...S LEGO GROUP: AN OUTSOURCING JOURNEY w 910M94 PhD Fellow Marcus Møller Larsen, Professor Torben Pedersen and Assistant Professor Dmitrij Slepniov wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Richard Ivey School of Business Foundation Version: (A) 2010-11-12 PROLOGUE The last five years’ rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world — the LEGO Group — the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in the company’s roughly 70 years of existence, resulting in a deficit of DKK1.8 billion in 2004, the management had, among many initiatives, decided to offshore and outsource a major chunk of LEGO’s...
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...so hard and needs long time to do it. The set of the robot . The set of the robot . MATERIALS : MATERIALS : Step 1 : First we bring the electric mindstorms NXT motors and add to it the small technic pin . after you add it add the technic axle 8 in the middle to be equal the from the left side add the technic bush (gray). Then push the technic axle 8 inside. Step 1 : First we bring the electric mindstorms NXT motors and add to it the small technic pin . after you add it add the technic axle 8 in the middle to be equal the from the left side add the technic bush (gray). Then push the technic axle 8 inside. Step 2 : Second we bring the technic beam 3 and we put it inside the technic axle then add we add the technic bush (yellow) to the technic beam 3 after that we put the technic pin (small) in the 3 circles put the last two then down the technic bush (gray)add the technic beam 13 and put the technic pin (long ) the last 3 in the right and the first one on the left. Step 2 : Second we bring the technic beam 3 and we put it inside the technic axle then add we add the technic bush (yellow) to the technic beam 3 after that we put the technic pin (small) in the 3 circles put the last two then down the technic bush (gray)add the technic beam 13 and put the...
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...LEGO is one of top toy-making companies established in Denmark. Its core and iconic product is the LEGO brick with its own unique design, interlocking tubes, which can expand building possibilities. In 2004, LEGO started to outsource 80 percent of its production to Flextronics, a large Singaporean manufacturing service provider, but after three years, LEGO had to end this cooperation. Therefore, we are going to do a deeper analysis of this case and have a better understanding of outsourcing. LEGO had two main expectations from the collaboration with Flextronics. The first one was that LEGO intended to run a cost-saving business model by licensing out 80 percent of production to Flextronics. Before outsourcing to Flextronics, LEGO conducted its production mainly in Denmark, the United States, Switzerland and so forth, which are high-cost countries. In order to reduce production cost efficiently and response the global trend that nearly 95 percent toy production went to Asian countries quickly, LEGO chose Flextronics as its partner to accomplish the goal. From 2004 to 2006, some of production capacity in Denmark and Switzerland were moved to Flextronics’ plants in Hungary, LEGO handed over the operational control authority of Kladno site in the Czech Republic to Flextronics, and Flextronics opened a new plant in Mexico; instead, LEGO shut down the factory in the United States. Another expectation that LEGO wanted from the relationship of Flextronics was that the LEGO group would...
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...Bai Bithaman Ajil (BBA) Definition A contract that refers to the sale and purchase transaction for the financing of assets on a deferred and an installment basis with a pre‐agreed payment period. The sale price will include a profit margin. In Islamic finance a sale of goods in which a bank purchases the goods on behalf of the buyer from the seller and sells them to the buyer at a profit, allowing the buyer to make installment payment. A sample calculation of a 20 years property financing is as follows: Assume that you take out a 20 years financing for a house terrace of RM250,000 at a profit rate of 5.88%. The monthly instalments and total repayment would be based on the following formula: (PMT) = [FA (1 + r)n r] / [1 + (1 + r)n – 1] Whereby: PMT is payment of monthly instalment FA is facility amount r is profit rate (per month) n is periodic payment (no of months) Monthly instalment= [RM225,000 (1 + 0.0049)240 x 0.0049] / [1 + (1 + 0.0049)240 – 1] = RM1,596.43 Whereas the Bank’s selling price is = RM1,596.43 x 240 months = RM383,143.20 • Bai Bithaman Ajil means sale of goods with deferred payment, • Bai(sale), Bithaman(price), Ajil(deferment). • BBA is sale with deferred payment and is not a spot sale. • BBA used for financing property, vehicle, as well as financing of other consumer goods. Type of product : - Land / property financing - Vehicle financing - Consumer financing ...
