Global Challenge

Introduction to the case

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Case Introduction
• What is manufactured & marketed:
Mobile Handsets

• Who do you represent:

Top Management

• How many production areas do you have:

Two production areas
The Market
• In how many markets do we sell:
Three Markets
The Market
More Features in a mobile are popular in:
EUROPE > USA > ASIA

Technology is appreciated in:

EUROPE > ASIA > USA

Growth Prospects are strong in:

ASIA >> EUROPE > USA

The “Impact of Promotions” shows greater effect in:

USA=Europe > ASIA
Operations - Manufacturing
Manufacturing can happen in
USA & Asia

At the start
No of plants in USA: 12 plants
Capacity per plant: 550 K unit handsets/year/plant
The current technology: Tech 1
Time taken to commission a new plant: 2 years from year of
investment
Operations - Manufacturing
• Time taken to commission a new plant
2 years from year of investment

Contract Manufacturing : Please remember that there is a

limit
• Cannot contract manufacture at a higher level of
technology.
R&D
• Technology up gradation & Increase in Features

• Two ways
• Own Development: One level at a time
• Buying out License: Any number of levels at a time

• Time Taken
• Own Development: One year delay
• Buying Out License: In the same year

Important: Buying out Licensing is expensive than

in-house development
Technology
The Technology infrastructure
Network coverage – % coverage of the total region data
provided Y-0-Y.
Logistics & Planning
• Total Logistics Cost : Transportation + Tariff

• Delivery priorities

• Internal transfer pricing

• Stock out
– Loss in equivalent Sales Revenue

• Over production
– Cost of carrying Inventory
Finance
• You run a Listed company
• Loans
– Long term
– Internal loans
– Interest rate – Companies financial strength
• Shares
– Issue
– Buy back
– Dividends

• Minimum Cash requirement end of year

– 2 million USD
– Less than 2 million USD, short term loan
– Higher premium
– Paid immediately
Promotions
• Impact of Promotional Activities
Learning Curve
Learning curve effect
• Unit cost
• Cumulative production
Demo
• Lets get started!!

• Objective
– Understand the interface
– Check all the features and try them in this round