(4) Case Study 140 POINTS BA Premium Toys (BAPT) at the Crossroads Background You work as an Investment and Business Analyst for BA Premium Toys (BAPT). BAPT has its Headquarter (HQ) at Providence, Rhode Island, USA. You have been reporting to its country manager, Mr. Tom Smith, an American, at the subsidinry in Zhongshan, Guangdong Province. Mr. Smith has been country manager since 2008 overseeing the manufacturing of premium quality toys (for children in the age group of 5 to 7 years old). The products are mainly for export to the US market. Prices of toys for the 5-7 age group in the US range from cheapest products, selling for US$2.5 to US$7.5. Average at US$12.5 to US$35 and Premium from US$38 to as high as US$250. The manufacturing industry in Zhongshan has been experiencing challenges in the past five years due to increase wages and the appreciation trend of the Renminbi (RMB) relative to the US dollar (USD). The challenges have been made more serious recently due to the uncertainty caused by Trump's recent trade policies toward China. In fact, profits of most labor-intensive manufacturing companies (in Garments and basic goods, for example) in Guangdong province have been declining in the past five years, due to increasing costs, and competition from other cheaper locations in Asia for labor-intensive manufacturing industries. Mr. Smith has been thinking of various future options for the subsidiary of BAPT such as Option A (Continue manufacturing in China), Option B (Move manufacturing to Mexico), Option C(Move manufacturing to Vietnam), and Option D (Return manufacturing to the USA). You are required to: (4.1) Answer general questions related to the case and topics which you have studied in MGMT3000 [10 points); (4.2) Prepare an initial report for Mr. Smith based on the information from the Table [20 points); and (4.3) What other additional information (give five) will you want to collect to make your second report more meaningful and complete for Mr. Smith to make a more informed decision. Give one reason for each additional information you are suggesting for the second report (10 points) 4 4.1 General Questions related to the case and topics you have studied for this fiel am 10 points a Market-secking. Effective in Interation ceking and Resources-seeking b Efficiency seeking. Ta redaction seeking. Make-secking and Internation-seeking Strategic act socking Resources seeking. Ency seeking and Marketing d Resources-seeking. Effectiveness-secking, Efficiency seeking Internalisation socking 294 Global Business Environment (MGMT3000), Final fram, 14 Semester, 52020-2021 1. What are the four common reasons for firme to seek foreign locations for FDA 2 What was the main FDI seeking reason for BAPT to invest a widiary in China in 2008? a International-seeking FDI b. Efficiency seeking FDI 6. Market-seeking FDI d. Effectiveness-secking FDI Which of these management intoes is most relevant 10 Mr. Smith's decision for the BAPT Case? a. Following rivals b. Production costs 4. Following business) clients d. Customer knowledge 4 Ir Mr. Smith choose Option D (Return manufacturing of toys to the USA), what do you call this phenomenon? Outsourcing b. "Re-shoring . Explanation of Internalization theory d. Explanation of the Product Life Cycle theory 5. Which one of the following reasons could be used by the USA to justily a proposed trade barrier for toys? Show evidence that a particular toy can be used as a Dual Use good by a foreign government b. Claim that toys are receiving "unfair" subsidies from investors c. Argue that toys made by a foreign country are destroying the US's national identity d. Claim that toys are part of the Infant Industries that the US government needs to protect 4.2 Initial Report for Mr. Smith based on the information from the Table 120 POINTSI Prepare a report for your boss, Mr. Smith. Your initial report must specify which one of the following four options is best for BAPT: Option A: Continue manufacturing in China. Option B: Move manufacturing and final assembly from China to Mexico Option Move manufacturing and final assembly from China to Vietnam. Option D. Transfer all the manufacturing from China to the USA. Given the information in the table below, write an initial report to Mr. Smith, giving reasons for your preferred option, IMPORTANT NOTE: The context of the case is before the Cevid-19 period). 