Case Solution Renault’s Logan Car: Managing Customs and Duties for a Global Production: Amanda Silverman, Prof. Hau Lee (Case: GS-62 Date: 04/29/08) Stanford Graduate School of Business) Topics: International Value Chain, Foreign Trade Related Risks & Trade Barriers Internationalised Value Chain of Renault Logan Pitesti ROMANIA €489 Million Investment in Production site for Renault Logan CKD Parts CKD-parts Decree 166: 0% duty rate for ~90% of parts Moscow, Russia investment of €230 for assembly plant Duty Free CBUs 0% duty rate resulting from free trade agreements By 2006 20,000 Logans exported Ukraine (free trade agreement) Export Morocco 54% stake in Assembly Plant SOMACA: €30 million invested, CAPACITY: 30, 000 …show more content…
This allowed the assembly to be centralized in Romania. However this method was not always an advantage for some target markets such as India where duties could be up to 100% of sale price. In order to save cost another option could be used. CKDs (completely knocked down units) could be shipped to another country for final assembly. Hence, 1 Renault seeks to order CKD-parts from various suppliers, acquire them at a competitive price and in enhanced quality; therefore CKDs were not only ordered form the mother site in Romania but also from local plants. Domestic vendors or other regional sites were also taken into consideration. Sourcing parts from the mother site in Romania could come with a 0% duty however outbound logistics could eat into theses saving. Purchasing parts from local suppliers than using CKD parts would also depends on the competiveness of the supplier in each country. A volume increase correlated to the increases in competiveness of local suppliers. Cost reduction in operations came about due to Renault’s usage of segments of the B-platform, which was also used for the Nissan Micra and Renault Modus. Depending on the end market, Renault would use either its own name or the brand name Dacia. Foreign Trade Related Risks Inflation and foreign exchange related risks are very dominating risk factors which are closely watched and analysed. Here the inflation rate of the local currency and also the exchange
ASC 320-10-35-33F: “Changes in the quality of the credit enhancement should be considered when estimating whether a credit loss exists and the period over which the debt security is expected to recover.”
Sparkle Company is a Nigerian diamond mining company. Sparkle is a joint venture, 50 percent owned by Shine and 50 percent owned by Brighten. Both Shine and Brighten are U.S.-based companies with their functional currency being the American dollar. Sparkle Companies functional currency is that of Nigeria, being the Naira. During 2009, Sparkle had several transactions with its joint venture owners and outside parties. The details of Sparkle’s transactions are three loans, three expenditures, and one revenue stream. The loans the company took out were $1 million from Brighten, $1 million from Shine, and 300 million Naira from a local Nigerian bank. The expenditures
As for cost structures for this industry, the fixed costs are going to consist of machinery and equipment in order to produce the automobiles. These fixed costs also serve as a barrier of entry into the industry; small firms will not be able to afford the fixed costs. For the variable costs, labor, materials, and advertising are going to be the main costs (Investopedia, 2009). These costs also change according to the output produced; whether the companies cut back on production or increase in production. These costs don’t serve so much as a barrier of entry into the industry, but in order to compete in this industry, an entering firm must come up with them on an extremely large scale.
This case is talking about an executive retreat. It was introduced by John Matthews who was a executive had been selected to attend the two-and-a-half-week retreat. The retreat was more like a competition about academic and athletic. The team members should not only get know each other and cooperate with teammates but also need to compete with others. The whole participants were broken into five groups and their aim was to win the competition. There are several sessions about academic and athletic that the participants should complete. After the introduction part the case showed the experience of John. Before the group meeting John was wondering and worried about this retreat. When he was taking the first group meeting, he tried to learn
Shakespeare Inc., a private publishing company issued its F/S on March 20, 2012. There were several accruals and events that the management of Shakespeare is considering to determine if they should be recognized or disclosed in Dec 31, 2011 F/S. In my opinion, the important things to focus on subsequent events are the period they effect and if their influence is material or not, so that in conclusion, the F/S are fairly presented.
