Ethics and compliance program: Case Study

For the most part, the ethics and compliance program is meant to provide general guidance on behavior, ethical standing, and following the prevailing rules.
Ethics and compliance program

Ethics and compliance program

Case Study 1

The first case presents a scenario where the company is in talks with the government of Vindalubia regarding the contract to construct a number of solar panels. In the course of the discussions, the Minister in the Ministry of Energy requests for payment of a “motivation fee” in order to facilitate the signature that will allow for awarding of the contract with the government in Vindalubia.

The discussion below is presented to the company’s CEO as an explanation of whether or not the firm should pay the “motivation fee” requested by the minister, implications of actions, a legal view of the scenario, as well as a recommendation of the decision the firm should make.

The meaning of a “motivation fee”

The Minister, by asking for a “motivation fee”, is asking for something of value to them in exchange for the signature. In this case, the term fee implies something of monetary value i.e. legal tender, is expected to change hands. The sole purpose of the exchange being as a means to influence the Minister of Energy to carry out a given action, whether legal or otherwise.

In this regard, therefore, the “motivation fee” is understood to be a bribe to influence the Minister to act in favor of the company by rewarding the tender to construct the solar panels in Vindalubia in exchange for a given amount of money.

Possible decisions and implications

Given the prevailing scenario, as well as the firm being in need of the contract, it is evident a decision is needed. The decision involves a choice of whether or not to present the Minister with the required “motivation fee”. Both choices have implications, and they ought to be addressed prior to making the decision.

If the firm chooses to offer the Minister of Energy the requested “motivation fee”, they will outrightly have secured the contract. This, however, at the cost of breaking the law, and, therefore, exposing the firm to possible litigation arising from the illegitimate transaction.

On the other hand, the firm may choose to ignore the minister’s request to pay the “motivation fee”. This decision drastically reduces the chances of the firm being awarded the contract to almost nil. This decision, however, maintains the ethical standing of the firm, and it may also choose to file a lawsuit against the minister for illegal activities of a public official in a public office. The prevailing recommendation is not to pay the Minister of Energy the prescribed “motivation fee” since it is not only unethical but also illegal.

Legal perspective and justification for the decision

As per Section 18 code 201 of the US code, ‘Bribery of public officials and witnesses’, bribery is understood to be the act of offering, promising, or giving, directly or indirectly, anything of value to a public official. In the context of the Minister of Energy as a public official, the above described act of bribery is committed in a bid to either influence the performance of an official act or to influence the official in an act of collusion or knowingly allow the committing of fraud.

In addition, the act of bribery may be committed when the exchange is done to influence the official to knowingly act in omission or commission of an action that is in violation of the law (Legal Information Institute, n.d.).

Case Study 2

The second case represents a scenario where the Government of Vindalubia has awarded the company a contract to construct solar panels. The firm has gone through the required process and signed the contract. However, in a bid to secure the contract, the company paid a “motivation fee” to facilitate the signature to award the contract as requested by the Minister of Energy in Vindalubia.

In spite of the payment of the “motivation fee” as agreed, the Government of Vindalubia terminated the contract a few months later. Below is a discussion that expounds on the scenario, shows a number of methods of solving the arising dispute, provides a legal perspective of the issues in the scenario, and provides recommendations on the choices and implications of the same.

The arising dispute and possible methods of resolving

The prevailing dispute regarding the given scenario between the company and the Minister of Energy in Vindalubia stems from the premature termination of the awarded contract to construct solar panels by the government. The firm may decide to address this dispute in a number of ways. Key among these is the use of contract law. This is the preferred approach proposed to the Chief Executive.

Possible decisions and implications

The use of contract law as proposed to the CEO of the company would suffice as an effective method of addressing the dispute between the company and the government. If the Chief Executive upholds this decision, the firm may choose either to handle the matter amicably between the parties involved out of court or to file a lawsuit.

The lawsuit may serve to expose the illegitimate and unethical transaction between both parties involving the payment of a “motivation fee”. On the other hand, the amicable settlement may result in a much better result that favors both parties.

Legal perspective and justification for the decision

The use of an amicable settlement, which is the decision of choice among both, should start with a review of the contract. This step allows both parties to review the terms of the signed contract that proves the existence of an agreement between the parties. For the company, an area of focus during this face should be the determination of contractual clauses within the agreement that stipulate the terms of termination of the contract.

Owing to the value of the contract, it should contain a clause or clauses describing the suitable provisions of the process of the termination of a contract (Legal Information Institute, n.d.). Any disputes should be handled, therefore, as per the clauses of contract termination.

Failure of the clauses within the contract to provide an amicable settlement of the matter, prevailing codes of contract law governing the US are useable. This step may invoke the need for an external expert regarding contract law. The law of contracts should provide sufficient guidance on the various violations committed in terminating the contract without communication between both parties (Legal Information Institute, n.d.).

In addition, the notice of termination section of the US code should provide guidance on the requirements and process needed to terminate the contract (Legal Information Institute, n.d.). If these terms are not sufficient to warrant an agreement between both parties, the company may choose to file a lawsuit against the government in spite of the prevailing choices discussed earlier.

Case Study 3

The third case presents a scenario where the Chief Executive Officer has concerns over the lack of a Ethics and compliance Program at the firm. The CEO tasks me, as the new Chief Compliance Officer at the company, to propose and develop a new ethics and compliance program for the firm.

Proposal for a new ethics and compliance program

For the most part, the ethics and compliance program is meant to provide general guidance on behavior, ethical standing, and following the prevailing rules. The introductory segment of the ethics and compliance program for the firm stipulates the need and importance of following all rules and regulations outlined in the various company statutes. In addition, the introduction section also outlines the individuals and stakeholders covered by the various codes of ethics and rules of conduct of the firm.

The ethics and compliance program outlines the offices where an aggrieved employee, distributor, supplier, or other stakeholder covered by the relevant rules is supposed to access help and have their concerns addressed. The ethics and compliance program outlines all the necessary laws that are to be adhered to strictly by all. In addition, the ethics and compliance program identifies and classifies all areas covered by the various policies. This allows for easier navigation and access to specific rules as needed.

Some areas of importance in the ethics and compliance program include the outlining of laws and regulations covering intellectual property, privacy, conflicts at the workplace, integrity and dealing fair, provision of equal opportunities, and laws that relate to safety, health, and the environment. These laws will relate to not only the firm, but must also fall within the legal framework established in Riyadh, and other laws that govern the operation of the construction industry in the country.

Proposal for corporate governance

The corporate governance section is meant to provide an overview of the managerial and staff structure of the firm and the roles of each level of authority. In addition, the corporate governance model delimits the communication structure regarding the information flow within the firm.

