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MERBATTY CASE STUDY

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Ivy Escarpe

on 15 October 2014

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Transcript of MERBATTY CASE STUDY

MERBATTY CASE ANalysis
MERBatty Case analysis
Business Policy
Wed/Sat ; 7:30 - 9:00
Milleran Frouh L. Ochea, CPA
designed by Péter Puklus for Prezi
LATE TIME DELIVERY OF HULL FROM TOPCREST
Alternatives:
ACCEPT COMPENSATION OFFERED
REJECT AND LOOK FOR NEW SUPPLIER
New Design Supplier for Surania
Sales Staff
Alternatives:
To continue the contract with the Sales Agent
To hire Full Time Staffs
JKL Issues
Problem
Simone is concerned that Alberto views Merbatty as his own property to do with as he wishes.
Charitable donations which cost 5 man-years of time.
Accident at Work
Key points to consider:

Use of drugs: Paulo use of drugs is serious ethical issue for the company for it could establish a negative image for the company
Familiarity Threat: Paulo and Jesper, the son of the CEO, are friends. This relationship may be used as a ground that Jesper's judgment towards the use of drugs by Paulo may have been compromised.
Introduction

choosing Cooper Design
Advantages:
Globally Competitive
Well-Established company
Great reputation
Recognized Internationally
Traditional and Modern Design
Provide Extranet Service
Disadvantages:
E100K bespoke fee for a typical mid-sized boat
E200 miles from the new boat building facility
Choosing Arabian Design
Advantages:
Suranian based design business
Renowned Internationally
Located near at the new boat building facility
Finance by a wealthy and well connected Shiek
Limitless funds
Employees are well educated and fully trained of CAD
E90K bespoke fee for every boat
Disadvantage:
No customer interaction
Newly formed
Alternatives:
Cooper Designs
Arabian Interiors
Recommendation
Merbatty should invest in Cooper Design. It has a good reputation, it’s been in the industry for a longer period of time, it is operating globally, it In lines with Merbatty’s goal/strategy of live up to “what customer wants, the customer get”, and it is recognized internationally.
Stefan Gil Points:
With agents, they work hard or they don’t get paid.
“ If it is not broken don’t fix it.”
Growth achieved over the years despite the recession going on Europe.
Not to turn friends to enemies.
Great contacts in the industry.
They are link to the end customer.
Majority of sales are secured by the sales agents.
Existing sales agent in Surania who will continue to generate sales through his established reputation and contacts.
In areas of molding their skills, it is less costly.
More production.
Familiarity with the area.
A highly experienced, more aggressive sales force.
Advantages:
Double agency of few sales agent of Merbatty.
Commission is costly.
Self-interest.
Disadvantages:
Marie Lopp Points:
Widen the distribution of sales of the majority of boats.
Organized and reliable employees.
We are in modern world, growth is a need for the company so change is a must.
More organized and reliable employees.
Accommodation of larger number of customers.
Sales Staff is vested with Merbatty, and is loyal to the cause.
Valuable resource to the sales professionals for advice on sales techniques and ways to overcome customer challenges.
Advantages:
Costly.
Disadvantages:
Recommendation
Put up a joint force of Sales Staff and Sales Agent to administer internal and external prospect sales, respectively,in Surania boat building facility.
Background
Alberto Blanc strongly believes in the principle of charity. Every employee is encouraged to spend two to six months seconded from Merbatty, on full pay, to undertake charity work. Merbatty receives significant publicity from Alberto’s charitable work.
Racing Boat
Recommendation:

To prevent further damage to the company's image, we recommend suspending Paulo for the meantime and be subjected under observation and if deemed necessary, be provided with professional help. Furthermore, Merbatty should also strengthen their internal control and management by any means necessary.
Alberto Blanc as the first CEO
Two boat building facilities located in Europe and USA
Wider Scope of product types
Global Expansion on Sales
Investment on a new facility
Philanthropic acts garnered publicity
33 years of trading
swot analysis
Strenghts
A strong brand name
Superior technology
Good investment in research and development
Stable growth of sales
Thorough inspection of product before delivery
Openness to expanding business to interior design
Diversified

