1、 Liu Chen 刘琛Team member 3: Wang Liran 王丽然Content 1 Introduction 2 Terms of reference 3 Identification and prioritization of issues 4 Discussion of issues 5 Ethical issues 6 Recommendations 7 Conclusions Appendix 1 SWOT analysis 2 PEST Analysis3 Porters Five Forces Analysis4 Mendelows Matrix5 Ansoff
2、Matrix6 Financial Performance Indicators7 Forecasted Cash Available For Investment at 31 Dec 20138 Cash FlowDifferencebetween Two Hull Suppliers9 The Breakeven Sales Volume of Racing Boat Proposal1.Introduction Established in northern Europe 33 years ago, Merbatty now is a world renowned builder of
3、luxury boats which became listed in November 2012. It has enjoyed rapid growth in sales for the last 12 years and has recently reached a global market share of around 8%.Confronted with the increasingly competitive market, Merbatty is supposed to deal with several issues which would hinder its curre
4、nt operations and the planned expansion. A number of problems and incidents need consideration and analysis in order to achieve Merbattys five-year plan. 2.Terms of ReferenceThe report is designed to prioritize, analyze and evaluate the issues facing the board of Merbatty. Detailed recommendation is
5、 made where appropriate.3.Identification and prioritization of issuesPriorityIssueStrategic W1AcceptabilityW2ImpendingW3Total150.440.24.8233.42.462.84.2Strategic5 points: most critical to the planned sales growth easy to make an acceptable decision with only limited risks4 points: the new facility w
6、ill be operational early in 20143 points: important to reduce staff turnover and maintain brand reputation improvements are expected by employees and clients the accident already happened aimed at enhancing brand recognition2 points: challenges the current risk-averse profile of Merbatty the proposa
7、l still needs consideration and it lacks a definite time limit aimed at increasing market share and sales revenue this proposal is risky and it challenges the conventional practice needs to be negotiated within a short period a limited impact on the 5-year plan sensible explanation is expected by JK
8、L a lack of a definite time limit important to customer satisfaction and brand reputation sincere apology and explanation are highly expected the hull is originally due in exactly one month.Priority 1Issue 1 New design supplier for SuraniaThe third boat building facility located in a Middle East cou
9、ntry named Surania is assumed to be operational early in 2014. Merbatty has to decide between two potential interior design companies, both of which are willing to cooperate and have their strengths and weaknesses.Priority 2Issue 6 Late delivery of a hull from TopcrestTopcrest, the sole hull supplie
10、r for Merbatty, has recently won a new major client with a lucrative, thus causing a late delivery of a hull. Although Topcrest has offered to compensate Merbatty, the procurement director Paul is furious and has proposed to pay an extra 50K to source the hull from another supplier who can deliver i
11、t on 15 January 2014.Priority 3Issue 2 Accident at workRecently one of Merbattys employees arrived for work high on drugs and made his way on to a hull promptly falling off and breaking his leg. This reveals that Merbatty has neglected it health and safety record ever since it established.Priority 4
12、Issue 4 Employ sales staff as oppose to agentsStephan believes that their agents are loyal, efficient and well-motivated with great contacts. However, Marie holds the oppositeview that employed sales staff fully devoted to selling to their core markets is what they need.Priority 5Issue 5 Conflict be
13、tween the Chairman and JKLJKL holds 28% of Merbattys issued shares after Merbatty became listed. Simone, the investment director of JKL, recently had a chat with Jesper where Jesper said he would persuade the chairman, his father, to approve the racing boat proposal. Andreas, the financial director,
14、 was out on one of his many charitable visits when Simone visited him. Therefore, Simone thought the chairman viewed Merbatty as his personal property to do with as he wished and that the charitable work in 2012 was a bit costly.Priority 6Issue 3 Build and race a speedboat in a competitionJesper wan
15、ts to build and race a speedboat in the competition which Merbatty already sponsor. He is assured that this step will raise global profile of Merbatty and increase sales of the P-3000. However Alberto is dismayed by this risky and expensive proposal.4.Analyses and evaluationSWOT analysis （Appendix 1
