Nova Incorporated : Two Sourcing Opportunities

Nova Incorporated : Two Sourcing Opportunities

An Introduction

Before John Fisher decides to take some holydays he gets two memorandums fro their Executives in Asia PAC and South America that are showing their interest in to improve the RONA thought strategic alliances in APAC and an outsourcing contract in South America to better improve RONA and delivery in both areas.

Questions

1.Evaluate the risks and rewards of internationalization/globalization through cooperative strategies via the opportunities to (1) enter into joint ventures in China and India in exchange for licenses to NOVA's process and product technology and (2) outsource manufacturing in Brazil.

Joint Ventures in China & India

Risks

- Government Laws and policies

- Loss of Quality Control

Rewards

- Low labor price

- Reduce cost of distribution

- Increase sales by a factor of 10

- Increase RONA up to 55%

- Export opportunities in other neighbors market

- Expand Brand and technology to these countries

Outsourcing Manufacturing in Brazil

Risks

- Loss of Quality Control

- Loss of Product Secrets

- Loss of Innovation

Rewards

- No Investment from NOVA

- No transportation or distribution cost

- No currency fluctuations

- Reduce time to supply the warehouse in Brazil

- Increase RONA up to 40%

- Increase value of Costumer Service

2.Discuss market orientation in the context of sourcing strategies: "How do we assure that we provide our customers the right product/service at the right place, at the right time, at the right price, at our best total cost'?

If they decide to go ahead with that sourcing strategies NOVA will improve:

- In place because they can deliver