This corporate governance structure ties in to the proposed ethics and compliance program by availing information about the flow of communication from the various managers. In addition, the corporate governance helps by providing a representation of the various officials where a member of staff in the firm can access help about the various rules and regulations outlined in the ethics and compliance program.

Objectives of the ethics and compliance program

The ethics and compliance program serves to provide guidance to the employees of the firm concerning the various applicable laws at the workplace. The program creates a framework where the members of staff in the organization can understand the various applicable laws in a simple manner that is usually categorized and focused for their specific industry and region. In this case, for example, the US law would not suffice in the creation of the ethics and compliance program for the middle-sized construction firm in Riyadh (Peterson, 2013, pp. 1029, 1031 – 1032).

The ethics and compliance program creates a model that is useful for the successful integration of corporate culture and legal background on various issues regarding the firm. In this regard, the inclusion of a well-rounded ethics and compliance program and an intricate corporate governance structure provides a combination that provides guidance to employees on the various issues about the firm and the industry from both a legal and operational point of view (Walker, 2016; Verschoor, 2015).

Therefore, the introduction of the proposed ethics and compliance program as outlined earlier should serve to streamline operations, ensure communication flow, and provide the employees with sufficient knowledge of the existing rules and regulations that govern them in the workplace.

References

Legal Information Institute. (n.d.). § 1470.27 Contract violations and termination. Retrieved from Legal Information Institute – University of Cornell School of Law: https://www.law.cornell.edu/cfr/text/7/1470.27

Legal Information Institute. (n.d.). § 635.125 Termination of contract. Retrieved from Legal Information Institute – University of Cornell Law School: https://www.law.cornell.edu/cfr/text/23/635.125

Legal Information Institute. (n.d.). 18 U.S. Code § 201 – Bribery of public officials and witnesses. Retrieved from Legal Information Institute – University of Cornell: https://www.law.cornell.edu/uscode/text/18/201

Legal Information Institute. (n.d.). 48 CFR 49.102 – Notice of termination. Retrieved from Legal Information Institute: https://www.law.cornell.edu/cfr/text/48/49.102

Peterson, E. A. (2013). Ethics and compliance programs: competitive advantage through the law. Journal of Management & Governance, 1027 – 1045.

Verschoor, C. C. (2015). Tools for ethical success. Journal of Strategic Finance; Montvale, 19 – 21.

Walker, R. (2016). International corporate compliance programmes. International Journal of Disclosure and Governance, 70 – 81.

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Safety Standards in Product Design Goals of Ethical Companies

Product design goals
Product design goals

Safety Standards in Product Design Goals of Ethical Companies

Safety regulatory measures and policies are often considered basic tenets and requirements in product design that ethical organizations put into place to ensure that their products comply with the stated standards. As consumers increasingly turn out to be dependent on engineered products, the element of product safety and liability has turned out to be of global significance. As imbued in several companies, the ethicality of product safety and accountability is addressed by considering global trade standards and practices.  The scope of product design as highlighted in design research and practice has successively changed – from a focus on material aspects to a focus on the intangible, from functions to pleasure, from goods to services and values

In this regard, organizations need to ensure that they prioritize the adherence to these measures and requirements by ensuring that their products meet the enshrined safety standards (Langerman, 2015). Meeting the established safety precautions or standards remains an essential aspect of product design; however, it is insufficient. Familiarity with the foundations and principles of the utilitarian model of ethics reveals that to underscore an action as ethical requires one to determine whether an action maximizes the highest level of positive outcomes for several people while on the other hand minimizing all the adverse outcomes to the least number.

            As provided in this case, ensuring that an organization’s product meets the established safety standards may yield the highest favorable outcomes for consumers and minimize the negative repercussions that may pose a threat to the lives of the consumers. According to Langerman (2015), ethical organizations before engaging in launching their products often ensure that pilot tests are conducted several to ensure that they meet the prescribed safety and precautionary measures. However, it is essential to establish that it is often challenging for firms to conduct a 360-degree inquiry or research on their products.

Therefore, this creates the rationale behind faulty products, posing a need for an organization to ensure that products meet and satisfy the needs of the customers (Langerman, 2015).Arguably, meeting safety measures may not be sufficient in product design. Product safety professionals in light of this hold on to more profound convictions regarding the importance of ensuring that the consumers and their companies are provided with the best efforts that support the design, manufacturing, and distribution of products considered safe for consumption.

Specific Stories that would make Doug’s Presentation Interesting: Doug, as provided in this case, may consider including the case of Ford in ensuring that his presentation is appealing or attractive. As provided in Ford’s current operations and planning, it is established that the organization sort after measures driven towards launching their lightweight automobile that was incredibly affordable in price for the consumers. The company president provided specifications that the designers were required to adhere to in the unit’s production.

In other words, the production unit needed to have ensured that the Pinto weighed 2000 pounds and would cost consumers close to $2000 and other related expenses such as advertisements. However, this unit’s production was met with a flaw following the lack of compliance with the federal safety standards established for the production of such a model (Tidwell, 2000). One of the significant problems that were sighted was in regards to the fuel tank that was prone to rapturing when the car was at maximum speed. This occurred following an investigation that occurred after a dreadful accident that left six occupants in the vehicle dead after the rapturing and explosion of the fuel tank.

            Doug would resort to the application of the principle of universalism. According to this principle, the authority of an ethical standard is mainly determined by the level in which a concern or an act treats people, supporting the claim that moral principles often hold for all people and not merely for a section of individuals (Tidwell, 2000). From the tests conducted on this automobile, it was later evident that Ford was in full awareness that its vehicle’s gasoline tank was faulty and prone to explode when the cars were at top speed or its rear collided.

Given this, the company failed to recall these units to correct the situation and was unable to warn the consumers on the effects of the car. Therefore, it reveals that safety measures and standards are ethically vital in organizations, establishing the essence of compliance.

Product Design Goals of Ethical Companies: Likely Possibilities from the Case

As provided in the case above, there are several likelihoods regarding the safety standards of ethical companies’ product design goals. Firstly, ethical organizations may resort to ensuring that their ethical practices are connected to their corporate social responsibilities. Therefore, this establishes that ethical organizations owe their customers, employees, the community, and their shareholders’ safety. These remain fundamental in the fulfillment of their corporate obligations and sustainability.

Utilitarianism provides a straightforward approach that organizations may use to arrive at moral decisions that weigh the cause of their actions in specific situations (Tidwell, 2000). To determine what organizations need to do in cases, such as that of Ford, there is a need first to underpin the courses of their actions. Secondly, organizations may need to determine the foreseeable benefits and consequences of each of their actions for the highest number of people affected.

