Business online Game
Autor: PK010 • October 20, 2015 • Case Study • 449 Words (2 Pages) • 837 Views
After 20 years of practice, the game came to an end. Calzado Sport (i.e. Group C) had the most outstanding performance which clinched the top spot in the scoreboard. On contrary, Game Over (i.e. Group G)’s display was certainly the worst among all companies. The disparity between two companies is worth-thinking and can be analyzed as following.
Firstly, in terms of choice of plant location, Calzado Sport only picks Asia-Pacific as its plant location. It is because Calzado Sport notices that North America does not impose any import tariff on footwear produced in Europe-Africa, Asia-Pacific. It enables them to minimize the production costs and wasting. Particularly, the stable availability of trainable low-wage workers in Asian-Pacific plants allow the firm to have steady production to meet the demand. On the other hand, Game Over chooses to have plant in every region (i.e. 12.2% in North America, 26.8% in Europe-Africa, 48.8% in Asia-Pacific and 12.2% in Latin America). It may helps them to save some shipment cost. However, it leads to huge production cost for Game Over due to high fixed cost, exchange rate and wage in Europe-Africa region. Therefore, their profit dropped, as well as the ranking in the game.
Secondly, in terms of choosing market segment to sell, Calzado Sport decides to avoid the intense competition in private-label market but enter the branded market with 5-8% evenly distributed. The fierce competition in private-label market makes Game Over hard to control the sales amount. For instance, their bids in Year 11, 14, 16, 17, 18, 19, 20 are rejected. They waste their valuable capacity and increase the production cost in branded market as the fixed cost rises.
Moreover, Calzado Sport has taken political factors into account while Game Over has not. Considering the tariffs on pairs imported in North America is zero, Calzado Sport has closed the plant in there to save cost while Game Over still manages to keep their plant there. This contributes to the big disparity of two companies.
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