exam 2

Short Answer #1: If you recall the information from the Homer Industries case, both Homer and Nilhaus will be developing an Advertising Strategy to introduce  The BartoQ21  as a competitive response to the Apple Watch Hermes (https://www.apple.com/apple-watch-hermes/) 

Please develop the main ideas behind ONE particular Commercial Ad that Nilhaus can use in the campaign to successfully compete against the Apple Watch Hermes. [note please watch the video where I explain the difference between the Essay and the short-answer as a Commercial Ad shall never be considered a strategy]

Short Answer #2: Given the information provided about the 3 vaccines (Moderna, Pfizer, and JNJ), what can be the potential competitive moves to suggest JNJ(Johnson and Johnson) executives to become the largest supplier of Covid-19 vaccines in poor countries?

For the 2 short answers , I expect good organization and good use of the course materials to answer the question. Good answers  (per each question) can fit between 6 to 10 lines. However, if you go over 5 lines and avoid starting a Second Paragraph - I will penalize for lack of organization.

As a complement to Chapter 6 - I am placing the story about the Johnson and Johnson Covid-19 vaccine that may hit the market later in the year and only requires 1 shot rather than the 2 shots from the existing providers (Moderna and Pfizer).

https://www.statnews.com/2021/02/02/comparing-the-covid-19-vaccines-developed-by-pfizer-moderna-and-johnson-johnson/

https://apnews.com/article/fda-j-and-j-vaccine-shot-prevent-covid-6928a9a08526d036a9f8197149c80f06

Given the information provided in the case, the opportunities and threats, and the reading of the article: "are you sure you have a strategy?", please do the following

A) Propose a strategy that Homer Industries need to use for successfully introducing the BartoQ20 in the European market

B) Propose an implementation plan for the proposed strategy - you cant use the 5 elements of strategy to frame your implementation.

· Remember: Blackboard does not allow using the mouse for paste - need to use the keyboard:  control - V

· My recommendation is that you can work ahead of opening the repository and only enter to paste your answer.

· Good answers for this question tends to fit in 1 page (single space with at least 6-7 short paragraphs)

Hint:

· Notice that (A) implies a short description of the strategy - no more than 3 lines and (B) implies that you need to create sub-headers to properly identify each one of the 5 elements of strategy.

· For Part B: If you do not use the 5 elements of Strategy - you must provide a good implementation stage with a particular timeline; you are NOT allowed to Google for potential answers as both the Textbook and the Article: Are you sure you have a strategy? provides a lot of elements to craft your answer

How the question will be graded?

· Strategy proposed: 10 points

· Implementation Stage or Use of 5 elements: 10 points

Homer Industries Case

Homer and the Introduction of the BartoQ21

 Homer Industries, a small family-owned company, plans to introduce its new line of Digital Watches. The company has invested several millions of US$ in Research and Development over the last 3 years to develop its most recent product, The BartoQ21.

 Mr. Smithers, the company CEO, has asked you for guidance in lieu of the manufacturing options available at this time and the distribution agreement that he signed 2 days ago for conducting a test market in Christmas 2020 before a full market release is done worldwide  by Summer 2021.

At this time, given the uncertainty and turbulence from the Covid-19 pandemic, Homer Industries has not reached a decision about where to manufacture the product; however, the test market is set in particular European cities, and also, there is a need for some guidance on how to compete in the rest of the European Union region in 2021.

The following information is available.

Manufacturing options

A) Juarez Mexico.  The Beechos SA de CV can manufacture up to 50,000 units per year.

· Its proposal involves charging MXN 5,130 per manufactured unit plus an initial set-up cost of MXN 990,000.

· This set-up cost is payable immediately and Homer needs to incur in this cost regardless of the number of units that the plant will produce. 

· Then, Homer needs to pay US$20 per unit for shipping, packaging, and handling to get the product from Juarez to Europe.   

(Note: MXN refers to Mexican Pesos, the exchange rate between US dollars and Mexican pesos is  US$1= MXN 18, assume no changes in the exchange rate throughout the entire  2020-2021)

 B) Dublin, Ireland.  The McClausky PLC can manufacture up to 75,000 units per year.

· The company charges  € 252 per manufactured unit plus an initial set-up cost of € 90,000.

· Similar to Beechos, the set-up cost is payable immediately and it is not related to the number of units that the plant produces this year or next year.

· In addition, Homer needs to pay about € 9 per unit in shipping, packaging, and handling to have the product ready for distribution throughout the major Western European city stores  by October 27 (no delivery possible before this day because the company has a backlog of orders due to the Covid-19 pandemic).

· The shipping and handling includes ground and freight transportation.

· There are no other costs.

(Note:  € refers to Euros, the exchange rate between US dollars and Euros is US$1 =  €0.90, assume no changes in the exchange rate throughout the entire 2020-2021)

Notice that costs and delivery dates cannot be changed.

Distribution Agreement 

Homer’s management team has negotiated an exclusive agreement with Nilhaus PLC to use its online stores for launching the product. Homer Industries has estimated $2 million to cover for some administrative fixed costs relate to this particular test market

A promotion involves selling the BartoQ20 at an introductory retail price of US$ 450 (before Value Added Taxes). 

Homer will sell each BartoQ20 to Nilhaus at a wholesale price of US$ 360

Nilhaus will be responsible for receiving and delivering the products to all the stores, and selling the watch to all the interested customers.

In addition, Homer will pay US$ 1,000,000 for its 50% share in an advertising campaign. Also, the agreement between Homer and Nilhaus implies the following:

· Homer needs to deliver 40,000 units by October 10 so Nilhaus can stock its stores in Paris, Amsterdam, and Madrid.

· Homer needs to deliver a second shipment of 60,000 by November 15 to stock the other stores across the Euro zone.

Strategic Positioning

Given the potential test market, Mr. Smithers is also needing some strategic advice to compete in the European market head to head with the Apple Watch Hermes (https://www.apple.com/apple-watch-hermes/) 

Although the Hermes version is selling for about $1,400, Homer Industries believes the European Union offers several opportunities such as:

· Emerging connectivity and affordable Data plans for Mobile Devices

· Changing business models toward e-commerce and home delivery

· Desirability for affordable devices at reasonable prices

· Increasing demand for American-designed electronics

· Dissatisfaction with upscale designers

However, Mr. Smithers has also recognized the following threats:

· The recent developments of Covid-19

· The increasing nationalism in European consumers

· The enactment of legislation that can make users to pay for accessing content over the internet

· The entry of Chinese and South East Asian competitors in the European market

In that manner, Mr. Smithers believes the BartoQ20 can take out a portion of Apple's market share in digital watches, at least in the European Union market.

Remember to review again the materials concerning the 5 elements of strategy: The 5 elements of strategy.pdf

 

A simplified version of the 5-elements of strategy can be found here: https://saylordotorg.github.io/text_international-business/s14-04-the-five-elements-of-strategy.html

I also provide this additional information about the meaning of developing a strategy: What can be the meaning of a strategy.pdf