Lastly, firms may resort to the choice of actions that may provide the greatest of all benefits after taking consideration of the involved costs. In a nutshell, the ethicality of product safety and accountability is addressed by considering global trade standards and practices that guide and provide frameworks that organizations need to follow. 

References

Eryılmaz, E. (2016). Applied Ethics: The Secular and Utilitarian Approach. Turkish Journal of Business Ethics, 9(1). https://doi.org/10.12711/tjbe.2016.9.0011r

Langerman, N. (2015). Safety and ethics. Journal of Chemical Health and Safety, 22(3), 44–45. https://doi.org/10.1016/j.jchas.2015.04.005

Tidwell, A. (2000). Ethics, Safety, and Managers. Business and Professional Ethics Journal, 19(3), 161–180. https://doi.org/10.5840/bpej2000193/43

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Haier Management Control on a Tactical Level

Haier Management: Lower prices. Haier should improve on expanding its market share in the industry of home appliances in the US. To achieve this, Haier should reduce the prices of its products.

Haier Management Control on a Tactical Level
Haier Management Control on a Tactical Level

Areas to improve in Haier management system, how it can be done and its benefit to the organization.

Haier Management: Lower prices

Haier management should improve on expanding its market share in the industry of home appliances in the US. To achieve this, Haier should reduce the prices of its products. Though most US customers expect products from China to be cheaper, Haier maintains its US price level as it has done in China. Haier maintained its price level in the US because it was riding on the notion of high-quality products. Nevertheless, Haier’s ambiguity of its pricing and quality was a problem (Lau & Han, 2012).

Haier can reduce its prices by mitigating its costs by focusing only on profitable products and trim down redundant niche product lines. The company diversification has led to the high cost, and focusing on manufacturing one product line can lower manufacturing costs. The organization can benefit from this move by attracting sophisticated customers who will boost the company’s revenue.

Haeir Management: Mergers and Acquisition (M&A) of renowned brands

Since Haier is stuck in the middle, it can redeem itself through M&A of renowned brands. Currently, Haier has failed in its acquisition initiatives. For instance, Haier withdrew from its acquisition of Maytag, which Whirpool acquired to become one of the renowned appliances makers. Haier also tried to acquire General Electric (GE) but failed (Lau & Han, 2012). General Electric is currently a very successful company and is among the top 20 most profitable US companies. If Haier succeeds in acquiring GE, Haier will save effort and time in increasing its market share in the US and reduce its operation process. M&A will have various benefits to Haier.

For instance, Haier will take over an existing customer base and income cash flow. It will be possible to make sales projections with the already available sales records. Haier will acquire knowledgeable and skillful managers, brand image, and operational know-how. Haier will also offset the massive brand images associated with Chinese firms in the US market. In general, Haier will have increased profits due to the expanded market share.

Shifting from CSR to CSV

Companies have increasingly focused on producing green products due to the elevated issue of global warming and climate change. Green products refer to energy-efficient production and eco-friendly materials that do not have pollutant elements. Haier focuses on public charities in its CSR as is the mission of the Haeir management and undertakes Green Sail, sports, and education (Lau & Han, 2012). However, Haier management should be involved in protecting and sustaining the Earth in what is referred to as creating shared value (CSV) through eco-innovation.

The firm should concentrate on sustainable environmental products and investing in research and development to develop more eco-friendly technologies. The technology will save energy and differentiate products to suit local consumers. Hence, Haier will attract sophisticated consumers in the US and form a global eco-friendly brand image.  In the Haier management system, if you want to build confidence in others, you yourself must be confident. Why did I have faith that the factory would prosper? The straightforward answer is that I knew it was just about to install a new production line that would improve quality and efficiency.

 Differentiation to consider price-sensitive customers

Haier should introduce a new product in the US market with distinct features to a wide range of consumers sensitive to prices (Lau & Han, 2012). These products will match well with Middle-aged consumers. The company should also consider the old customers who prefer well-known brands and care about the services and warrants of the company’s products but are also price-sensitive, and hence they may try new products. This strategy will be beneficial to Haier because it will increase its brand loyalty.      

References

 Lau, A., & Han, J. (2012). Haier: Management Control on a Tactical LeveL. Asia Case Research Centre

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National Appliance Inc Logistics Case Analysis

National Appliance Inc Logistics Case Analysis. According to Marchet, Melacini, Perotti, & Tappia (2016), correlations exist between organizational internationalization choices and logistics operations.

Logistics Case Analysis

National Appliance Inc Logistics Case Analysis

According to Marchet, Melacini, Perotti, & Tappia (2016), correlations exist between organizational internationalization choices and logistics operations. Expressly, the authors point out that logistics serve as crucial enablers for company internationalization, which further contributes to a significant increase in logistics network complexity. Today, society is characterized by an increased demand for flexibility and speed, which require organizations to understand that their logistics strategy serves as a vital aspect of the overall operations and further contributes to achieving corporate objectives (Marchet, Melacini, Perotti, & Tappia, 2016).

In this case, National Appliance Inc has been operational for the past 35 years. During the past 15 years, they have experienced increased growth in their share of the products due to the provision of high-quality products at lower prices. This growth has been coupled with vertical integration in the company’s supply and marketing channels. Nonetheless, the company’s expansion into an international market, Paris, is characterized by various strengths and limitations, especially in logistics planning.

More precisely, the strengths associated with Mr. Reard’s international transportation plan include vast experience and considerable expertise in domestic transport management and logistics. These essential components have been acquired through the company’s successful transportation of their products domestically for the past 15 years, contributing to a significant reduction of transportation costs (Li & Sun, 2014).

Additionally, the plan formulated by Mr. Reard portrays strength based on the control and close monitoring of transportation activities via trucks, which allow him to remain in close contact with the drivers. As a result, this strategy fosters increased flexibility in services and the employment rate for many drivers. Besides, potential delays in truck transportation can be quickly addressed than other modes of transportation. Simultaneously, shipment of goods internationally from New Jersey to LeHavre, France, could significantly reduce transportation costs for the company compared to airplanes (Cook, 2016).

Conversely, Mr. Reard’s plan is characterized by several weaknesses that include a considerable distance between the United States and Paris. If the products are transported via shipping, they will take at least four weeks to reach the destination. As a result, the costs incurred during this period would significantly increase the lead times, ultimately affecting its price. Specifically, transportation of the finished products from the different plants, Memphis, Minneapolis, and Omaha, would significantly increase the costs and contribute to long lead times (Cook, 2016).

