Case solutions Case 2: Intel: Strategic decisions in locating a new assembly and test plant. Dahlia in China is the most attractive site for Intel to locate Assembly and Test plant in terms of its low-cosseted workforce and high labor productivity with skilled workers, reliable and qualified power infrastructure, as well as a relatively open environment and the increasingly mature law and regulation. Criteria I I Power infrastructure (reliability/quality) I Sufficient to meet economic development I Atwater infrastructure (reliability/quality) I I Distribution network I Daily water supply: 1. 3 million tons Atwater rates: $0. 4/MM
I waste water: $0. 36/MM I International shipping and logistics hub (Free trade zone) I I Transportation infrastructure Airport: 88 routs (17 international) I Roadway: well-linked expressway I Port: strong handling capacity I $10/kHz (low) 122 colleges and universities I I Electricity rate price I I Educated workforce I Government tax & incentives I Income tax reduction &exemption/ refund paid tax Source: Adapted from Select Data for Potential AT Plant Sites in 2005 As the largest developing country, the advantage of China is irreplaceable albeit the labor cost is considered no longer cheaper than other south-eastern countries doodads.
Locating AT plant in Dahlia, Intel could reap the fruit of highly productive and well-trained workers and fully developed infrastructure supported by government. Most importantly, with the currently invested chip FAA in Dahlia, Intel would take advantage of short lean time by establishing AT plant in the place where the lab is located, which also favorable to the electronic products producers.
However, the relationship building with local bureaucracy is seen as a barrier for locating the plant (Lacer and Herman 2012). Actually, the chip giant like Intel has ore bargain power when it comes to government restriction and personal connection, given the huge economic benefit and a great number of Job opportunities that Intel would bring to Dahlia. Moreover, there are two AT plant established in Changed and Pudding.
This successful experience is somehow helpful for negotiation with Chinese government. Additionally, intellectual property protection still remain a risk for investing in China, according to Global competitiveness report (2012) however, China made more effort to intellectual property protection than other Asian countries such a India, Thailand and Vietnam.
Indeed China is increasingly concentrate on intellectual property by enhancing the awareness and progressing IP legislation, aiming to provide a healthy invest environment. Case 3: Food fight: The US, Europe, and Trade in Hormone-Treated Beef (What does the evolution of the dispute reveal about the strengths and limitations of the WTFO dispute settlement process) Limitations Retaliation. The approved retaliation still is perceived as a teeth imposing threat for the depute settlement system of WTFO.
In this case, during the depute settlement process, US and Canada are allowed to impose an equivalent value of retaliation tariff n the EX. exported products, which is helpless to settle a dispute but only deteriorate the stalemate that two parties encountered by falling into a vicious circle that against hostilely to each other. Weak enforcement mechanism. Europe persist its ban on non-hormone beef even though the ban is Justified by WTFO is not consistent with the SSP agreement and should be cancelled within 15 months (Food Fight n. . ). The enforcement mechanism however offer loopholes where not every member would follow rules especially when it comes to the superpower. After all, WTFO merely is a platform providing opportunity or member countries to settle disputes rather than a actual power entity. Business lobby. The final decision made by WTFO is easily favorable to big business due to their influential power. In this case, it seems that US could take advantage of their state sovereignty.
Time-consuming process. The whole settlement process could not only take a huge amount of time but also considerable economic losses. After the panel established in 2005, the final report was postpone to 2007 for the case’s complexity. Strengths Well-organized structure. There is clear defined stages and the fixed timetable to allow during the dispute settlement procedure. This dispute settlement system indeed become more effective than that of GAIT 1947 (Food Fight n. . ), which is capable of dealing with complicated cases. Reliable dispute settlement system. From t 2003 in addition to 2 consultations, 71 panel reports and 47 Appellate reports were released with an substantially inclined appeal rate, suggesting that countries member are in a strong position to effectively settle disputes through this well-running system (World Trade Organization n. D. ). In this case, however, the complexity could come down to the scientific nature.
