...Scotts Miracle Gro The Spreader Sourcing Decision 1.What are the strategic risks and benefits of outsourcing production of the Temecula plant to a contract manufacturer(s) in China? RISKS • Perceived decrease in quality from abandoning in-mold labeling • Additional costs and problems in implementing in-mold labeling in China • Up-front investment in specialized equipment and training for the partner • Inflexibility of sourcing suppliers would result • Labor and electricity costs guaranteed to increase at uncertain rates • Undervalued Yuan; drastic shift in exchange rates would reduce outsourcing cost advantages • Net increase in transportation costs of $7 M per year • Finished goods pipeline time would force increase of safety stock by $460K BENEFITS Immediate savings in • Labor Costs • Electricity costs • Plant and Property costs 2.Financially compare two of the options (stay in Temecula, outsource to China). Include all possible relevant financial measures and explicitly state important factors not included in the financial analysis. Provide a brief assessment of the offshoring option. Temecula Costs Lease Electricity Annual Usage Hourly raye rate+surcharge Electricity Costs Labor Costs Hourly Wage Hours Days Hourly Labor Salaried Workers Average Salary Salary Expense Total Current Labor Direct Manufacturing Costs Overhead Direct Investment Discount Total Cost 2008 $3,000,000 2009 $3,000,000 2010 $3,000,000 2011 $3,000,000 2012 $3,000,000 2013 $3,000,000 2014 $3,000...
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...Scotts Miracle-Gro : The Spreader Sourcing Decision John Gray Michael Leiblein 1 As Bob Bawcombe drove to work on a warm California morning in June 2007, his mind was occupied with an upcoming meeting with the folks from the corporate office in Marysville, Ohio. Bawcombe was the director of operations of Scotts’ Temecula plant. For over five years, he had been in charge of the Temecula manufacturing plant, which produced all of Scotts Miracle-Gro’s domestic lawn seed and fertilizer spreaders (see Exhibit 1). As a result of the plant’s location in Southern California, Bawcombe was under constant pressure to justify why Scotts should not offshore/outsource production of its spreaders to a low-wage manufacturing site, such as China. COMPANY HISTORY 2 The Scotts Miracle-Gro Company (Scotts), based in Marysville, Ohio, was formed by a 1995 merger of Miracle-Gro and The Scotts Company. The merger made Scotts the largest company in the North American lawn and garden industry. It was the world’s leading supplier and marketer of consumer products for do-it-yourself lawn and garden care, with products for professional horticulture as well. 1 In the 2007 fiscal year, Scotts had net sales of $2.7 billion (see Exhibits 2 and 3). 3 The Scotts Company was founded in 1868 by Orlando McLean Scott as a purveyor of weed-free seeds. By 1879, Scotts had diversified into distribution of horse-drawn farm equipment and also started a mail-order farm seed distribution channel. Scotts...
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...purpose of this article is to determine whether staying at the Temecula plant or outsourcing to China is the best option for Scotts Miracle-Gro. A cost analysis will be used to determine which option will give Scotts Miracle-Gro the best opportunity for long-term growth and profit. Recommendations It has been determined that staying in the United States at the Temecula plant in California will be the best decision for Scotts Miracle-Gro financially and with regards to their image and product quality. However, in order to remain competitive, costs must be lowered to keep profits up to par with where they would be had the company decided to outsource. To do this, it has been recommended that Scotts Miracle-Gro cut production costs by reducing: 1. Energy Costs, 2. Raw Materials Costs, and 3. Labor Costs. By reducing costs, Scott’s Miracle-Gro can remain competitive while in the United States and avoid outsourcing the production line to China. Analysis Risk and Benefits Upon reviewing the information regarding the production line of The Spreader, it has been concluded that there are many risks with outsourcing the production line overseas to China which include but are not limited to: 1. Loss of quality 2. Loss of production innovation 3. Forgoing in-mold label capabilities or paying to provide such technology to a contract manufacturer 4. Lead time; Defective batches will not be detected until they arrive from China 5. Slight risk...
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...purpose of this article is to determine whether staying at the Temecula plant or outsourcing to China is the best option for Scotts Miracle-Gro. A cost analysis will be used to determine which option will give Scotts Miracle-Gro the best opportunity for long-term growth and profit. Recommendations It has been determined that staying in the United States at the Temecula plant in California will be the best decision for Scotts Miracle-Gro financially and with regards to their image and product quality. However, in order to remain competitive, costs must be lowered to keep profits up to par with where they would be had the company decided to outsource. To do this, it has been recommended that Scotts Miracle-Gro cut production costs by reducing: 1. Energy Costs, 2. Raw Materials Costs, and 3. Labor Costs. By reducing costs, Scott’s Miracle-Gro can remain competitive while in the United States and avoid outsourcing the production line to China. Analysis Risk and Benefits Upon reviewing the information regarding the production line of The Spreader, it has been concluded that there are many risks with outsourcing the production line overseas to China which include but are not limited to: 1. Loss of quality 2. Loss of production innovation 3. Forgoing in-mold label capabilities or paying to provide such technology to a contract manufacturer 4. Lead time; Defective batches will not be detected until they arrive from China 5. Slight risk...