Besides, hiring an international transportation manager to take charge of Paris operations would lead to increased costs as he/she would demand a high salary. These shortcomings are coupled with the fact that Mr. Reard and his staff lack the necessary international experience and may thus be ill-equipped to prepare the plan.

An alternative plan that should be presented to Ms. Jameson entails:

  • Establishing a central hub between the three plants to facilitate management and assortment of the products and direct dispatched to New Jersey port to minimize the transportation costs and ensuring quality
  • Use rail transportation as the most reliable, timely, less costly, and risky mode in Europe for bulk products
  • Shift to shipment of the products from New Jersey to LeHavre, France, coupled with the relevant insurance before dispatching of the goods
  • Avoid hiring a transportation manager since it is not elaborately established whether doing business with the Paris distributor is on a contractual or regular basis
  • Engagement management in laying out the operational terms between the Paris distributor and National Appliance Inc

Visual Representation

Logistics visual representation

National Appliance Inc Logistics Case Analysis Conclusion

              As a justification for the strategy applied in Mr. Reard’s case, the international transportation plan formulated above focuses on cost reduction and the maintenance of quality and timely delivery of the company products to the end-user. Essentially, the central hub established will play a pivotal role in ensuring accuracy through the assortment and management of the products before they are dispatched to the New Jersey/New York plant.

This way, the lead time will be significantly reduced, and the goods meant for transportation to Paris will be readily available, fostering timely delivery to the final consumer. Nevertheless, this strategy harbors some shortcomings based on risks and losses associated with railway transportation. Additionally, in case of potential delays, accidents, or power outages, monitoring the transportation of goods becomes a challenge and can deter other sectors of the logistics and transportation process. Contrastingly, using trucks to transport goods may be effective but take more time.

References

Cook, T. A. (2016). Managing growth and expansion into global markets: logistics, transportation, and distribution. CRC Press.

Li, X., & Sun, X. (2014). Operations Management of Logistics and Supply Chain: Issues and Directions. Discrete Dynamics in Nature and Societyhttps://doi.org/10.1155/2014/701938

Marchet, G., Melacini, M., Perotti, S., & Tappia, E. (2016). Shaping the international logistics strategy in the internationalisation process. International Journal of Supply Chain and Operations Resilience2(1), 72. https://doi.org/10.1504/ijscor.2016.075914

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What is love? Essay Paper

What is love?
What is love?

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What is love

What is love?. Love can be said to be a strong emotion of affection towards somebody else. It brings about personal attachment between two or more people. Love is usually demonstrated through acts of compassion and personal kindness as demonstrated by Madame Rosa who adopts Momo who is an orphaned young boy. She gives him accommodation and takes care of his needs. Madame Rosa treats Momo as one of her own. Momo also comes to the aid of his foster mother especially when she grows old and is unable to attend to her daily routine.

He supports her even when she is unable to walk like when he supports her when climbing the stairs. This unselfish and benevolent concern for one another in times of need and happiness is the true manifestation of love. Love goes beyond the physical appearance of a person. It means being concerned with somebody’s welfare and well being. This is as demonstrated by Madame Rosa when he adopts Momo.

If she had not done so, the young boy could have been exposed to the many dangers that face street children of being prone to all manner of evils like drug addiction, diseases, theft and even death. The way Madame Rosa identifies with the boy and rescues him from the vulnerability of street life shows great compassion and affection. The assertion by Madame Rosa that “I’ve never really loved anybody else” (Gary 152) demonstrates how her heart and spirit had embraced this young boy to a point that they were inseparable.

What is love

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It shows that psychologically, Madame Rosa felt at home and at ease when living with this boy even though they had no blood relationship. The boy felt great affection towards this woman who shows him the motherly love that he had not experienced. This act of concern makes the boy treasure the woman so much that the bond between the two can be said to be inexplicably strong.

Madame Rosa depicts the care being accorded her by the boy in great stride. She knows that since she has grown old, nobody is really interested in her. She therefore knows that Momo, is her everything from providing her support to doing almost all the domestic chores in the house. This scenario reminds Madame Rosa of her glorious days and also reminds her of the current status where she is old and unable to attend to all her needs. She is not worried because she knows that there is somebody who will unwaveringly attend to all her needs.

The impeccable thing is that this boy is at peace to reciprocate what the woman did to him when he was also in need. This is also depicted in the poem ‘When you are old’ where it says “But one man loved the pilgrim soul in you,” (http://www.poetryfoundation.org/poem/172055 ). Love is therefore demonstrated as the acts of kindness and compassion to somebody regardless of whether you know him or her.

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Such acts of kindness will are reciprocated when one may also be in need. God is known to reward all acts of kindness and passionate love for others in many ways and this underscores the notion that each one of us should treat others like their own. This will make us find solace and the grace in life since our ways will be atoned with God’s grace. This is as depicted by Shakespeare when he says our good acts in life will make us not “look at myself, cursing my fate” (http://shakespeare-online.com/sonnets/29detail.html )

Works cited

Gary, R. The life Before Us. New York. New Directions Publications Corp., 1986

Yeats, W.  “When You Are Old” Web. Accessed on 14th August 2012

Shakespeare, W.  “Sonnet-29”  Web. Accessed on 14 August 2012

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Geox case study

Geox case study
Geox case study

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Geox case study

Case analysis: Geox shoe company

GEOX: BREATHING INNOVATION INTO SHOES

            The impact of innovation has been increasing in the recent few years. Innovation is taking place in all products including shoe manufacturing factories. Mr. Palegato’s story points to “necessity” as the driving force behind innovations. 

However, we also learn that most innovation ideas are not put to use due to lack of ability to implement them. He approached different shoe manufacturing firms who did not buy his idea of ‘breathing shoe’ product.

Product diversification and development is seen as another driving force behind the success of many companies. Geox Company realized the importance of product diversification and extended their breathability technology into fabric products. Geox embraced innovation in its operation which gave the company a competitive advantage.

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Important points

Geox history

GEOX: BREATHING INNOVATION INTO SHOES

Continuous innovation is necessary for the survival of human race due to the ever changing natural demands. Product development is essential for company’s performance in the current competitive world markets. Though initially started by manufacturing shoes for the children, Geox extended breathing technology into jackets and other fabric items.

The company invested heavily in research and development by involving engineers and best universities. The company carried out continuous experiments in its state of the art laboratories, continuously generating new research ideas for the company.

Patents and copyright laws are important in driving innovation. Gaining patent rights has helped many companies to survive in the world market. Geox shoe producing company is known for innovation and company patent rights have been protected sufficiently and their innovations are not under threats of copying and imitation by its rivals.

