Nova Incorporated: Two Sourcing Opportunities

2719 Words11 Pages
Case 19 • Nova Incorporated: Two Sourcing Opportunities Inc.’s two-year contract with Herman Miller’s Office Pavilion. ASAL’s sales projections are based on the actual numbers sold by their salesforce, management’s prior ‘‘in-house’’ sales, and the outstanding results of the international trade fair. Exhibit 5 and 6 show pro forma income statements for ASAL Products, Inc. and ASAL GmbH, respectively, based on those sales projections. Exhibit 7 shows the exchange rates from the end of September 1998 to the beginning of June 1999. The very next day everything changed. Vreni Sahli became involved, and decisions on what actions to take were elevated to corporate and International Sales and Distribution division level. Herman Miller found itself in a difficult predicament. ASAL Products, Inc. had a valid and operating contract to buy Aeron chairs and keyboard trays in the United States and export these products to Europe. Yet there were authorized distributors and dealers in Europe with exclusive territories. • 723 Herman Miller, Inc. had to make a strategic decision quickly. Office Pavilion’s general manager, Donald Britton, and vice president, Gary Kemp waited for a call from Jack Howard with directions from headquarters. EXHIBIT 7 DM/$ EXCHANGE RATES Date September 30, 1998 January 12, 1999 May 12, 1999 June 2, 1999 Fx rate WSJ 1.6696 DM/$ 1.6909 DM/$ 1.8359 DM/$ 1.8882 DM/$ Aeron’s DM Cost (@ $590) 985.06 DM 997.63 DM 1,083.18 DM 1,114.04 DM C ASE 19 NOVA INCORPORATED: TWO SOURCING OPPORTUNITIES After notifying his management team of their assignments for the following week’s meeting, Fisher contemplates taking a short vacation, and, perhaps, reacquainting himself with the game of golf. As he is preparing to leave, he receives two memos. The first is from Claudio Spiguel, requesting authority to purchase all products for South America from a local

More about Nova Incorporated: Two Sourcing Opportunities

Open Document