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...When customers believe that an offering has high value they are much more likely to move from satisfied customers and become loyal customers. The customer’s perception of our offering’s price is a key and critical component in the perceived value of our offering. After review of the options for pricing objectives, our UPS Store’s offering of UPS Ground shipping is based on benchmarking the competition and utilizing a competitor-based pricing strategy. The UPS Ground shipping retail rate is set by UPS based on a thorough understanding of their primary competition, FedEx. Our UPS Store prices UPS Ground shipping at the published UPS retail rate. This strategy will allow our UPS Store to leverage the UPS brand to capture the Ground shipping business from our competitors in the Lawton area; a single independent retail shipping outlet that must up-charge to offer the same product. Utilizing a one-price strategy pricing tactic our UPS Store can offer UPS Ground shipping at the UPS retail rates and remain competitive. Our UPS Store offers ground shipping in an approach similar to cost-plus pricing. Our store receives a discount on the retail Ground Shipping rate. This allows our UPS Ground shipping price to exactly match the UPS retail Ground Shipping rate while leaving a margin that represents our markup over cost. Our store is in a position to offer discounts to our customers. This is generally reserved for our B2B customers in the form of a frequent shipper...
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...A competitive advantage is the result of matching core competencies to opportunities. In order to gain competitive advantages, a company should provide their customers products / services of same value with lower price or charging premium prices by providing higher value, which can be done by differentiation (Anon., n.d.). The competitive advantages that Apple have compared to their competitors are the user-friendly interface, first mover advantages, attractive designs, innovative features, and a prestigious brand image. In addition, Apple also has full control over all aspects of their computers including both software and hardware. According to Ferguson (2010) the major competitive advantages of apple is their marketing techniques. Being the first mover in the industry, Apple is able to capture most of the market and build a strong brand image. With the high quality products that they deliver, they have successfully formed people’s perception that a good product should be fairly similar to an Apple product. When such perception has been formed, it will be harder for competitors to penetrate the market. These first mover advantages are the result of their continuous innovations. For instance, they are the first company who produce a computer with stylish design that has no visible bolts. Furthermore, the products that they deliver are always user-friendly and this enables them to capture a larger market that includes non-proficient computer users. As a result of their...
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...divisions of a company that constantly work together. Maybe some type of trade of supply or labor occurs between the departments. This is common in multi-entity firms that are treated and measured as separate run entities. I also think the answer to this question gets nailed on the head with Investopedia’s explanation below. Investopedia Explains: In managerial accounting, when different divisions of a multi-entity company are in charge of their own profits, they are also responsible for their own "Return on Invested Capital". Therefore, when divisions are required to transact with each other, a transfer price is used to determine costs. Transfer prices tend not to differ much from the price in the market because one of the entities in such a transaction will lose out: they will either be buying for more than the prevailing market price or selling below the market price, and this will affect their performance. Read more:...
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...Multiple-Choice & True/False 30 Multiple-Choice and True/False questions. Please highlight the correct answer. Once completed submit it as an attachment to the Assignment Link: 1. The insight that both parties must be benefiting if they freely agreed to make a trade is known as the fundamental theorem of exchange. True 2. In a two-party transaction, consumers make up the demand side, while sellers make up the supply side. True 3. A recent study showed that 86% of those who filed for bankruptcy had health insurance. False 4. Demand is a professional determination of the quantity that should be supplied. False 5. To determine how many times an individual will visit the doctor, we look only at that individual’s behavior. This is an example of derived demand. False 6. Cost–benefit analysis (CBA) is a set of techniques for assisting in the making of decisions that translates all relevant concerns into market (dollar) terms. True 7. The appropriate measure of economic cost is opportunity cost. True 8. How much has to be paid for treatment, and how much the treatment is worth, depends on whose perspective a cost–benefit analysis of health care is taking. True 9. The chance that you might become injured or sick is a cost, as is the chance that you might have significant expenses when you have no income. False 10. People’s degree of risk aversion depends to some extent on their income and savings. True 11. With insurance, patients gain by pooling risks...