Geox investments in research and development yielded a stream of patents; over 50 patents were obtained to its name by September 2009. There were patents related to equipment, machinery and even processes and materials. 

Smart people with smart ideas have always found their way out just like Mr. Polecat. Although most people are creative, many lack the ability to translate their good ideas into business opportunities. Engaging in marketing research gives any given company an opportunity to be competitive.

Technological development is necessary to support innovations. Goex did not enter into main shoe market until they introduced a different technology in their breathing technology to help them expand into producing sports shoes. Technology is seen as a pre-condition for innovation. Innovation alone cannot guarantee good performance of company products especially in the fashion-mindful shoe industry. 

Competition should not deter the implementation of business ideas. Fierce competition in the shoe manufacturing sector did not deter Polegato from pursuing his business idea. Instead it helped him come up with better ideas to win customers. Competition from other players in the industry helped the firm to grow in strength.

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Global footwear industry

The world market is growing and more so the demands for shoes just like other goods and services. The USA provides the biggest market for shoes although Asian market is growing rapidly. This market is highly segmented hence provides manufacturers the opportunity to specialize, for instance in casual wear, children and sports.

            Market segmentation gives new entrants an opportunity to venture into big market by starting off with a particular market segment and later expand into the bigger market. Geox entered the shoe market by producing shoes for children before venturing into the larger market.

We should be flexible and avoid sticking to our areas of specialization all the time. Although specialization has been found to increase individual competence in a particular area, overspecialization may lead to loss of opportunities for many people. Having interest in things outside your area of expertise helped in establishment of Geox company which is quite different from Polegato’s areas of specialization.

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Geox profile

Setting clear company objectives is necessary for the performance of any company. Geox Footwear Company just like other firms in footwear industry has clear objectives that guide their operations. Their operations are lined towards achieving the set objectives.  

Outsourcing is necessary for cutting costs and helps in saving costs associated with setting up new firms in a new area. The money saved can be utilized in other areas that are more demanding. For instance, Geox outsourced its production to Asian shoe factories which contributed over 95% of its total production. Outsourcing was the company’s easiest way of entering new markets of Asia without necessarily installing full operational plant.

Brand name is necessary marketing tool for company products. Geox name had been established as a popular brand name across the globe, this acted as a major marketing tool for its products. Company brand name differentiates its products from those of its competitors and is easily accepted in the market without even much advertisement and sales promotion.

However advertisement and sales promotion plays a crucial role in popularizing company products. However, communication strategy determines the effectiveness of advertising to the audience.

A well established distribution channel is equally necessary for company performance. Customers require goods when they need them and this depends on the efficiency of company’s distribution network. Geox had excellent distribution network spread across the globe of over 10,000 multi- brand stores and 997 single stores Geox stores located in major world cities.

Staff development through training and promotion cannot be underestimated. Staffs need to be motivated to give their best in terms of performance. For instance, Geox School was established in 2001 which was training school for both new recruits and company staff.

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Footwear key players

Footwear industry is one of the most competitive industries in the world today. The major players includes boss holdings, brown shoe company, coach inclusive company,  Iconix Brand Group, Rocky Brands, skin Inc. among others.

However, challenges are inevitable and companies should be prepared for the challenges that arise. For instance, global economic downtown exhibited in 2009, adversely affected Geox just like many others. 

However drastic measures are called for to overcome external challenges. For example, the company halted its expansion strategy until the period of economic recovery to consolidate its weakened financial status. In most cases, strategic change is necessary to minimize production and operational costs sometimes leading to the laying off some staff to cut down company costs. 

Opinion

From the story of Mr. Mario Polegato and Geox Shoe Company, we realize that most innovative ideas are left unutilized due to lack of ability to implement them.  It’s my view that had not Mr. Polegato had the ability and means to raise funds to implement his breathing shoe technology, the idea could have been wasted.

Innovation is key for survival of any company in the evolving world market hence patenting laws need to be enhanced to promote innovation. Governments should embrace the idea generation to encourage creativity among its citizens.

Companies should carry out industry and external market analysis to inform its strategic marking process. Analysis of industry will assist in establishing company strengths and weaknesses as well available opportunities to exploit, and threats posed by the industry players. External analysis will prepare the company for unforeseen challenges and benefits. 

Investment in research and development should be accompanied with investments in new technology and infrastructure that provide conducive environment for the function of companies. Globalization and opening of borders have greatly contributed to the growth of many firms by offering markets for their goods and services. 

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Conclusion

Innovation is taking its rightful place as the main weapon for company survival in the global market. Therefore, this noble concept should be supported by all governments and major players tasked with regulation of trade and patent rights. Technological development, political stability, favorable economic environment and ecological and social factors have both negative and positive influence on performance of manufacturing firms. Companies should always be prepared for the unforeseen circumstances that have led to downfall of many companies in the past.

Reference

Ali Farahoomand. (2011) Breathing innovation into shoes; Asia case research Centre, University of Hong Kong. POON Kam Kai series; 10/472c

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Fortis Bank SA/NV v Indian Overseas Bank

Fortis Bank SA/NV v Indian Overseas Bank
Fortis Bank SA/NV v Indian Overseas Bank

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Fortis Bank SA/NV v Indian Overseas Bank

Outline:  Analysis of the judgment in the case of Fortis Bank SA/NV v Indian Overseas Bank.

  1. Introduction: gives a history of the case and the judgment.
  2. Body:
  3. The reasoning applied by the judge to arrive at the ruling.
  4. Analysis of the law applied. 
  5. Examples of case studies where the same law was applied.
  6. Conclusion: a summary of the issues discussed above.
  7. Bibliography: a list of the references cited.

