Negotiate a better deal with Hi-Valu
Due to Hi-Valu's relative strength and bargaining power, the Challenger offer seems very one-sided in Hi-Valu's favor. It's fair for Baldwin to negotiate a better deal with either a better price or more favorable terms as to inventory, goods on consignment, and payment of invoice. The latter seems more promising, as Hi-Valu, which is in the discount business sector, could be more sensitive to price.
Arrange external funding
Unless Baldwin can arrange sufficient funding, all the efforts for the new business will be in vain. In light of the company's current financial situation, the best way to arrange funding is to seek short-term financing from Hi-Valu to get the business off the ground. Another solution could be to obtain a better term with Baldwin's supplier. The company's increased demand for material could give it more power to bargain a longer payment period or better price.
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