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...Howie Lo Petrol price nears record highs January, 12 2012 Word count:536 Economics and Marketing What is the article about? The article is about the petrol prices are perilously close to the record high of $2.22 a liter in May 2011, although diesel prices at $1.57 a liter are still some way off the record $1.92 a liter in July 2008. It explains why the prices of petrol to be increased so high in recent years in terms of overusing the petrol to cause it to be less nowadays. Besides that, it leads to many environment issues from exploiting petrol-oil resources and US needs more oil from Iran, causing the economics unbalanced in the world and the purchasing of petrol-oil is increased, therefore, demands exceed the supplies. The cost of petrol-oil consumes a lot in US economy and makes a little change to the world economy as well. The US government has to take responsible for this case and they find many properly approach to cope with these difficulties by way of negotiations, exchanging energy products and analysis. A professor from University of Washington said that the prices of petrol-oil will be increased linear in recent years since it is lacking, and it shows up a graph of parabola dramatically increasing at the point where it demands is beyond supplies. For example, it only costs $1.57 dollars when it is abundance in oil resources; however, it costs $2.22 when the petrol-oil resources rarely exist even though the same volume of oil being utilized with running...
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...firms to record The par value method requires a company to record the cost of repurchased stock at the value that they assure to shareholders is backed. The cost method requires companies to record treasury stock at price it was purchased at. Recording the transaction of acquiring treasury stock below par value under the cost method would require a journal entry consisting of a debit to Treasury Stock and a Credit to cash, which ignores the loss or gain contributed. Using the par value method for the same situation requires a debit to Treasury Stock and Additional Paid in Capital –Treasury Stock and a credit to cash. The Additional Paid in capital account is used to account for the difference in the par values. If the stock is repurchased at price above par value the entry under cost method would remain the same. While the entry under the par value method would be a debit to treasury stock and a credit to Additional paid in capital-Treasury Stock and cash. Whether the stock was purchased under or above par value affects the recording of the resale of the treasury stock. If the stock is sold at a price below the purchase price but above par value it would be recorded as a credit to treasury stock for the purchase price and the excess above the purchase price is first debited to additional paid in capital and any remainder is then debited to retained...
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...the manufacturer, both at home and in developed markets. The threat served as a wake-up call: establishing a stronger platform for growth, the executives realized, would require the company to step up its product-development capabilities while maintaining—or even improving upon—its low-cost edge. Case 2: Medical-capital-equipment maker The challenge A large manufacturer of medical devices and capital equipment was losing market share to an Asian-based entrant offering lower prices for a key product. The manufacturer’s R&D team was perplexed. By its estimates, the competitor’s costs to make the product should be about 20 to 25 percent higher than the company’s costs for its own product. A head-to-head comparison of product characteristics clearly indicated that the attacker’s was inferior on many dimensions, including quality. The consensus of the R&D group was to stay the course—the competitor, they grumbled, was selling below cost to grab market share and would eventually have to raise its prices. Skeptical company leaders decided to investigate further. Many of the R&D team’s key personnel were longtime company veterans who had been instrumental...