An analysis of the judgment in the Fortis Bank SA/NV v Indian Overseas Bank case

Letters of credit have been in use for many years. There are two types of letters of credit: commercial letters of credit and stand by letters of credit. The purpose of commercial letters of credit is to ensure payment of goods in international trade.[1] Standby letters of credit are used to provide third party credit support.[2]Article 5 of the Uniform Commercial Code, applies to all types of letters of credit.  UCP set of rules have undergone several revisions to meet the demands that arise from transactions.[3]

Following revision, UCP 600 was drawn up under the International Chamber of Commerce in 2006 and took effect in July 1, 2007.[4] It replaced UCP 500.[5] Its full name is 2007 Revision of Uniform Customs & Practice for Documentary Credits, UCP 600.[6]A letter of credit contains the independence principle. By the independence principle, payment is only done when all documents are received by the issuer.[7] 

Fortis Bank SA/NV v Indian Overseas Bank

This principle is found in article 4(a) and 5 of UCP 600. UCP 600 is only applicable where the both parties have agreed that is applicable.[8]  A number of issues have arisen from the interpretation and implementation of the set of rules.[9] However, with continued application and interpretation of UCP 600, the set of rules become clearer and clearer. One good example of a case that has contributed to the interpretation of UCP 600 is the Fortis Bank/Stemcor v Indian Overseas Bank.[10]

Fortis Bank SA/NV v Indian Overseas Bank

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In August 2008, Stemcor signed five contracts for the sale of steel scrap to SESA in India.[11] Payment was to be by sight letter of credit (L/C) opened by a first class bank. This was advised by the first claimant bank in this case, Fortis. The applicant of the L/C was MSTC, a company that assisted SESA in doing the purchase. Indian Overseas Bank opened five letters of credit. These were subject to UCP600.

Thereafter, IOB notified Fortis. Stemcor presented the relevant documents to Fortis including the bills of lading as was required. Fortis went ahead to make payments of letters of credit 1-3. Fortis forwarded the remaining two L/Cs to IOB. Market prices had fallen sharply by the time the shipment was done.

For this reason, SESA declined to pay for the cargo. It then notified MSTC of discrepancies in the documents. As a result, IOB went ahead to reject the documents presented to it by Fortis. Thus, it refused to pay Fortis under letters of credit 1-3 or Stemcor under letters of credit 4-5. This forced Fortis and Stemcor to move to the Commercial Courts.[12]

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Fortis Bank SA/NV v Indian Overseas Bank

Hamblen J held that IOB did not have any valid defense except for one point of discrepancy in the beneficiary’s consolidated certificate. The judge also decided that IOB had the responsibility to act in accordance with its statement on the notice with reasonable promptness. Failure to do this would trigger the preclusion rule that would require IOB to honor the letters of credit. IOB went ahead to appeal. The Court of Appeal gave the judgment ([2011] EWCA Civ 58)[13]that dismissed IOB’s claim.

The court decision stood by the fact that sub-article 16 (c) of the UCP 600 gave a provision for what a bank ought to do, if it decides to reject the documents.[14] The provision states that the issuing bank must give a notice to the presenter. The notice should indicate that the bank is refusing to honor or negotiate, the discrepancy in respect to which the bank is refusing to honor or negotiate.

The bank is holding the documents pending further instructions from the presenter, that the issuing bank is holding the documents until it receives a waiver from the presenter and accepts it or receives instructions from the presenter prior to agreeing to accept a waiver; or that the bank is returning the documents or that the bank is acting in accordance with the instructions previously received from the presenter.

Fortis Bank SA/NV v Indian Overseas Bank

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Based on this, the judge confirmed that IOB was in breach of the contract to Stemcor as it failed to return the documents to Stemcor. The limit of reasonable promptness was also defined. The period ought to be shorter than five banking days, i.e. the time taken to decide as to whether or not to return the documents. With reference to this case, the need for a quick return of documents is emphasized in Legal Matters.[15] The court determined that IOB returned the documents weeks later after having said that they had done so.[16]

Fortis Bank SA/NV v Indian Overseas Bank

With regard to L/Cs 1-3, the judge held that IOB acted in breach of the agreement between them and Fortis. Thus, it was obligated to reimburse Fortis. However, this did not extend to Stemcor. From article 7 (a) (ii) of UCP600, the issuing bank had the duty to honour the credit if there was a failure by the nominated bank to pay. Hence, once Fortis discharged its obligations to Stemcor, Indian Overseas Bank was not obligated to Stemcor.

Two causation issues were raised in the case. The first one dealt with Stemcor’s failure to establish on the balance of probabilities that had Indian Overseas Bank honoured the five letters of credit, SESA or MSTC would have paid for or taken the cargo. Thus, port and detention charges would not have been incurred. Secondly, Stemcor was seeking payment not on wrongful detention of the documents. Rather, their claim was based on failure to make payment. For this reason, the judge expressed doubts regarding an effective cause of the loss.

Fortis Bank SA/NV v Indian Overseas Bank

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Further judgment saw the judge reject arguments brought forth by Indian Overseas Bank. The judge held that Stemcor did not have the documents of title in its possession and it could not assert any control over the goods. By asserting control over the goods, Stemcor would have lost its claim against IOB or SESA. The judge asserted the validity and fairness of the deals between Stemcor and the carrier. Indian Overseas Bank also argued that Stemcor was arguing repudiation.  However, the judge pointed out that it would be commercially unwise for Stemcor to adopt this proposal in light of the risks involved in the law. Based on this, Indian Overseas Bank failed to prove that Stemcor had breached its contract.

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Fortis Bank SA/NV v Indian Overseas Bank

The judge’s conclusion didn’t express clearly whether Stemcor was expected to mitigate the loss. However, this aspect was implied in the judgment. This may be deemed to be contrary to the suggestion in by Gutterage and Megrah.[17] They suggest that the beneficiary isn’t obligated to mitigate the losses incurred in a transaction.

Further analysis of this case shows that Stemcor could have taken a different approach with regards to the letters of credit. Stemcor would have argued that there was wrongful detention of the documents by IOB. Moreover, Stemcor also has a basis to seek damages from SESA in relation to letters of credit 1-3. This may be based on the CFR sale contract.[18]

As mentioned earlier, the UCP 600 is subject to different interpretations. Nevertheless, the ruling made in this case acts as a precedent especially with regards to obligation of an issuing bank to return documents if there are any discrepancies within them.[19]

Fortis Bank SA/NV v Indian Overseas Bank

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L/C Consultancy Services highlights some of the risks involved in a letter of credit transaction.[20] The applicants risk non delivery, exchange rate risk or goods delivered being of inferior quality. In this particular case, SESA declined to take the goods due to poor market prices following the delay by the banks.

In conclusion, this case highlights the importance of a timely response. Due to failure by Indian Overseas Bank to notify and send back the documents to Fortis in time, it was forced to reimburse the claiming bank. Also, payment is only done upon receipt of the letter of credit. In addition to this, the letters of credit carry much weight in determining whether one of the parties is paid or not.

BIBLIOGRAPHY

Book sources:

Andrle .P, ‘Ambiguities in the new UCP’, DC Insight, Vol 13, pp.17-18                 

Cheung, Louise, ‘Contract Law’,” Legal Matters” Summer 2011.

Commentary on UCP 600, International Chamber of Commerce. Paris, France: ICC Services, 2007.

Dolan, F. John, Letters of credit A.S.Pratt, 4th Ed., 2007, pp 1-31.

