Celluclear Wireless Goes Global

CelluClear Wireless Goes Global

University of Phoenix - Online

ECO 561

July 17th, 2010

CelluClear Wireless Goes Global

Kendra Sherman, a Business Development Specialist at CelluClear Wireless, which is a manufacturer of cell phones. She is currently waiting for her appointment with Lars Norman, the production manager for CelluClear Wireless. Kendra has secured 100,000 cell phones almost identical to CelluClear wireless Alpha model, which will support a promotion that major Big Box Chain in England is running with a telephone service provider. The delivery date is in 90 days. Currently Lars has excess capacity of 70,000 cell phones units over the next three months and as part of his bonus, which is based on running the factory at capacity. The larger part of his bonus however, is based on factory total profitability. Currently, CelluClear Wireless runs two production lines. At the factory, they produce Beta model with more features. This phone sells for $30 but to produce the phone, it cost more. The other phone they produce is Alpha Model, which costs $20. OEM manufactures in Mexico are trying to convince Lars Norman that he can produce up to 100.000 units of Alpha phones in a short time. OEM says they can produce identical phones and the price would be nonnegotiable $14 a unit. OEM tends to protect it revenues in it the domestic currency so that the contract will specify the US dollar decrease by two percent against the currency over the next 60 days. It would raise the US price to offset the currency change. As of now, Lars Norman needs to decide whether to take the order up with Big Box. He also needs to decide if he needs if OEM will manufacture the Alpha phones for CelluClear Wireless (CelluClear Wireless Scenario, 2010).

CelluClear Wireless Decision

Lars Norman had to make a decision if he wants to export to England where Big Box Chain is. If he decides to export, he would need assistance on making these phones. As the Economy being weak in...