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...HAL’S WOODWORKING SWOT ANALYSIS CSIS 405 Table of Contents SWOT Diagram…...………………………………………………….......3 Introduction…………….………………………………………………. ..4 Weaknesses……………………………………………………………….5 Opportunities……………………………………………………………..5 Threats….………………………………………………………………...5 Conclusions and Recommendation………………………………………6 References…..……………………………………………………………7 | | Strengths | | | | | Weaknesses | | | | | | | | | | | | | • | Family owned business | | | • | Local presence | | | • | Local community presence | | | • | Limited Internet website | | • | Service oriented tradition. | | | • | Small online selection | | • | Established tradition | | | • | No internet business knowledge | • | Has established customer base. | | • | Limited staff | | | • | Management is committed to company. | | • | Limited budget | | | • | Qualified and knowledgeable staff | | • | Don't have a detailed plan yet. | | | | | | | • | We would be a small player. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SWOT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Opportunities | | | | | Threats | | | | | | | ...
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...objectives. Hint you are advised to use direct quotes, to substantiate your findings, both in support of the strategic objective and those that failed to support it. The specific task of this study is to setting up mobile restaurant in Edinburgh. The two teams have to achieve this goal. This will get it from a number of goals that must be done to ensure the high quality food restaurant been serf on mobile unite. To perform these procedures will be based on performance objectives. First, choosing to sell food will be based on the cost and quality of the food. Adam's team decided to make pasta with meatballs that are quick to make, however, the team Jenna, opts for "Scot pop", which is a traditional Scottish dish, that although the price of meat is expensive, will high quality and closer to the city tourists. Second, both teams must assign that role to each group member. Next, do a search to see how is done. Then the team of Adam will speak with an Italian Chef were just saying that the dough is easy to make and cheap, therefore not going to be expensive. Meanwhile, Jenna's team goes to a Scottish restaurant and explains that the key to this dish is the meat, and therefore must spend more money to get the quality of food. Thus we see that for a team is more important than the cost is low and the other prefers otherwise high cost to have...
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...HRT. 221- CATERING MANAGEMENT INSTRUCTOR – DAN REEVES COMPILED BY- NICK NARDELLA (802-970-723) & JASMEET KANDOLA (821-173-838) CAFP Retirement Dinner Senior rep’s of CAFP that are retiring will be honoured. Special guest speaker and Chairman of CAFP Mr. Dan Reeves will be saying a heartwarming speech, noting the works and accomplishments of the retiree’s in front of their family and friends who will also be in attendance. Service style will be American, the room will be setup with seven u-shaped tables that seat 10 people, placed in a chevron style facing the podium for the guest speaker. The room capacity is 80 seated people, which is why we are setting up for only 70 people, because we have to factor in our staff and that the registration tables along with the bar and the pick-up station will take up space. There will be two registration tables positioned next to each entrance/exit, one bar at the south left side of the room and one pick-up station at the south right side of the room, as well as the podium and stage at the front center of the room. The theme for the night will be Tuxedo Royale “James Bond.” Schedule/Itinerary 5pm – 2 servers come in to set up the room. 6pm – 3 more servers come in to help finish setting up side station (coffee, tea, pick up area) and prepare to serve h’ordeurves , along with one bartender setting up the bar station. 6:30pm – Guests begin to arrive. Drinks served at the bar, servers begin to serve h’ordeurves , one server...
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...strapping machines. Signode sells its strapping products through its geographic ally organized sales force that traditionally had developed markets by specializing, by industry, some of its sales representatives. Signode’s sales force is the largest, most powerful and respected in the steel strapping industry. Signode's competitors can not provide the level of service that Signode provides. There are presently six major competitors in the steel strapping industry that account for 92% of steel strapping shipments. In 1983 Signode had a 40% market share in the steel strapping industry, however that share dropped from 50% in 1973. The biggest reason for the loss of market share is price discounting by the competition. Problem: In November of 1983 the major U.S. steel companies announced that they would increase the price of cold rolled steel by 6.8%. Cold rolled steel is the raw material used in the manufacture of steel strapping, Signode’s primary product. Traditionally, such an increase would be passed on to the consumer directly. However, the traditional approach has met opposition from Signode’s sales force, who feel that the sales force is already at a disadvantage in the market due to pricecutting by...
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