DPP Fortis Bank/Stemcor v Indian Overseas Bank,  [2011] EWCA, Civ 58.

Gutteridge & Mgrah, Law of Bankers’ Commercial Credits, 8th edn, 2001

Xiang Gao and Buckley Ross C., The Unique Jurisprudence of Letters of Credit: Its Origin and Sources, 4 SAN DIEGO INT’L L. J. 91 (2003).

Journals and other publications:

‘Current legal developments at IMO’, “Shipping & Trade Law”, Informal Law & Finance, 1-2 Bolt Court, London Vol.11 no. 5 June 2011, p.6

Gallagher,Jr.P. Daniel ; Brown, Michael J.; Parson, Robert“Fortis Bank/Stemcor v Indian 

Overseas Bank: Article 16 under scrutiny March 03, 2011.

Goode Roy, Guide to the ICC uniform rules for demand guarantees, International Chamber of Commerce, Publication No. 510, 1992

ICC, “International Standard Banking Practice for the Examination of Documents under Documentary Credits,” No. 681, 2007.

ICC, The Uniform Customs and Practice for Documentary Credits, 2007 Revision,

ICC Publication no. 600 (“UCP”)

 Nielsen Dr. Jens; Nielsen, Nicolai, Standby Letters of Credit and the ISP 98:

A European Perspective¸ 23 Banking & finance L. REV 163 (2001), 

WoodJeffrey S., “Drafting letters of credit: Basic issues under article 5 of the uniform commercial code, UCP 600, and ISP98”.The Banking Law Journal, Alexesolutions,inc. Feb 2008p.2

Web sources:Fortis Bank SA/NV v Indian Overseas Bank

Fortis Bank and Stemcor UK Limited v Indian Overseas Bank, 20 Essex street, <file:///D:/case%20raising%20issue%20eviednce.htm>, (accessed 22 Nov 2011).

‘International terms of trade explained’ International letter of credit, <http://www.creditmanagementworld.com/letterofcredit/lcinternationalterms.html> 2010, (accessed on 22 Nov2011).

Letters of Credit’, Propery Law Company-Trade Finance, Practical Law Publishing Limited. 

<finance.practicallaw.com/topic0-103-1109>, 2010, (accessed on 22 Nov 2011)

 ‘Risks of letters of credit’, L/C Consultancy Services, http://www.letterofcredit.biz/Risks_in_Letters_of_Credit.html>, 2009, (accessed on 22 Nov 2011).

Royal Courts of Justice, Strand, London, WC2A 2LL, 31/01/2011.

UCP 600, L/C Consultancy Services, <http://www.letterofcredit.biz/UCP600.htm>,2011, (accessed 22 Nov 2011).


[1] Jeffrey S. Wood, “Drafting letters of credit: Basic issues under article 5 of the uniform commercial code, UCP 600, and ISP98”.The Banking Law Journal, ALEXeSOLUTIONS,INC. Feb 2008p.2

[2]Dr. Jens Nielsen and Nicolai Nielsen, Standby Letters of Credit and the ISP 98:

A European Perspective¸ 23 Banking & finance L. REV 163 (2001), 

[3]Roy Goode, Guide to the ICC uniform rules for demand guarantees,International Chamber of Commerce, Publication No. 510, 1992

[4] Commentary on UCP 600, International Chamber of Commerce. Paris, France: ICC Services, 2007

[5]Gao Xiang and Ross C. Buckley, The Unique Jurisprudence of Letters ofCredit: Its Origin and Sources, 4 SAN DIEGO INT’L L. J. 91 (2003).

[6]UCP 600, L/C Consultancy Services,<http://www.letterofcredit.biz/UCP600.htm>,2011, (accessed 22 Nov 2011)

[7]John F. Dolan, Letters of credit A.S.Pratt, 4th Ed., 2007, pp 1-31.

[8]“The Uniform Customs and Practice for Documentary Credits, 2007 Revision,

ICC Publication no. 600 (“UCP”)

[9]P,  Andrle, ‘Ambiguities in the new UCP’, DCInsight, vol. 13, pp.17-18

[10] DPP Fortis Bank/Stemcor v Indian Overseas Bank,  [2011] EWCA, Civ 58

[11] ‘Current legal developments at IMO’, Shipping & Trade Law, Informa Law & Finance, 1-2 Bolt Court, London Vol.11 no. 5 June 2011, p.6

[12]‘ Letters of Credit’, Propery Law Company-Trade Finance, Practical Law Publishing Limited. 

<finance.practicallaw.com/topic0-103-1109>, 2010, (accessed on 22 Nov 2011)

[13] Royal Courts of Justice, Strand, London, WC2A 2LL, 31/01/2011.

[14] “International Standard Banking Practice for the Examination of Documents under Documentary Credits,” ICC, no. 681, 2007.

[15]Louise Cheung, ‘Contract Law’,” Legal Matters” Summer 2011.

[16] Daniel P. Gallagher,Jr., Michael J. Brown, Robert Parson,“Fortis Bank/Stemcor v Indian Overseas Bank : Article 16 under scrutiny March 03, 2011.

[17] Gutteridge & Mgrah, Law of Bankers’ Commercial Credits, 8th edn, 2001

[18] ‘International terms of trade explained’ International letter of credit, <http://www.creditmanagementworld.com/letterofcredit/lcinternationalterms.html> 2010, (accessed on 22 Nov2011)

[19]Fortis Bank and Stemcor UK Limited v Indian Overseas Bank,20 Essex street, <file:///D:/case%20raising%20issue%20eviednce.htm>, (accessed 22 Nov 2011)

[20]‘ Risks of letters of credit’, L/C Consultancy Services,http://www.letterofcredit.biz/Risks_in_Letters_of_Credit.html>, 2009, ( accessed  22 Nov 2011).

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National Appliance Inc case study 2021

National Appliance Inc
National Appliance Inc

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National Appliance Inc CASE STUDY

National Appliance Inc case study Bob Reard, Director of corporate transportation for National Appliance, Inc., has just hung up the phone after a lengthy discussion with Susan Jameson, vice president of logistics.

National Appliance Inc has just acquired an appliance distributor located in Paris, and the logistics department has two months to develop an operating process to support this European distributor with National Appliance Inc products.  The shipments to Paris will begin in approximately five months, and Mr. Reard is to prepare a transportation operating plan for these shipments.  

National Appliance Inc is a medium-size U.S. manufacturer of refrigerators and electric ranges.  During the past fifteen years, National Appliance Inc has increased its share of the refrigerator and electric range market from less than 2 percent to 20 percent.  