16、）, PEST analysis（Appendix 2）, Porters five forces analysis （ Appendix 3 ）,and other analyses are performed to lay a foundation for the analyses and get a better understanding of Merbatty as well as the luxury boat industry.4.1 New design supplier for SuraniaAlthough Merbatty has witnessed health gro
17、wth over the last decade, the heavy reliance on the supplier along with huge conversion cost poses a great threat to its sustainable development. It has to find another corporation to undertake the interior design service for boats built in Surania due to Aqua Designs refusal. A comparison of the tw
18、o options is shown below. SupplierFactor Cooper DesignsArabian InteriorsDistance200 miles from the facilityClose to Merbattys building facilityHistoryA long historyFour yearsHonorBest modern design awardBest Arabian design awardTechniqueCAD systemsExtranet service allow customers to view the design
19、and interact with designersStaffSkilled staffLocal but well educated and trained staffCapacityAbundant （spare capacity for boats built in other facilities）EnoughPrice100K per boat （mid-sized）90K per boatInterior featureModern and traditionalArabian flavoredAdvantageReputation of high qualityworld-wi
20、de spare capacityLocal contacts and relationshipsLimitless funds for expansionStrong cooperation intentionProposal A Cooper DesignsIt may relieve Merbattys heavy reliance on its original partner Aqua Design since Cooper Designs has spare capacity to design all of the Merbatty boats wherever they mig
21、ht be built. Cooper Designs can offer traditional and modern designs of high quality that are more acceptable to international customers. Stefan anticipates that before 2017 approximately 50% of the Surania facility capacity will be sold to customers in Middle East region. The remaining capacity wil
22、l still target other markets. The extranet service enables more interactions between customers and designers, thus improving customer satisfaction.DisadvantageIts likely that Cooper may not regard Merbatty as a key client since Cooper is a renowned multinational designer and has numerous clients. If
23、 so, the cooperation between them may not be so strong and the bargaining power of Merbatty wont be high.Cooper may not provide customers in Middle East with perfect design work due to a lack of Arabian flavoured design experience.Proposal B Arabian InteriorsArabian Interiors is financed by a wealth
24、y and well-connected Sheik and the Sheik owner has a strong intention to maintain long-term and win-win cooperation with Merbatty. The great local contacts will make it easier for Merbatty to fulfil its market penetration and enhance its brand image in the Middle East. Merbatty is likely to secure m
25、ore sales in this region and achieve its planned growth. Arabian flavored design will be rather acceptable and popular among local people. The relatively short history of Arabian Interiors may be a weak point because international customers may usually prefer a well-known designer. 4.2 Late delivery
26、 of a hull from TopcrestThis problem is an urgent one and should be solved instantly. Otherwise, it will possibly hinder the cooperation with Topcrest and its hull supply in the long term. On top of that, the late delivery may possibly bring about inconvenience to the customer and have a damaging ef
27、fect on Merbattys reputation and brand image.At the moment, there are two possible solutions open to the Merbatty board:1.Continue to cooperate with Topcrest and accept its compensations;2.Refuse the proposal from Topcrest and source the hull from another supplier that Paul has contacted.If Topcrest
28、s offer is accepted, the delivery time would be half a month longer than that of the other supplier. From the financial perspective, the cash flow difference between two hull suppliers is as follows:Payment for idle time88,464Discount on boat price25,000Ex-gratia payment30,000Extra cost50,000Total d
29、ifferences generated193,464（For interpretations see appendix 8）In addition, more factors need to be taken into consideration. Below is an analysis about the competitive edges of these two solutions.A comparison of competitive edgeChoosing TopcrestChoosing the unknown supplierAdvantagesLong-term cooperation with MerbattyWorld-class hull supplier with high quality and great reputationSincere apology with financial compensationsEar
