Strategic Investment Decision Making - Case Study Example

This paper addresses a critical question "Should TAM Airlines buy Airplanes of the Model: Fokker F-100 or the Airbus A-320" The research is carried out in the form of a case study where drawing information from different search engines such as Google and previous research we compared the two aircraft. Drawing from prior studies the evidence suggests that Airbus 320 represents a better option for TAM Airline considering, it flight capacity, its flexibilities, and its technological advancement attached to the changing time.

Airbus 320 offers the management an opportunity for a long term suppliers relationship management. The difference is attributed to differences in the level market systems that characterized both economies. Fokker F100 is characterized by a Short route for regional flight limited to 3111km where as Airbus 320 is a long route flight. The features and flexibilities offered by airbus gave us grounds to recommend it to TAM Airline Adler (2000) suggests that strategic investment decision making involves the process of identifying, evaluating, and selecting projects that are likely to have a big impact on a company's competitive advantage.

Strategic investment decisions influence what the company is doing, that is, the set of products and services as well as their attributes that it offers to customers. These decisions also influence where the company offers these products and services and how it offers them. (Adler, 2000). It is therefore very essential to ensure that the right decision is made as regards the products and services on offer, where such products are offered and how they are offered. Investment decision making involves the elements of a classic cost-benefit analysis.

(Adler, 2000). According to Akalu and Turner (2001, 2002) finding a reliable method of investment appraisal is not only a matter of concern for company management. Investment appraisal has now become a matter of concern to both shareholders and investors. (Turner, 2001, 2002). Customer satisfaction lies at the heart of all modern thinking on quality and business management. Customers and suppliers are important stakeholders. "Stakeholders are those individual or groups who depend on the organisation to fulfill their own goals and on whom, in turn, the organization depends" (JSW: 2005:179).

TAM Airlines now faces a critical purchase / Suppliers management decision to discontinue with it much heralded Fokker F-100 and go in for the Airbus -320. Thus, the central theme in this paper is to find out which of the two airplanes represent a better investment or purchase decision for TAM Airlines.1.1Problem Statement and Research QuestionsThe supplier selection process must be an integral part of an effective