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Part of the reason for this tremendous growth is that National Appliance Inc offers high-quality products at low prices.  In addition, National Appliance Inc has vertically integrated both its supply and marketing channels.  National believes that quality products result from actually owning and managing key component vendors and that quality marketing and sales efforts result from directly managing distributors and retail appliance outlets.  

It surprised Mr. Reard to learn that National Appliance Inc had purchased control of a European alliance distributor.  There had been many rumors about expansion into the European market, but Mr. Reard had felt that National Appliance Inc would merely develop a contractual relationship with a distributor in Europe, not purchase a distributor. 

Purchasing the Paris distributor is the first major international business venture for National Appliance Inc in its thirty-five-year history.  During the late 1990’s the company had unsuccessfully attempted to market refrigerators in both Canada and Mexico.  Mr. Reard had personally managed the truck shipments to both countries. 

 Consequently Mr. Reard and his staff have very limited international experience.  They do, however, possess considerable expertise in domestic transportation, having successfully controlled both transportation costs and services during the company’s rapid growth in the past fifteen years.

Given the emphasis on quality products and service, top management has mandated consistent, low lead times.  National Appliance Inc delivers domestic distributor orders in less than five days from the order date; the company allows no exceptions to this service policy.  

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Truck transportation, including a private fleet, is the primary mode the company uses for both inbound and outbound shipments.  Spare parts are normally shipped by ground express, but the company uses air express when the distributor or dealer needs a special part immediately.  Ms. Jameson has established a logistics quality control program that measures carrier performance and has used Mr. Reard’s managerial skills to assure acceptable performance from National Appliance Inc carriers.

Having had little experience in international transportation, Mr. Reard feels a bit out of his element in developing an international transporation plan.  Ms. Jameson has assured him that transportation is transportation and that the only difference between international and domestic transportation is distance.  

Distance is going to be a major factor, since National Appliance Inc has plants located in Memphis, Minneapolis, and Omaha.  This long distance from the European market will contribute to two basic problems; high transport costs and long lead times.  Moving the products from the plants to the Atlantic or Gulf ports will require some form of ground transporation.  Ocean carrier shipment will be long, and Mr. Reard will have to arrange to move the product from the French entry port to Paris.  Mr. Reard is sure that he can hire an international transportation manager, but he will have to pay a high salary.

            With the logistics planning meeting set for the next morning at 8:00 a.m., Mr. Reard prepares the following transporation plan for Ms. Jameson:

  1. Finished product from all three plants will be shipped by truck to NY/New Jersey ports.
  2. Water transportation will be used from New York/NJ to LeHavre, France.
  3. Trucks will transport the products from LeHavre to the Paris distributor.
  4. From Paris, the distributor will arrange transportation to the ultimate customer.
  5. An international transportation manager will be hired.

Mr. Reard estimates that the total transit time required for this move will be approximately four weeks.

National Appliance Inc, Case study Questions:

For this case, you must do the following:

a)  Type up the answer to the question below, using supporting materials from text, class, news, research citations, etc. 

  1. Develop an alternative international plan to present to Ms.  Jameson, and provide justification sufficient to support its adoption. (include the strengths and weaknesses of your plan)

b)  You must include one visual diagram, and include one justification for your strategy (strength or weakness).  (For example, if driver issues might be a problem with your solution, you can tell why this isn’t a problem, based on the corporate strategy)

c) Include an overall conclusion of the case analysis.

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MODEL ANSWER

National Appliances Inc Case study

The current international plan made by Mr. Reard has some strengths and weaknesses but needs much improvement. Mr. Reard plans on transporting all finished products from three different locations to one main port through trucks. He also plans on using water transportation to deliver the products to the France harbor where they will be then transported to Paris through trucks. Due to his lack of experience in international transportation, Mr. Reard plans on hiring an international transport manager which will be quite hefty.

The main problems are a long lead time and high transportation cost from the USA to France. An alternative plan can be formulated in order to eliminate the weaknesses in Mr. Reards’ plan as well as eliminating the problems that are predicted. A new and better plan will be formulated in order to minimize on the scale of the current problems.

There will be a need for a central hub, where all products from Memphis, Minneapolis, and Omaha will be stored awaiting shipping and distribution. This will inevitably reduce transportation cost from all three locations to the harbor. A central hub will offer a service window defined by delivery frequency and response time to order (Rodrigue 2006). 

According to (Carnarius 2018), longer journeys through rail can be cost effective as compared to road. This is because it is having reliable transit times and schedules and also fast and cost-effective. Moreover, one train can carry goods equivalent to 400 trucks hence more products can be transported to the port at once (Carnarius 2018).

Considering the amount of products to be transported, other modes of transport, like air, are considered economically unviable. Transporting cargo through the ocean is cost effective but at the same time disadvantageous due to long lead times (Carnarius 2018). Even though the four weeks of the time the water transportation is longer than the usual domestic time, it will reduce the cost for the company significantly.

Mr. Reard and his staff have helped in increasing the sales of National appliances from two percent to twenty percent in the last fifteen years. They possess considerable expertise in domestic transportation, having successfully controlled both transportation costs and services during the company’s rapid growth in the past fifteen years. Considering his experience, Mr. reard is capable of overseeing the whole project and will assure an acceptable performance from National appliances. Moreover, hiring a long-term employee will be expensive for the company. An alternative would be to consult an expert initially for setting up international operations. They will help the company overcome challenges and also increase revenue (Business News Daily 2021).

Using the new formulated plan will not only be cost effective but also reduce the long lead time. The company will have a smooth entrance into the global market and will inevitably see a high profit. A visualization of the new plan is presented in figure 1. The plan that would otherwise be presented to Ms. Jameson will be as follows:

  1. A central hub will be created between the three locations where all products will be transported from for New York/ new jersey in order to reduce transportation cost.
  2. In order to minimize on transportation cost, the products will be taken to the New York/new jersey ports through rail transportation.
  3. From the USA ports, the products will be transported through water to the LeHarve harbor in France.
  4. An international transport manager will not be hired, instead Mr. Reard will be overseeing the whole project.

References

Business news daily (2021). What is a business consultant. Retrieved from https://www.businessnewsdaily.com/4610-business-consultant.html

Carnarius J. (2018). Modes of Transportation explained: Which type of cargo and freight transportation is the best?Retrieved from https://forto.com/en/blog/modes-transportation-explained-best/

Rodrigue J. P. (2006). The geography of transport systems: logistics and freight distribution. Retrieved from https://transportgeography.org/contents/chapter7/logistics-freight-distribution/

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National Appliance Inc Case Study