...This case is about the dilemma facing by John Martin, the CEO of Martin Textiles, a New York based textiles company. On August 2, 1992, which the day that the U.S., Canada, and Mexico agreed in principle to the North American Free Trade Agreement (NAFTA). Martin Textiles is a family business over four generation, which was started by John's great-grandfather in 1910. Today, the company employs 1,500 people in three New York facilities. John's dilemma, which is particularly troublesome to him because he feels a sense of loyalty to his company's longtime employees, is this. NAFTA will remove all tariffs on the trade of textiles between the U.S., Canada, and Mexico within 10 years. Textiles manufacturing is a low-skilled, labor-intensive business. As a result, the simple economics of the industry suggests that the under the auspices of NAFTA, the majority of textile manufacturing in the U.S. will move to Mexico, where wage rates are considerably lower than in the U.S. When he first realized the full implications of the NAFTA agreement, John thought to himself, "My God! Now I'm going to have to decide about moving my plants to Mexico." John dilemma is how to cope with this realization. If he moves his plants to Mexico, he'll have to let go many of his loyal employees. If he doesn't move, he risks going out of business. 1. What are the economic costs and benefits to Martin’s Textiles of shifting production to Mexico? The definition of economic costs is the sacrifice involved in performing...
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...The LEGO Group Introduction Founded in 1932, the LEGO Group is a privately held company headquartered in Billund, Denmark. The vision of Lego Group is to “inspire children to explore and challenge their own creative potential”[1] Lego now ranks 4th in the world as a toy manufacturer. The Lego Group employs nearly 9,000 workers and its own product, Lego Brick can be found in over 130 countries. The financial performance of Lego declined drastically through the 1990’s and early 2000’s. In 2004, the company accumulated losses of DKK1.9 billion.[2] Therefore, Lego tried to implement some changes in order to cut the production cost and reverse the poor situation. In the last step of the process of restructuring Lego’s supply chain, the Group tried to close some of its’ own factories in Korea and Switzerland, upgrade the procurement process and outsource 80 percent of the production. Prior to outsourcing to Flextronics, production plants were located in high-cost countries including Denmark and Switzerland. Apart from the famous Brick, the company entered into other industries including computer games, clothing, licensed products and television. The product diversification was very large since they lost confidence in their core product. This catalyzed inefficiencies and confusion for customers. The result was a disastrous net loss and forced the company to find solutions to cut the cost and recapture the market share. In 2009, the Lego Group ended the outsourcing contract with Flextronics...
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...must identify the significance, scope, magnitude, or feasibility of the situation, as well as the dilemma facing management. The research purpose must also be identified. Next management, investigative questions and measurement questions must be formed. Last one must formulate a hypothesis. The dilemma facing management, significance, scope, and research purpose Tyco Health Care is a private label diaper manufacture. Tyco has five different plants but the numbers provided here are for one plant, the plant in which a friend used to work. Tyco changed a fabric used to make diapers from a hydrophilic non-woven to a thinner non-woven to cut the cost of making the material. The product went from 21gsm non-woven to a 17gsm non-woven fabric. The price difference was dramatic and the company saved a million of dollars in cost. Once the company put the material into production workers began to run into problems. When the material is coated with glue in the production process workers began to notice that the glue was bleeding through the material because of the thinner fabric. This glue was getting stuck on the conveyers causing glue build up on the machine and problems with production. This caused downtime for the machine because the machine had to be cleaned. Workers moral began be compromised as they were frustrated with the increased waste and lack of production because of downtime. Managers began to come down hard on the employees because they were not meeting their...
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...month. 2. Workers need to be multitasking as they need to focus on one or more task in a short period of time. 3. The assembly process which solely depends on the handwork of workers may cause human errors. 4. The assemble process for an iPhone is complicated. 5. Demand of iPhone 4 is higher than the supply in the market. 6. Revenue for August was below budget while labor cost was above budget. 7. Instead of having $100,000 profit, company had a loss of $672,000 due to unable to produce 200,000 units of iPhone 4 on time. 8. The plant face difficulty in finding enough people to match their production despite raising wages over 30% 9. Samsung flash memory was too fragile causes it can be damaged easily during installation process. 10. Current method of preparing budget may cause misinterpretation of the performance therefore flexible budget should be used to compare the actual performance. SOLUTIONS A. Wages for workers should increase more than 30% to attract workers. Others incentive should be include attracting skilled workers to work with the company in order to increase the productivity of iPhone 4. B. Danshui can build a new plant in somewhere where the unemployment rate is high so that...