5 Global Business Environment (MGMT30001, Final Exam, 14 Semester, 52020 2021 USA China Mexico 11) Population (le 125 1,386 129 Millions) Vietnam 98 [2] Gross National Income, Per Capita, PPP (2017) US$6.200 U8516,760 US$17,840 US$7,030 [3] FOREX Rates RM 7.25/1USD RMB (China) Jan 2008) MXN (Medico) RMB 6.90USD VND (Vietnam) Can 2018) (4 Corporate Tax 27% (from 40% in 25 (from 335.in rate in 2018 2017) 2007) [5] Global 1"out of 140 2 out of 140 Competitiveness countries countries Index 2018 To Labour Market out of 140 69 out of 140 (score: 81.9 10 countries (81.9) countries (593) 37.6) MXNI0.92/1USD VND15,975V1USD Can 2008) Can 2008) MXN1931/1USD VND222361USD Jan 2018) Can 2013 30% 20% (from 25% in 2013 46-out of 140 Tout of 140 countries countries 100 out of 140 countries (544) 90 out of 1.40 countries (55.6) 89 [7] Rule of Law 54 (100-best) Sources: [1] World Bank Database for Population and [2] World Bank Database for Gross National Income http://data.worldbank.orgdata/views reportsreport Repame County Profile&d-b4 Sofas 7&tb inferen&country CHN 13 Yahoo Finances francese.com (4) KPMG; https:/homep.com home servietter toolsandstrates incorporate-taxes tablet:15) The Global Competitiveness Report 2018: bittps://www.forum.org reports the globale competitvenes-sa-2018:[6] The Labour Market of the Global Competitiveness Report 2018, The Labour Market is one of the Pillars to compute the overall Global Competitiveness Report. The Labour Market ranking is based on such factors like, hiring and firing practices Cooperation in labour-employer relations, flexibility in wage determination workers' rights, Ease of hiring foreign labour, pay and productivity, female participation in labour force, and labour tax rates. Also taken from https://www.forum.org reports the global competitveness-report-2018, 17] Rule of Law "Reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Source: World Governance Indicators, World Bank, http://info.wedhank.org/sovemance'wishome 4.3 Additional information for your second report to Mr. Smith. What other additional information will you want to collect to make your second report more meaningful and complete for Mr. Smith to make a better informed decision on the options available for BAPT. Give one reason for each additional information (give five only) you are suggesting for the second report to Mr. Smith. [10 POINTS (4) Case Study 140 POINTS BA Premium Toys (BAPT) at the Crossroads Background You work as an Investment and Business Analyst for BA Premium Toys (BAPT). BAPT has its Headquarter (HQ) at Providence, Rhode Island, USA. You have been reporting to its country manager, Mr. Tom Smith, an American, at the subsidinry in Zhongshan, Guangdong Province. Mr. Smith has been country manager since 2008 overseeing the manufacturing of premium quality toys (for children in the age group of 5 to 7 years old). The products are mainly for export to the US market. Prices of toys for the 5-7 age group in the US range from cheapest products, selling for US$2.5 to US$7.5. Average at US$12.5 to US$35 and Premium from US$38 to as high as US$250. The manufacturing industry in Zhongshan has been experiencing challenges in the past five years due to increase wages and the appreciation trend of the Renminbi (RMB) relative to the US dollar (USD). The challenges have been made more serious recently due to the uncertainty caused by Trump's recent trade policies toward China. In fact, profits of most labor-intensive manufacturing companies (in Garments and basic goods, for example) in Guangdong province have been declining in the past five years, due to increasing costs, and competition from other cheaper locations in Asia for labor-intensive manufacturing industries. Mr. Smith has been thinking of various future options for the subsidiary of BAPT such as Option A (Continue manufacturing in China), Option B (Move manufacturing to Mexico), Option C(Move manufacturing to Vietnam), and Option D (Return manufacturing to the USA). You are required to: (4.1) Answer general questions related to the case and topics which you have studied in MGMT3000 [10 points); (4.2) Prepare an initial report for Mr. Smith based on the information from the Table [20 points); and (4.3) What other additional information (give five) will you want to collect to make your second report more meaningful and complete for Mr. Smith to make a more informed decision. Give one reason for each additional information you are suggesting for the second report (10 points) 4 4.1 General Questions related to the case and topics you have studied for this fiel am 10 points a Market-secking. Effective