The Assignment

You will write an analysis of the problem (this is the Main Challenge, notany of the Mini Challenges) from the perspective of his/her subject specialism. The analysiswill end with a firm recommendation for a course of action. Thinking about the makeup of atypical team, this will mean that the problem is explored from a number of viewpoints:financial, HR, production, etc. You will need then to reflect on the impact of your decision onyour business. (1000 words)

This is the scenario of the main Challenge:
Demand: The war in Oilistan is over and oil exports have returned to normal levels. There are however other news impacting the demand of handsets: It has already become a standard that passengers can freely use mobile phones on airplanes. Now there has been a suspicious case regarding an airplane crash in southern China. The plane had crashed immediately after taking off, but luckily the amount of casualties was rather limited. Some of the survivors said that they had seen a mobile handset exploding while a passenger was using it intensely for video-conferencing. This event was widely published all over the world and it has tamed the markets for new handsets. In the USA the demand for handsets is expected to decrease by about 3% and in Asia by about 7%. European demand is expected to remain unchanged.
Costs: Transportation costs diminish by approximately 6% as the price of oil takes corrective downward action. Production costs are expected to remain constant. Outsourcing capacity continues to rise: expected capacity is 13% in USA and 19% in China. As a result, outsourcing costs have fallen 4-6%.
Finance: Once again the corporate tax-rate in Asia is raised. It is now up to 22%. Concerns about the competitiveness of the Chinese economy results in the Central Bank of China selling a large amount of Rmb into the FX market. Consequently Rmb falls nearly 10% against USD. The Euro rebounds. Interest rates are up half a percentage point in China, and up a quarter in the USA. European interest rates are down a quarter.
Social responsibility: Mounting public pressure and media interest has led most suppliers to try and improve their social responsibility processes and standards. However, this has had a minimal affect on consumers as many view the changes as nothing more than a PR stunt.

Leave a Reply

Your email address will not be published. Required fields are marked *