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...deliver products that are essential to the population, which rapidly grows in the world, and the adaption methods to both social and demographic changes. It will also outstanding on the technological impact to the business operations and reliability in the ensuring that they meet people’s needs. The development in technology has led to increase in the number of people in the world, leading to faster depletion of resources. This, therefore, necessitates improvement in company production and improved services so that they can be able to meet the increased requirements of the population. These companies also need to adapt to both social and demographic changes to enable them work efficiently and effectively (Wothington & Britton, 2009, 12). Growing firms invest more in Information Communication Technologies (ICTs) and are more efficient in terms of the services and products that they offer. The change in technology has enabled people to get access to services quickly and is of satisfactory quality. Improving companies’ performance helps them relate well with their customers socially and assists them to deliver the products to customers on time. This makes the customers appreciate the fact that they can be able to meet their requirements at the right time despite having requested for them a bit late. Research shows that, in the ancient times, people were not in a...
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...Wilkerson Company Wilkerson company is operating the mature market with limited opportunities for innovation and facing declining from 10% to 3%. Wilkerson is producing 3 different kind of products; each has the same production process but not the same quantity of components. The valves and pumps production are high volume and standard, the flow controllers are low volume and highly customized. The overhead costs are 3 times of direct labor costs. The pump is facing the price pressure, but the company even increased price for the flow controllers without losing sales. The costing system that Wilkerson currently use is full costing system, which is not sufficient enough to support management decisions. ABC could reflect the realities of production more accurately, therefore the ABC costing system is suggested. 1. The differences between the full cost system and the ABC The major differences relate to the two-stage allocation process. * In the first stage, traditional systems allocate indirect costs to cost centers , ABC to activities. * In the second stage, full costing systems use a limited number of volume-based allocation on basis of direct labour, machine hours or materials, whereas activity-based systems use many different types of volume-based and non-volume-based cause-and-effect second stage drivers. 2. Full costing system The full costing system, which aims to allocate all costs to products through a sharing-out process based on volumes of inputs...
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...at Footlib This case of foot lib talks about a shoe manufacturing company. Footlib which came into existence nearly two decades ago and was started as a partnership between Mr. Waseem Zakaria and two of his fiends however with time this partnership dissolved and eventually the company became private limited company. Footlib initially started off by manufacturing rubber and related products but later expanded towards manufacturing boot shoes. They had only one retail outlet which was the factory outlet itself in the first years of business now they have a total of seven outlets. The company is fairly medium sized and follows a centralized approach, however the organizational culture is very informal. There is no formal dress code. Employees get twenty four leaves which have to inform in prior. The company follows an open door policy thus they have kind of nontraditional working environment. Communication barriers are less primarily due to the senior and the entire staff sitting in the same place so communication is convenient. Footlib specializes in four major brands. Orange skin; which are formal shoes. Free mood; which is a regular boot. Flex system; flexible shoes with a stretchable sole and Trentino; which is a fancy footwear for ladies. It targets upper middle class domestically however it earns major percentage of its revenues through exports. Only 3% consists of domestic sales. Therefore the company has emphasized a lot in exporting to European countries rather than...
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...Opportunities and Challenges Facing FIAT to Enter Ukraine Opportunities and Challenges Facing FIAT to Enter Ukraine Report Team: NO.10 Italy Class period: Tuesday 8, 9 Team Member Zhou Wen Duan Jiaqi Han qingxiu English Name Cookie Todd May Student Number 41006044 41032003 41029021 Contact Information 289192701@qq.com 917686559@qq.com 304593546@qq.com 1 Opportunities and Challenges Facing FIAT to Enter Ukraine Executive summary The report is going to analysis the opportunities and challenges facing FIAT to enter Ukraine automobile market. We first identify the strength and weakness of global strategy of Fiat with the SWOT analysis (Appendix 1) to find out entering Ukraine could contribute to Fiat’s global strategy, and then we evaluate the investment potential in Ukraine with PEST analysis (Appendix 2) to find out that Ukraine government is encouraging foreign investment by incentive policy and regulation, moreover, the automobile market in Ukraine is large. However, under the condition of financial crisis, the trade protectionism is on the rise in Ukraine, making the existing competition fiercer than before. To solve the problem, we suggest Fiat to export light vehicle and manufacture installation kit by joint venture to minimize risk and mitigate challenges. Besides, the board should pay attention to balancing the relationship among local government, local employees and management layer. 2 Opportunities and Challenges Facing FIAT to Enter Ukraine Content...
