STR.9:5.1 - SensorCo: preparation beats a viable rival only under stated conditions
All facts in this case are constructed. SensorCo can sustain its current device and service contracts for twelve months. The Board seeks a repeat paid contribution less exposed to generic-inspection price competition while protecting service and incident reserve.
Two prospective customers may discuss a bounded paid service trial next quarter at a price ceiling, subject to agreement and permitted use. Four funded internal days before the next Board consideration can complete costing and specify a possible trial. They could instead improve device diagnostics.
The current comparison concerns those four days and their contribution to the twelve-month question. It does not compare an already successful service business with an assumed failing device business.
For the exit comparison, assume that orderly exit and device continuation both satisfy the protected-service requirement under the three conditions below. The supplied comparison for this twelve-month decision includes the exposure avoided, net disposal proceeds, the best attainable use of released resources and any later consequence material to the choice. Under the Board’s criterion, exit’s supported advantages are outweighed by the continuing device contribution forgone and the full customer-transition burden.
| Condition at the relevant horizon | Comparison with device-only continuation and diagnostic work | Supported return |
|---|---|---|
| Commoditization continues and an accountable-service opportunity remains attainable | Preparation can establish whether a relevant service arrangement is economically plausible; diagnostics improve the viable current direction but do not answer that question | Prefer the bounded preparation at the Board’s accepted four-day sacrifice; keep the twelve-month service direction open |
| Purchasing freezes throughout the horizon, preventing a useful paid trial | The preparation no longer has the stated opportunity to inform this choice; device continuation supports existing obligations | Prefer device-only continuation and retain the four days for diagnostics |
| Data reuse is restricted | A permitted customer-local service might still be possible, while cross-customer licensing requires its own right | Continue preparation only if an attainable determination leaves a relevant permitted option; otherwise prefer device continuation |
The criterion is the Board’s supplied trade-off, not a universal demand for experimentation. The third row is conditional rather than automatically pro-service. Licensing is not currently selectable without its required reuse right. Under the supplied whole-consequence comparison, continuation is preferable to exit. Reopen that comparison if an exit benefit, transition burden, continuing contribution or protected-service condition changes enough to reverse it; continuation need not become infeasible for exit to become preferable.
A complete cost calculation can also close the service question. If no relevant permitted configuration can cover delivery cost at attainable customer terms, the recommendation is device continuation without a trial. If a cost component is missing, the comparison remains unresolved.
Later capacity arithmetic answers another question. A proposed 78-person-day configuration fits the stated 80-day ceiling with protected service and reserve, but that alone does not show strategic merit or delivery capability. Within its six platform days, two preserve device-compatible interfaces and instructions, postponing a two-day service-diagnostic enhancement. That is the cost of the fallback through the first staged decision. It differs from the four-day device improvement forgone in the present preparation choice.