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...TABLE OF CONTENTS Page INTRODUCTION …..…………………………………….……………………… 1 PART 1 PORTER’S NATIONAL DIAMOND ANALYSIS ……………… 1.1 Factor Conditions 2 1.2 Demand Conditions 3 1.3 Related and Supporting Industries 4 1.4 Firm Strategy, Structure and Rivalry 5-6 1.5 Government 7 1.6 Chance 8 CONCLUSION ……………………………………………………………………. 9 PART 2 MARKET ENTRY STRATEGIES ……………………………..… 2.1 Joint Venture 10-11 2.2 Acquisition 12-13 RECOMMENDATIONS …………………………………………………………... 14 REFERENCES …………………………………………………………..……….. 15-17 WORD COUNT Part 1: 2310 Part 2: 939 Total: 3249 WORD COUNT Part 1: 2310 Part 2: 939 Total: 3249 INTRODUCTION Peru is a dynamic, fast-growing South American economy poised for success in international markets. Some of Peru’s flagship export products are coffee and asparagus, but in recent years, it is an emerging producer of New World wines. Peru’s wine market supply is around 45 million litres, an increase of almost 10 million litres from five years ago (USDA, 2014). Peruvian climate is ideal for cultivation of grapes with strong character, where majority of its vineyards are concentrated on the Central coast. The wine industry is Peru has promising prospects for a foreign business investment, due to growing domestic consumption and global demand for high-quality and affordable wines. ………... PORTER’S NATIONAL DIAMOND ANALYSIS ……….....
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...An Overview on Multinational Corporations INTRODUCTION Multinational corporations (MNCs) are firms that engage in some form of international business. Their managers conduct international financial management which involves international investing and financing decisions that are intended to maximize the value of the MNC. Management is motivated to achieve a number of goals and objectives, some of which conflict with each other. However, the commonly accepted objective of an MNC is to maximize stockholder wealth on a global basis, as reflected by stock price. Managers of an MNC may make decisions that conflict with the firm’s goal to maximize shareholder wealth. This conflict of goals between firm’s managers and shareholders’ is often referred to as the agency problem. For the firm to achieve its goals, it needs to put in place mechanism for control of agency problem. MNCs are recognized as the main actors of e international business, international business financing and global economies. According to Goshen and Bartlett, MNC is a firm that has substantial direct investment in foreign countries that it actively manages.2 the value of their sales in host countries overpasses the value of trade (imports and exports) in today’s World economy. Multinational companies attracted scientific and public attention from the moment of their appearance, and especially from the beginning of their intensive growth (during the 1960s). There are many interesting and important issues...
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...A PROJECT REPORT ON PROJECT FINANCIANG OF THE PROPOSED 1 x 10 MW CAPTIVE POWER PLANT OF J U D CEMENTS LIMITED AT Vill. Wahiajer, Near Lumshnong Dist. Jaintia Hills, Meghalaya PREPARED BY xxxxxxxxxxxx MBA – xx SEMESTER REGD NO. xxxxxxx Note: This Report is submitted for the partial fulfillment of the requirement for the Degree of Master of Business Administration of xxxxxxxx University. I, hereby declare that the project entitled as Project Report on Project Financing of the proposed 1 x 10 MW Captive Power Plant of J U D Cements Ltd at Vill. Wahiajer, Near Lumshnong, Dist. Jaintia Hills, Meghalaya, submitted in partial fulfillment of the requirement for the degree of Master of Business Administration to the xxxxxxxxxx University, India, is my original work and the same is not submitted for the award of any other degree, diploma or any other prizes. xxxxxxxxxxxxxxxxxxx Reg No. xxxxxxxxxx Place: Guwahati Dated: Dear Sir / Madam This is to certify that Mr. xxxxxxxxxxx has worked under our supervision and guidance for the project report termed as the project report for project financing of our 1X10 MW Captive Power Plant and that this Report has been allowed to be prepared for his partial fulfillment of the requirement for obtaining the Degree of MBA (Finance) from xxxxxxxxxx University and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the...
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...TO STUDY????? Companies use marketing to promote and sell their products or services, and consumer behavior is how consumers act and respond in the retail environment. In order for a company to create a strong marketing campaign, it is important to understand how and to what the consumer will respond. This relationship between marketing and consumer behavior involves studies, focus groups, psychological analyses and other methods of studying the market for a particular product or service. Understanding consumer behavior is critical for marketing any product or service successfully. When a company can understand why people buy what they buy and the reasons behind their decisions as consumers, the company can create a marketing campaign that specifically addresses those elements of the purchasing decision. Not all products appeal to all people; the key for...
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...http://www.nckvietnam.com Understanding the Global Spa Industry http://www.nckvietnam.com This page intentionally left blank http://www.nckvietnam.com Understanding the Global Spa Industry: Spa Management Marc Cohen and Gerard Bodeker AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEWYORK • OXFORD • PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier http://www.nckvietnam.com Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA01803, USA First edition 2008 Copyright © 2008 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone ( 44) (0) 1865 843830; fax ( 44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively you can submit your request online by visiting the Elsevier web site at http:/ /elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any...
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