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...Global Issues of General Motors Company (GM) Full Name Institution Global Issues of General Motors Company (GM) Introduction General Motors is a multinational company holding various subsidiaries and interests in many countries across the world. Although this company has been holding a recommendable reputation in motor vehicle industry, there are numerous challenges and opportunities that this company has been facing in the global market. In the global market, there are many challenges and opportunities that are not available in the mother country hence subjecting general motors to a challenging business world (Sperling, 2010). Business environment changes with the change of location holding the fact that there are many factors that the company ought to streamline before making a relevant market entry in a given market segment. General motors has therefore many subjects to handle in a global market, some being of advantage to the company while others challenge company viability in the global platform. Some of these issues are globalization, finance, management, political business interference, competition and Social challenges. These subjects affect the company directly or indirectly hence being reflected in the company performance at the end of every financial year (Sperling, 2010). General Motors is a Multi national and is therefore subject to the influence of several global factors among...
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...Samsung Case After reviewing Samsung’s current position in the semiconductor and memory chip industry, Swift Consulting has come up with a full analysis on the threats and opportunities facing the company. The primary threat facing the firm is the entry and growth of Chinese semiconductor companies. To respond to this threat, it is our assessment that Samsung should allocate less production to capacity to Dynamic Random Access Memory, and increase production and research to the more rapidly growing higher end Dynamic Random Access Memory, Static Random Access Memory and Flash memory markets. When Samsung entered the memory chip market, they gained market share by initially taking a loss on DRAM, because the company believed they would see future profit. The Chinese companies are following the same strategy to gain ground in the industry by their ability to produce at a high level, and sustain a loss. Samsung’s biggest threat in the semiconductor industry is the Chinese company Semiconductor Manufacturing International Corporation. By licensing agreements with German based Infineon, Japan based Eplida, subsidies from the Chinese government and private investment; SMIC has had profit increase of over $300 Million from 2002 to 2003. The secondary threat in facing Samsung is that China is expected to become the world’s second largest purchaser of semiconductors, after the United States. SMIC and the Chinese markets are deeply invested in lower end DRAM. By extensive research...
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...Letsgo competitor has reduced its material cost by more than 60% and labor cost by 78% by using creative engineering and high accuracy analysis. On the other hand, the Letsgo Travel Trailer Company is experiencing challenges with quality, cash flow and a performance review and reward system. This is happening due to lack of integrative planning across different functions. Each functional unit is trying to maximize their own performance, which in turn is hampering the overall performance. The current appraisal and reward system is increasing this isolated and non-cooperative working of the different functional units. ▪ The sales department to improve their sales want to have high finished goods inventory ▪ The production department wants to have high inventory of raw material to have uninterrupted production schedule. They are not interested in implementation of Just-in-time inventory methods to reduce the overall cost. ▪ The current control and reporting system does not provide enough good quality data to guide management decision process. For example, no record for work in process is kept in the company. ▪ The accounts department is making the budget without getting any information from functional units. This way the budgets are not realistic and reflect only an accounting necessity rather than a decision making and control tool. ▪ The cash management system of the company is not good and company is facing the cash management problems. Validity...
