Use the following images attached to answer the following questions:

1. Based on all the setbacks in the alcohol supply chain, whose fault is it for all the events leading to the 1,200 case shortage of Wu's Brew? Provide at least two or three reasons.

2. Kenneth Wu had chosen JH Distributors to partner with in hopes of bringing a very popular product to the United States. Based on all the risks mentioned in the case article. would you have done the same? Identify at least two or three reasons.
 
 
 
 

Transcribed Image Text:

One hot afternoon, Kenneth Wú sat on the narrow steps of his apartment complex in Hong Kong, enjoying his latest creation: an alcoholic beverage he made from his own kitchen. The drink tasted so good that he preferred to drink it instead of store-bought beer. When Wú paid a visit to friends in Tai-Koo Sing, they ridiculed him for making his own alcohol, but eventually they tried it out of sheer curiosity. To Wu's surprise, his friends unanimously agreed that his beverage would be worth paying money for. That evening, they developed an entrepreneurial spirit, and by the end of the night. Wu was convinced that his concoction could generate a substantial amount of revenue. Later that week, despite Wu's aversion to taking the risks required of an entrepreneur, he decided to manufacture and sell his beverage. Wu and his friends began by going to different liquor stores in the Hong Kong region to offer samples. The liquor store owners fell in love with his beverage, and soon Wú had his own drink on shelves around the region. He named the drink "Wu's Brew." After a year of steady sales and considerable profit, Wú decided to expand his sales to other countries in East Asia. Based on the advice and esteem he had received from many of these small liquor store owners, he decided to start a partnership with a few of his close friends to sell the product and market what they believed to be the "next big thing" to hit the bars and shelves around the world. His company was named Wu's Brew Works. Wu wisely acknowledges that he and his friends will never be able to meet global demand if they continue to manufacture the product from their homes. By relying on the relationships he developed with store owners and their networks, Wú expands his manufacturing operations. Sure enough, Wu's drink becomes the most popular item to hit the market in Hong Kong and countries such as Taiwan and the Philippines. Within a year, the beverage begins receiving global attention throughout East Asia. People and tourists from China, Japan, Vietnam, Malaysia, and other East Asian countries start requesting his beverage when visiting Hong Kong. Eventually, people throughout the world-including Australia, Europe, and even the United States-become interested. Wú begins to envision his product being sold globally. After securing financial commitments from various Hong Kong investors, Wú and his partners rent out the 65th floor of Cen- tral Plaza in Wanchai North of the Hong Kong Island region of Hong Kong to locate company operations and the official Wu's Brew Works headquarters. However, he chooses to locate the manufacturing plant in Yenda. Australia, as it provides more convenient distribution access. Wu's Brew Works Manufacturing Plant Yenda, Australia, is a little town located about 560 km west of Sydney in the New South Wales region of Australia. It is the location where Yellow Tail wine is manufactured and pro- duced. Yenda is a multicultural place where vineyards and rice paddies thrive. It is located at the edge of Cocoparra National Park-a place of spectacular gorges, waterfalls, walking loca- tions in lookouts, and home to more than one hundred species of birds. Wú and Co. decide to have the manufacturing plant in Yenda because of its open land and large capacity for a plant. Wú decides to target the United States in its business plan to begin global growth; the United States will be the first area outside East Asia to sell Wa's Brew. Wú sought the U.S. market to fulfill his ambition of spreading his product globally because of the large growth potential for alcohol in the United States. However, alcohol is a highly regulated product in the United States, and all alcoholic imports coming into the United States have to follow a three-tier system of alcohol distribution. The Three-Tier System The three-tier system is the system for distributing alcoholic beverages in the United States that was federally mandated after the repeal of the Prohibition in 1933. The three tiers in this One hot afternoon, Kenneth Wú sat on the narrow steps of his apartment complex in Hong Kong, enjoying his latest creation: an alcoholic beverage he made from his own kitchen. The drink tasted so good that he preferred to drink it instead of store-bought beer. When Wú paid a visit to friends in Tai-Koo Sing, they ridiculed him for making his own alcohol, but eventually they tried it out of sheer curiosity. To Wu's surprise, his friends unanimously agreed that his beverage would be worth paying money for. That evening, they developed an entrepreneurial spirit, and by the end of the night. Wu was convinced that his concoction could generate a substantial amount of revenue. Later that week, despite Wu's aversion to taking the risks required of an entrepreneur, he decided to manufacture and sell his beverage. Wu and his friends began by going to different liquor stores in the Hong Kong region to offer samples. The liquor store owners fell in love with his beverage, and soon Wú had his own drink on shelves around the region. He named the drink "Wu's Brew." After a year of steady sales and considerable profit, Wú decided to expand his sales to other countries in East Asia. Based on the advice and esteem he had received from many of these small liquor store owners, he decided to start a partnership with a few of his close friends to sell the product and market what they believed to be the "next big thing" to hit the bars and shelves around the world. His company was named Wu's Brew Works. Wu wisely acknowledges that he and his friends will never be able to meet global demand if they continue to manufacture the product from their homes. By relying on the relationships he developed with store owners and their networks, Wú expands his manufacturing operations. Sure enough, Wu's drink becomes the most popular item to hit the market in Hong Kong and countries such as Taiwan and the Philippines. Within a year, the beverage begins receiving global attention throughout East Asia. People and tourists from China, Japan, Vietnam, Malaysia, and other East Asian countries start requesting his beverage when visiting Hong Kong. Eventually, people throughout the world-including Australia, Europe, and even the United States-become interested. Wú begins to envision his product being sold globally. After securing financial commitments from various Hong Kong investors, Wú and his partners rent out the 65th floor of Cen- tral Plaza in Wanchai North of the Hong Kong Island region of Hong Kong to locate company operations and the official Wu's Brew Works headquarters. However, he chooses to locate the manufacturing plant in Yenda. Australia, as it provides more convenient distribution access. Wu's Brew Works Manufacturing Plant Yenda, Australia, is a little town located about 560 km west of Sydney in the New South Wales region of Australia. It is the location where Yellow Tail wine is manufactured and pro- duced. Yenda is a multicultural place where vineyards and rice paddies thrive. It is located at the edge of Cocoparra National Park-a place of spectacular gorges, waterfalls, walking loca- tions in lookouts, and home to more than one hundred species of birds. Wú and Co. decide to have the manufacturing plant in Yenda because of its open land and large capacity for a plant. Wú decides to target the United States in its business plan to begin global growth; the United States will be the first area outside East Asia to sell Wa's Brew. Wú sought the U.S. market to fulfill his ambition of spreading his product globally because of the large growth potential for alcohol in the United States. However, alcohol is a highly regulated product in the United States, and all alcoholic imports coming into the United States have to follow a three-tier system of alcohol distribution. The Three-Tier System The three-tier system is the system for distributing alcoholic beverages in the United States that was federally mandated after the repeal of the Prohibition in 1933. The three tiers in this