Weaknesses
High staff turnover
Longtime allotted in purchasing raw materials hence idle times
Stability does not always guarantee returns
Supplies are taken from only a handful of suppliers
No investment on other company Outsourced Materials
Opportunities
New technology
Innovation
Growing market for luxury boats
Globalize operations
New product design
Enter into sailing in yachts market segments
Surania expansion in the Middle East
Customers will be given better choices through the arrival of better designs products
Advertising through charity works
Forward scenario thinking of managers
Threats
More competitors entering and competing in the luxury boat building industry
Effect of global recession in the economies of target countries
Increase in value of raw materials used in boat making
Low switching costs of current customers
Change in social trends
Quality maintenance
Porter's Five Forces
Threats of New Entrants
They knew what the customers wants since they’ve researched the current trends and they’re already using new technology.
Bargaining Power of Suppliers
There are multiple suppliers for the raw materials in boat-making, hence, the suppliers will it’s reduce prices.
Bargaining Power of Buyers
Product is important to customer
Buyers require special customization
Threats of Substitutes
High priced customized boats VS. Low priced standardized boats
Intensity of Competitive Rivalry
Sustaining competitive advantage
Rivalry with Substitutes products
Rivalry with market share
Political
Political instability in the Middle East
Legal terms and Conditions (Employment)
Socio-Cultural
Cultural differences and language barriers
Micro culture of luxury spending
Economical
Multiple Currencies (manage prices and costs)
Consistent growth in wealthy inhabitants
Technological
CAD
Technological Developments
PEST Analysis
Presented by Good Riddance CF:

Elena Bandojo
Anas Aloyodan
Abdul Mojiv Cuaro
Farezza Balangue
Ivy Escarpe

Investing Advantages:
Increase of sales
Brand awareness
Makes the company more competitive globally
Cash expand worldwide
More investors might invest in the company
Investing Disadvantages
Reputation of the company is at risk
Costly, specifically the building of the boat
Expenditures increase
20 units of P-3000 needed to be sold within two years
Recommendation:
Issues to be addressed
New design supplier for SURANIA
Accident at work
Racing Boat
Sales Staff vs. Sales Agents
JKL Concerns
Late delivery of a hull from TOPCREST
Prioritization of Issues
Late delivery of a hull from Topcrest
New design supplier for Surania
Sales Staff VS. Sales Agents
JKL Concerns
Racing Boat
Accident at Work
ACCEPT COMPENSATION OFFERED
ADVANTAGES
Reasonable compensation
Ex-gratia of €30000
DISADVANTAGES
Same situation might occur in the near future
Merbatty has to pay a discount to its customers amounting to €25000
REJECT AND LOOK FOR NEW SUPPLIER
Computations:
Advantages
Willing to supply the hull at short notice
Disadvantages
No assurance of on-time delivery
Cost an extra €50K and
Cannot be delivered until 15 January 2014
Computation:
Recommendation:
Continue with Topcrest since Merbatty and Topcrest have already a mutual relationship and it offered a reasonable financial compensation
Action Plan:
Let the Topcrest sign a contract whereby to assure Merbatty that there will be no delay of supplies in the future.
However, Merbatty Corp. should not rely to Topcrest alone in supplying hull parts. We suggest that Merbatty Corp. should look for another supplier that is also reliable for in case of this incident to happen again, the company has an alternative supplier of hull parts.
Don't invest in the competition for a higher percentage of risk is involved, foremost, they are the principal sponsor of the event for 5 years
Continue to sponsor the competition
Empower advertising esp. the Suranian branch
Thank you!

ETHICAL ISSUES
Charity
Duty of care towards JKL
Professional Behavior
Background:
Simone was supposed to be visiting the financial director, Andreas, but due to a diary mix up found he was not on the premises when she arrived. Andreas was out on one of his many charitable visits.
Background:
The company made donations totaling €0.5m towards a European Child Poverty Prevention Charity.
Recommendations:
Board members should collectively appoint a person on board who would be responsible for maintaining Merbatty’s relationship with JKL and communicate all matters of concern.
Specify the exact number of work-hours that an employee can devote for charity work.
Factors to be consider in Deciding what company should carry out the design work:
- Company’s reputation
- Competitiveness
- Market Experience
- Interior design
- Price
Full transcript