in Interation ceking and Resources-seeking b Efficiency seeking. Ta redaction seeking. Make-secking and Internation-seeking Strategic act socking Resources seeking. Ency seeking and Marketing d Resources-seeking. Effectiveness-secking, Efficiency seeking Internalisation socking 294 Global Business Environment (MGMT3000), Final fram, 14 Semester, 52020-2021 1. What are the four common reasons for firme to seek foreign locations for FDA 2 What was the main FDI seeking reason for BAPT to invest a widiary in China in 2008? a International-seeking FDI b. Efficiency seeking FDI 6. Market-seeking FDI d. Effectiveness-secking FDI Which of these management intoes is most relevant 10 Mr. Smith's decision for the BAPT Case? a. Following rivals b. Production costs 4. Following business) clients d. Customer knowledge 4 Ir Mr. Smith choose Option D (Return manufacturing of toys to the USA), what do you call this phenomenon? Outsourcing b. "Re-shoring . Explanation of Internalization theory d. Explanation of the Product Life Cycle theory 5. Which one of the following reasons could be used by the USA to justily a proposed trade barrier for toys? Show evidence that a particular toy can be used as a Dual Use good by a foreign government b. Claim that toys are receiving "unfair" subsidies from investors c. Argue that toys made by a foreign country are destroying the US's national identity d. Claim that toys are part of the Infant Industries that the US government needs to protect 4.2 Initial Report for Mr. Smith based on the information from the Table 120 POINTSI Prepare a report for your boss, Mr. Smith. Your initial report must specify which one of the following four options is best for BAPT: Option A: Continue manufacturing in China. Option B: Move manufacturing and final assembly from China to Mexico Option Move manufacturing and final assembly from China to Vietnam. Option D. Transfer all the manufacturing from China to the USA. Given the information in the table below, write an initial report to Mr. Smith, giving reasons for your preferred option, IMPORTANT NOTE: The context of the case is before the Cevid-19 period). 5 Global Business Environment (MGMT30001, Final Exam, 14 Semester, 52020 2021 USA China Mexico 11) Population (le 125 1,386 129 Millions) Vietnam 98 [2] Gross National Income, Per Capita, PPP (2017) US$6.200 U8516,760 US$17,840 US$7,030 [3] FOREX Rates RM 7.25/1USD RMB (China) Jan 2008) MXN (Medico) RMB 6.90USD VND (Vietnam) Can 2018) (4 Corporate Tax 27% (from 40% in 25 (from 335.in rate in 2018 2017) 2007) [5] Global 1"out of 140 2 out of 140 Competitiveness countries countries Index 2018 To Labour Market out of 140 69 out of 140 (score: 81.9 10 countries (81.9) countries (593) 37.6) MXNI0.92/1USD VND15,975V1USD Can 2008) Can 2008) MXN1931/1USD VND222361USD Jan 2018) Can 2013 30% 20% (from 25% in 2013 46-out of 140 Tout of 140 countries countries 100 out of 140 countries (544) 90 out of 1.40 countries (55.6) 89 [7] Rule of Law 54 (100-best) Sources: [1] World Bank Database for Population and [2] World Bank Database for Gross National Income http://data.worldbank.orgdata/views reportsreport Repame County Profile&d-b4 Sofas 7&tb inferen&country CHN 13 Yahoo Finances francese.com (4) KPMG; https:/homep.com home servietter toolsandstrates incorporate-taxes tablet:15) The Global Competitiveness Report 2018: bittps://www.forum.org reports the globale competitvenes-sa-2018:[6] The Labour Market of the Global Competitiveness Report 2018, The Labour Market is one of the Pillars to compute the overall Global Competitiveness Report. The Labour Market ranking is based on such factors like, hiring and firing practices Cooperation in labour-employer relations, flexibility in wage determination workers' rights, Ease of hiring foreign labour, pay and productivity, female participation in labour force, and labour tax rates. Also taken from https://www.forum.org reports the global competitveness-report-2018, 17] Rule of Law "Reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Source: World Governance Indicators, World Bank, http://info.wedhank.org/sovemance'wishome 4.3 Additional information for your second report to Mr. Smith. What other additional information will you want to collect to make your second report more meaningful and complete for Mr. Smith to make a better informed decision on the options available for BAPT. Give one reason for each additional information (give five only) you are suggesting for the second report to Mr. Smith. [10 POINTS