation challenges and the management will have to overcome them before launching the online auction. The first problem was that most of the suppliers of the company had to face brute force reliance on price and this happened many times. Therefore, the management of the company had to show more efforts so that fruitful relationships could be maintained with the suppliers.

            Another challenge in the implementation of this online auction was that most of the items that the management wanted to purchase comprising of the purchasing materials were usually in the form of small lots. As the size of each lot was smaller, therefore, the management and the suppliers had to spend considerable time to deal with each of the individual lot. Furthermore, the management of Mars wanted to avoid the overhead costs such as the administrative overheads for sparing extra time and resources for a large number of suppliers but at the same time the management did not wanted to have a list of just few suppliers...........................

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