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Transcription of this question: 5.Gavin Pratt has been appointed as LadyA’s International Marketing Director (Item 1). He wasselected for his excellent sense of style and his knowledge of the LadyA brand. However, he haslimited marketing experience.Alejandra decided to reject Option 1 and Option 3. She identified two strategies for implementingOption 2 (lines 147—152). The new products would be manufactured using the samemanufacturer in Malaysia that produces LadyA’s perfume and cosmetics. Option 2 would requirethe introduction and use of business-to-customer (B2C) e-commerce distribution channels. Salesgenerated through B2C e-commerce are growing rapidly (Item 2).• Implementation strategy A, (Option 2 through intemal growth): create an entirely newmarketing department for LadyA. The marketing department would organize intemationalpromotion for LadyA products, set up distribution channels and negotiate with internationalagents, wholesalers and major retailers around the world. Once the global brand is developed,the marketing department would develop B2C e-commerce.• Implementation strategy B, (Option 2 through external growth): take over Fabco, aninternational marketing business. Fabco has proven experience in organizing internationalpromotion which could be applied to LadyA products. Fabco already has distribution channelswith intemational agents, wholesalers and retailers outside the United States (US), and hasexperience in developing and using B2C e-commerce. However, Fabco has recently beenaccused of some unethical business practices (Item 3), and has never worked with media starssuch as LadyA.Alejandra asked Gavin to research both implementation strategies so that she can make a decisionas soon as possible. As part of Gavin’s research he has obtained some financial data from Fabco(Item 4).(a)(b)(c)(d)Identify two features of a wholesaler.Using relevant data from Item 4, calculate the acid test (quick) ratio X, for 2014(no working required).Using Item 4 and your answer to part (b), comment on the changes inFabcds liquidity.Analyse the relationship between the product life cycle, investment and thelikely profits for LadyA.Using information contained in the case study and Items 1—4, recommendwhether Alejandra should choose strategy A or strategy B in order toimplement Option 2.[2][12]Additional informationItem 1: Social networking responses to Gavin Pratt’s appointmentLadyA: News flash!!! Gavin is my new Intemational Marketing Director!!!!!!!!!!!Gavin: Wow what an opportunity!!! We will conquer the world :-)Fashion joumalist: How could someone like Gavin, with no marketing experience, be given thisopportunityItem 2: B2C e-commerce sales worldwide, 2012—2017 (in $ billions)Asia-PacificNorth AmericaEuropeSouth AmericaMiddle East and AfricaTotal2012301380319382110592013431362482712522014525483405583415052015681538447654017712016483714620542017105366051875512357(Source: Data: www.ernarketer.comlItem 3: News report on Fabco, 1 December 2014This year, Fabco’s performance has been outstanding in Asia. Sales and profits have grown fasterthan many similar businesses in the region. Strong performance in Asia has enabled Fabco tonegotiate a business relationship with The Cathy Group, a large chain of retail stores in Asia.However, concern is growing that Fabco’s business practices are not always ethical. Fabco sometimesignores minimum wages and has suppliers who do not practice corporate social responsibility (CSR).Customers are showing a very high level of satisfaction with Fabco. However, some Fabco customersin Europe have reported problems with their online orders and accounts.(Additional information continued)Item 4: Select financial data for FabcoSales revenue (Europe) ($m)Sales revenue (Asia) ($m)Sales revenue (South America) ($m)Net profit margin (%)Current assets ($m)Current liabilities ($m)Stock ($m)Current ratioAcid test (quick) ratioGearing ratio (%)Return on capital employed (ROCE) (%)2012501520503.42.01.4171.070152013452020405.×807

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