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...Guillermo can determine the best course of action through capital budgeting techniques. Through calculating the net present value (NPV), the internal rate of return (IRR), and the weighted average cost of capital (WACC) Guillermo can determine the best course of action that will have the best profitability outcomes. Guillermo could decide to maintain doing business without making any changes to the structure of the company. If he chose to stay on his current path, furniture sales could decrease because of the competitions ability to sell quality furniture at discounted prices. Continuing with business as usual, Guillermo will miss opportunities for growth. Currently Guillermo has a net income before taxes of forty-four thousand dollars. If Guillermo continues to operate the same way he will be facing many challenges going forward. Some challenges he will be facing consists of; increased competition, residents of Sonora have better job opportunities with increased wages (University of Phoenix, n.d.). Guillermo’s profit margins have begun to decrease from the increased cost of labor. The competition offering quality product at a lesser price will force Guillermo decrease price which will also result in decreased profit margins. A new high-tech company has entered the marketplace with cost saving technology to create furniture on the same quality scale as Guillermo....
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...of Contents INTRODUCTION AND MAIN ISSUES 3 ANALYSIS 4 Qualitative 4 Quanitative 5 Breakeven Point (BEP) 5 Flexible Budget 6 Variances 7 RECOMMENDATION 8 Encourage, motivate, reward and recognize 8 Cellular Manufacturing System 8 Implement new accounting method 9 Extend the contract 9 ACTION PLAN 10 REFERENCES 12 INTRODUCTION AND MAIN ISSUES Danshui was a contract manufacturer that assembled electronic products for companies wishing to save labour costs by locating in southern China. Because of high demand for iPhone 4, Apple had contracted with Danshui to assemble iPhone in Plant No. 2. The contract need Danshui to assemble 2.4 million iPhone in the period between June 1, 2010 and May 31, 2011. Wentao Chen, manager of Danshui Plant No. 2 was worried because in the third month of the contract production was only 180,000 units per month. Suppose to produce 2.4 million iPhone its need 200,000 units per month. After preliminary budget has come out, the company loss of $672,000. The main issue of this case is the break contract between Danshui and Apple. The contract called Danshui to assemble 2.4 million in the period of one year, but Danshui only can produce 180,000 units per months. If Danshui still can produce that amount, it can’t reach 2.4 million in one year. This might happen because Danshui cannot find people to hire, even though they have raised wages by almost 30%. Another reason is they have problem with the Samsung...
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...multipurpose and multinational company based in America. The corporation is headquartered in the Redmond, Washington. It mainly focuses on the development, licensing, supporting and selling of the computer electronics, computer software, personal computers and the affiliate services. The corporation is mainly recognized for its software products including the operating systems, the Microsoft office suite among others. It has a high profile reputation of quality services and products that are consumed by both large-scale and small-scale consumers. The paper intends to analyze and deduce the factors of operation of the corporation. That includes the mission statement, the vision statement, culture, SWOT analysis amongst other attributes that determine the extent in which the corporation is an outstanding performer. Mission, Vision, Goals, and culture Mission At Microsoft, the central mission is to enable the people, as well as, the businesses across the international borders to realize their absolute potential. Particularly, the corporation considers it a mission to focus on the commitment to the customers. As such, the corporate attempts to articulate the full measure of the mission by striving to ensure that it creates outstanding technology. The technology is also developed in such a manner that everyone can access it regardless of the demographic characteristic such as ages and abilities. According to the contemporary company ratings, Microsoft is considered...
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...Honda pestel analysis Political We facing difficulty with the actual production of ours cars e.g. a lot of countries and governments are cutting down the amount to cars on the road that release toxic gasses in the atmosphere. Which means we are affected politically by government legislation as a cut on amount of cars on the road would decrease the amount of demand for ours cars which will affect sales of the company. 1. Economical 2. Downturn in economy would lead to less demand for luxury vehicles. 3. Damage to major markets such as U.S and Britain could lead to decreasing in our annual profit on a yearly basis. 4. Social 5. Trends and fashions and methods of transport may change leading to a diversion from vehicle purchases. 6. Fashions and trends may also bringing change to Honda having to possibly alter things in their production e.g. size and price for theirs cars People may change their minds from wanting a speedy car to a small and economic one; speed limits may be abolished leading to Honda having to alter their production line again to suit the needs of the social. 7. Technological 8. Technologies are improving and competitors are reacting to it would mean Honda too would need an upgrade in theirs production of this would be production the environmental friendly cars in order to stay in the market Legal – (How the Trend Helps or Hinders the...
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