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Transcription of this question: 4.If RDM builds a new production facility in Europe, an immediate consequence will be an increasein capacity. At current levels of output this would lead to a reduction in capacity utilization. Thecurrent output of RDMs factory is 20 000 units a year, with a productive capacity of 21000 units ayear before the new facility is built. If the new production facility is built, the greater capacity for thewhole business will, at current levels of output, result in the capacity utilization falling to 50% untilproduction at the new facility starts.Xi, the marketing manager, suggests that this increased capacity provides the opportunity formarket development to be achieved by entering the United States (US) market.The IJS market has similarities with Europe, with an aging population and low birth rate. Demandfor customized healthcare devices is high. However, the healthcare system in the US is verydifferent, with a much greater role for private sector healthcare compared to Europe, where muchof the healthcare is state funded. In the US, 18% of gross domestic product (GDP) is spent onhealthcare compared with an average of 11 % in Europe. Advertising spend in the US is very highfor the typical healthcare equipment business, which uses TV and the internet to reach individuals,whereas in Europe healthcare equipment businesses typically negotiate with governmentorganizations. Average incomes in the US are higher than in Europe. Competition in the US isvery high, although some major healthcare equipment businesses dominate the market. Industrial/employee relations in the US are generally more decentralized than in Europe, with a lower level ofunionization.To assess the best way to enter the US market, some senior managers may have to move to theUS and Xi may need to recruit some new staff in the US with specialized knowledge of US lawsand regulations, as well as some additional marketing employees. Xi is aware that industrial/employee relations are different in the US.To assess the best way to enter the US market, some senior managers may have to move to theUS and Xi may need to recruit some new staff in the US with specialized knowledge of US lawsand regulations, as well as some additional marketing employees. Xi is aware that industrial/employee relations are different in the US.Existing staff will have to get used to new ways of working and are concerned about having to workwith new staff in the US.(a)(c)(d)[Source:@ International Baccalaureate Organization 2019]Describe one industrial/employee relations method used by employers.(i) Using the information above, calculate the current capacity utilization rate atRDMs factory.(ii) Calculate the increase in capacity at RDM if the company builds a newproduction facility (show all your working).Explain two possible reasons for RDM employees’ resistance to change if RDM entersthe US market.Using information from the case study and the additional information above, discussthe opportunities and threats for RDM of entering the US market.[2][10]

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