In other words, the standard of non-hormone beef related to potential and uncertain harm is vague that cannot be clearly defined. Case 4: what is the force driving collaborative consumption? The emergence of collaborative consumption could come down to the interdependent factors, namely, economic force, environmental force, technological force as and social force. Economically, the global financial crisis is a great contributor to the lifestyle change that discourages materialism and overcompensation, considering the increasing cost of living.
In zipper’s case, the considerable cost of fuel, parking and maintenance could lower the attractiveness of owning a car, while hourly renting a car is more economical and convenient (Network Weekly News 2011). Environmentally, the increasingly deteriorative ecosystem resulted from resource- consuming products such as cars and house (over-occupied land) urges people to be more responsible to their communities with environmental awareness. To mitigate the pressure on environment, choosing an environmental-friendly consumptions which make full use of engorge and resources would be perfectly acceptable.
Technologically, the highly connected social network enabling people to built mutual rust via checking and tracking people’s credits on Internet largely contributes the emerging collaborative consumption, providing the commercial chance to the potential buyers and sellers with more convenience and less costs. With the state-of- the-art technology, Zipper company, for example, could offer the nearest position for car renting based on maps and satellite and the online payment systems, which creates value for the customers by providing a totally new consumer experience.
Socially, the changing owner-snip patterns due in part to the depressing economic climate is responsible to the collaborative consumption. Especially to the young generation with a different mindset, who emphasizing a more free lifestyle prefer to rent a car or a house rather than purchasing a car or a house. In addition, the re- arbitration with a surge of empty nesters returning back to the communities makes a contribution to the sharing economic as well.
With an increasing number of people stayed in cities, a prosperous market for collaborative consumption is expected (Schuler 2013). Case 5: The LOGO Group: Envisioning risk in Asia Stepping up in Asia: How do we increase our penetration of the Asian toy market? Pick] ‘Be the best at creating value for our customers and sales channels’ is one of the principles that emphasized in the “Shared Vision” strategy by LOGO group (Mikes and Hammed 2012). Therefore, consumer preference and distribution channels are the crucial risks that should be taken into account.
Consumption concept towards LOGO toys is of strategically importance since to create value based on meeting consumers’ need is the key to dominate the toys market. Asian parent’s and children are pay less attention to extracurricular activities and spend more time on study, the product sign should be reconsidered based on combining the core competency and the way how Asian people see toys. As the number of middle class who is targeted by LOGO group is increasing in emerging market, the consumption trend might change in next decades.
However, the emphasize on education still deep into Asian parent’s’ mind which cannot be neglected at the same time. Additionally, in the emerging economies such as China, the large global relating partners are likely to play a increasingly significant role in the future distribution channel due to their extensive expansion in the emerging market. Nevertheless, it seems that many small retailers that are less focus on the stock turnovers and value creation are probably still the mainstream sales channels in a medium term.
As can be seen from the scenario planning chart, it has four different scenario in terms of consumer preference and distribution channels. Scenario 1. In the Big Mac model, the LOGO bricks is considered as the entertainment toys by the Asian parent’s who want to offer a different life for their children. A wide range of product catching up with the latest trend is required to satisfy the nonusers’ need, given that the kids love newness (Mikes and Hammed 2012). The late- stage consummation hence should be used in supply chain since the demand is unpredictable.
For example, the bricks assembling could not be completed until they are delivered to the local warehouse where the final packaging could be finished based on what consumer need, which provides the flexibility to the whole supply chain. Also, an agile logistics is required as the large global retailers demand a high in-store availability without any product delay. Scenario 2. In the Mid Tailor model, there is less product variety, given that the Asian aren’t prefer educational toys rather than entertainment ones.
The advantage of this model is that the demand is relatively predictable due to the specifically required toys. A short lean time is still a crucial element demented by the large international retailers. To survive in Asian market, a heavy investment on educational product innovation based on consumer insights is the priority for LOGO group that is facing the threat of diminishing play time. Scenario 3. In Mass Mold, a fierce competitions might emerge because LOGO group merely relays on the small local retailers who display more than one competitor rand in retail store.