Graduate School of

Management

International
Operations
Management [MIO]:

SWEET CASE, or
CANDY STORY
Vitally I. Cherenkov
 Monopoly

USSR

Vitally I. Cherenkov
 Free Market

Vitally I. Cherenkov
 Once upon a time – it seems to me it was
in the time when Me as all other Russian
people were inflated millionaires, or in the
time of that galloping inflation, in Russia - a
Wise Not-Too-Old-But-Very-Business
Woman, the President of Candy Ooops, Ltd.
was seating and thinking…

 WHAT ABOUT?

Vitally I. Cherenkov
 Business Situation

 Product view – nature, demand versus

supply market analysis
 Finance view – account, earnings,
purchasing power, inflation, currency
access
 Equipment view – age, TQM, main
suppliers and possible substitution

Vitally I. Cherenkov
 Candy Ooops, Ltd. –
Process & Sell Map

DISTRIBUTORS

KITCHEN FORMATTING PACKAGING

OLD NEW
INCREDIBLY OLD
(not used)

Vitally I. Cherenkov
 EQUIPMENT
SUPPLIERS

 KITCHEN
– Nederland
 FORMATTING

- Germany (2) ► TEUTON CONTRACTOR

- United Kingdom
 PACKAGING

- Germany
Vitally I. Cherenkov
 Contract #1
Structure and Time-Table

time Work to be done Notes

1 Signing the Contract
Payment in advance = T/T = €750,000
25%TVC by Contractor
Mission of Contractee to study
production facilities of
Contractor
2 Technical documentation
adjusted to the project
Payment = 10%TVC by T/T = €300,000
Contractor
Vitally I. Cherenkov
time Work to be done Notes
3 Final Payment = 65% TVC L/C =
by Contractor €1,950,000

4 Work with subcontractors Inspections are

5 Work with subcontractors permitted
6 Work with subcontractors Inspections are
7 Work with subcontractors permitted
8 Work with subcontractors Inspections are
9 Work with subcontractors permitted
Vitally I. Cherenkov
time Work to be done Notes
10 Notification by Contractee Before Last week
“Work is done” and Invitation
for Contractor for Stand
Testing
Acceptance of Equipment by
Contractor in Germany F.O.B. (F.O.T.)

Vitally I. Cherenkov
 Contract #2
Structure and Time-Table
time Work to be done Notes
1 Contractor issues Invitation TOB for C#2
for Contractee’s Installation
Team &
Payment in advance = T/T = €150,000
50%TVC by Contractor
Work of Installation Team
2 Work of Installation Team
Acceptance of Production Line
Final Payment = 50%TVC by T/T = €150,000
Contractor
Vitally I. Cherenkov
 Time-Table 50%
- L/C
Contracts are Production Line is
Signed Tested 50%
- L/C

25% 10% 65%

- T/T - T/T - L/C

Production Line is
Installed and Tested

Production Line is
Ready to Be Tested

Technical
Documentation
Vitally I. Cherenkov
 WHAT ABOUT RISKS
of
SUCH ARRANGEMENTS
for
CONTRACTOR
???????????????????

Vitally I. Cherenkov
 YOUR PROPOSALS,
AMENDMENTS, AND OTHER
BUSINESS IDEAS ARE
WELCOME AND HAVE A
CHANCE TO RECEIVE YOUR
FIRST BONUS

Vitally I. Cherenkov
QUESTIONS?

Vitally I. Cherenkov
THANKS FOR YOUR
ATTENTION!

Vitally I. Cherenkov