$3$ Umame Inc $1-$ INDIVIDUAL Case Analysis Template

BUSM$35436$ Business Cases

Umame Inc. $1$ Individual Case Analysis Template

Student Name: Student ID: Due Date: Class #:

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Case Synopsis: In this multimedia case, Kathy MacGillvray, President of Halifax, Canada based, pregnancy clothing manufacturer, Umame comes to the realization that currency risk is an issue for her company. Her company produces goods in U$.$S$.$ dollars. Fluctuations in currency can really impact her firm's bottom line. The challenge is what to do about it$.$

Decision Maker: Kathy MacGillvray, President, Umame Inc.

Problem Statement: Umame Inc. contracts with foreign suppliers to produce their fashions using US dollars as a cost base. In the current business model, Umame opens a letter of credit for each supplier contract to be released $90$ days following the contract agreement. Umame is typically paid within $90$ days of the release of the letter of credit, often resulting in up to a $6$ month gap between opening the line of credit and payment by the supplier. Fluctuations in the currency value over this period of time can have a substantial impact on the bottom line. Umame must develop a cost$/$selling strategy to minimize foreign exchange risk.

Decision Criteria$/$Goals:

Minimize foreign exchange risk.

Protect gross margins while selling to customers globally.

A$.$ Business Case Segmentation $20$ Marks

A$1$: Background segmentation $-$ considering the decision maker, problem statement and goals, segment relevant business case facts using specific headings, i$.$e$.$ Industry, Company, Financial, Marketing, Competitive, etc. Present relevant facts only, no analysis $(5$ marks$)$:

Background Segmentation:

A$2$: Why is this problem important? $(2$ marks$)$

A$3$: How urgent is the problem? $(2$ marks$)$

A$4$: What timelines must the decision maker$$s recommendations work within? $(2$ marks$)$

A$5$: Who are the key people and$/$or groups that you need to consider in solving the problem? $(2$ marks$)$

A$6$: Rank order any constraints or considerations that may limit the range of solutions i$.$e$.$ cost$,$ timeline? $(2$ marks$)$

A$7$: Identify and rank order the KEY ISSUES that must be addressed to meet the Decision Maker$$s goals. $(5$ marks$)$

B$.$ Situation Analysis $20$ Marks

Provide appropriate analyses $-$ based on the Business Case Segmentation and Key$-$Issues identified above.

You must complete the required analysis identified below plus any additional analysis that you feel is important to the case. For each completed analysis, you must provide Conclusions and Implications.

$(1)$ SWOT Analysis $$ Umame Inc.:

Analysis:

Conclusions $($Rank Order$)$:

Implications $($Rank Order$)$:

$(2)$ Currency Fluctuation Analysis $$ Canada, US$,$ China, Bangladesh:

Analysis:

Conclusions $($Rank Order$)$:

Implications $($Rank Order$)$:

$(3)$ Foreign Exchange Risk Strategy Analysis:

Analysis:

Conclusions $($Rank Order$)$:

Implications $($Rank Order$)$:

$(4)$ Additional Analysis:

Analysis:

Conclusions $($Rank Order$)$:

Implications $($Rank Order$)$:

C$.$ Alternative Solutions:

Four alternatives are presented in the video case. Based on your case analysis, you may add additional alternatives if desired.

Produce and sell using US currency only.

Produce and sell using the currency where production is made.

Produce and sell using Canadian dollars only.

Find factories that are compliant to Umame Inc. customer$$s requirements at lower costs.

D$.$ Alternative Analysis $20$ Marks

Provide at least $3$ PROS, $3$ CONS, the MOST LIKELY OUTCOME and RATING for each Alternative. $($Pros$/$Cons $-10$ marks, Most Likely Outcomes $-8$ marks, Rating $2$ marks$)$

Alternative $1$: Produce and sell using US currency only.

Pros:

Cons:

Most likely outcome:

On a scale of $1$ to $10,$ how likely is this alternative to meet the stated Case Solution Goals?

Alternative $2$: Produce and sell using the currency where production is made.

Pros:

Cons:

Most likely outcome:

On a scale of $1$ to $10,$ how likely is this alternative to meet the stated Case Solution Goals?

Alternative $3$: Produce and sell using Canadian dollars only.

Pros:

Cons:

Most likely outcome:

On a scale of $1$ to $10,$ how likely is this alternative to meet the stated Case Solution Goals?

Alternative $4$: Find factories that are compliant to Umame Inc. customer$$s requirements at lower costs.

Pros:

Cons:

Most likely outcome:

On a scale of $1$ to $10,$ how likely is this alternative to meet the stated Case Solution Goals?

Alternative $5($restate alternative$)$:

Pros:

Cons:

Most likely outcome:

On a scale of $1$ to $10,$ how likely is this alternative to meet the stated Case Solution Goals?

E$.$ Recommendatio