On a snowy January evening, the Midwestern Medical Group (MMG) management team held a retirement party for Judith Olsen, MMG president. During the evening, Olsen reflected back on the years she had worked for MMG with mixed feelings about her experience. Over the course of their eight-year integration
Tobias Wolff's short story, "The Rich Brother", is a parallel story to the biblical fable of Able and Cain. The biblical story of Able and Cain is that of the first story that puts man against man. Cain and Able are children of Adam and Eve, where Cain is the eldest and Able the younger of the two. In the biblical story Cain and Able end up giving gifts (sacrifices) to appease to their God. This in turn, creates tension between the two because Able's sacrifice of the lamb is much favored by God than is Cain's offering of his crops. Cain becomes outraged because he believes that Able has purposely tried to embarrass him, ultimately, leading Cain to become so enraged that he ends up murdering his only brother in cold blood. Throughout,
As Sheila Austin works out the decision to source from one of the two suppliers that have responded to her request for quotes for a new wiring harness for Autolink, she is faced with a decision to go with an international supplier in China, or from a local supplier. The initial look at the price quotes would steer towards the international source, but the underlying fees and costs associated with the international seller would make her think twice about accepting that deal. The in-depth analysis will steer her in the right decision to which supplier is the better candidate as well as how the cost per
For example to support the launch of the first Lexus built outside Japan, there have been new suppliers, built plants in communities as well as the expansion of the suppliers base already there before TMMC moved into Canada. Additionally because of the lower Canadian dollar compared to the US Dollar, Canadian plants have shown two areas of high performance, which are quality and high productivity with the third point being cost competitiveness in the corporate income tax rate.
Our issue is that we need a new vehicle because ours was wrecked and the rental car we were given to use after the wreck by the insurance company is about to expire, leaving us no mode of transportation. We are looking into buying a used vehicle from an advertisement in the local paper. We weren’t sure if the vehicle was still available so we have called the owner and inquired. We do not know who we are buying the car from but we are interested in purchasing the Volkswagen Jetta because of the advertisement in our local newspaper. Just from reading the car ad; we deem that the car fits all our needs and we need to get in touch with the owner fast in order to make sure they don’t sell it to someone else.
Harper Lee’s To Kill A Mockingbird is set in Maycomb, a fictional town in Alabama, in the 1930’s. Through its strong themes of racism and discrimination, the novel could portray a depressing view on life, but it’s outcome is the opposite. The novel shows great optimism and hope for the future through many reason, but largely centering with the perspective of the novel through a young child, Jean Louise ‘Scout’ Finch. Through her juvenility, she shows pure honesty and shows optimism through Jem and herself, their father Atticus and the well-known conviction of Tom Robinson.
Jules Kroll is planning to enter into the ratings industry. To determine whether it is a good idea and a good time for him to enter into the new business, we project the 5-year NPV for KBRA and apply SWOT analysis to KBRA. The 5-year projected NPV is $341.1 million, a positive number. It is a good time and a good idea for KBRA to enter the business. However, through our SWOT analysis, it would be difficult for KBRA to become competitive in a short time. Thus we suggest it add a credit rating division into the company to make attempts to it but not start up a
Young Professional magazine was developed for a target audience of recent college graduates who are in their first 10 years in a business/professional career. In its two years of publication the magazine has been fairly successful. Now the publisher is interested in expanding the magazine’s advertising base. Potential advertisers continually ask about the demographics and interests of subscribers to Young Professional. To collect this information the magazine has commissioned a survey to develop a profile of its subscribers. The survey results will be used to help the magazine choose articles of interest and provide advertisers with a profile of subscribers. As a new employee of the magazine, you have been
As mentioned in the introduction of the mini case, Hobby Horse Company, Inc. (HH) experienced a tough year in 2011. HH opened up a number of new stores but experienced a poor Christmas season. Christmas season is the biggest sale period for retail stores. As a result, bad Christmas sales performance played a big part of HH’s loss for year 2011. As we computed the financial ratios for HH, we can see the effects from new stores openings and poor sales performance.
It is assumed that they will be offering both French and English classes during weekday and weekend with OILT. But without a clear understanding of the new targeted market, it is difficult to estimate a sales number. In this calculation, instead of looking at the profit based on an assumed number of sales, the profitability of the OILT programs is evaluated using the same level of sales as proposed in Scenario 3 with RELE. The comparison of the profitability can reveal the different franchise fee structure and its impact on profitability.