Case study: China's Xiaomi launches online lending service in India Xiaomi Corporation is a Chinese electronics company founded by Lei Jun in 2010 that makes and invests in smartphones, mobile apps, laptops, bags, trimmers, earphones, MI Television, Shoes, fitness bands, and many other products. At the start of 2018, Xiaomi was the world's fourth-largest smartphone manufacturer leading in both the largest market, China, and the second-largest market, India. Beijing-headquartered Xiaomi first moved into India's fast-growing financial services space in March 2019 with Mi Pay, which allows bill payments and money transfers. The company has recently (Tuesday, 3rd December) launched its online lending service in India, widening its offering of financial products in one of the world's biggest web services markets. While smartphones are the core of its business, Xiaomi earns low margins from its affordable devices and relies on services for long-term profit. The company prides itself in selling their affordable products to the mass markets in China and India. However, Xiaomi’s attempt at launching a financial unit in Indonesia failed due to a disagreement with regulators over licencing. The company had to eventually shut down their operations in Indonesia in late 2018. Question: Question 1. Describe the alignment between the three different types of business strategies and its association with HRM strategies and functions. What business strategy has Xiaomi adopted and how would this strategy impact their SHRM approach? Question 2 Given that Xiaomi has grown its international operations significantly in the last 7 years, the company has had to adopt an aggressive recruitment and training strategy. Based on the systems approach to HRD, the first step of the process is to conduct a HRD needs analysis. Describe how Xiaomi would conduct a HRD needs analysis. Question 3 How would Xiaomi then evaluate the effectiveness of the HRD programs?

Case: Gillette Mach3 and Fusion (Crawford and Di Benedetto, 2014)
For decades, the Gillette Company (now a division of Procter & Gamble) has followed a
simple strategy for success: Replace excellent blade technology with an even better one.
Over the years, Gillette has brought us the Blue Blade, the Platinum Plus, the Trac II, the

Atra, the Sensor, then the SensorExcel. In April 1998, Gillette launched the Mach3: a three-
bladed pivoting cartridge system. In early 2006, the five-blade system, the Fusion, hit the

market. This case examines the development of the last two generations of Gillette
products.
By the early 1990s, design problems that had initially stalled the three-blade system had
been overcome. A prototype three-bladed razor (code-named the Manx) was developed
and shown to outperform the Sensor in internal tests. A key element of the Manx’s design
was the positioning of the three blades: Each blade was a little closer to the face than the
previous one. This patented design reduced the irritation caused by the third blade. In
addition, the pivot point was moved to the bottom of the cartridge; this new pivot point
made shaving feel a little like using a paintbrush, added to the cartridge’s stability, and
ensured that the bottom edge of the cartridge always touched the face fi rst (ensuring that
hairs were lifted properly). Other design features were also built into the Manx. To the
white lubricating strip found on the Sensor, a blue indicator was added that gradually faded,
indicating when the blade needed to be changed. And engineers were working on better
blades, perfecting a way to make them thinner and harder, thanks to new metal technology
borrowed from the manufacture of semiconductors. Furthermore, consumer studies found
an interesting problem incurred by Sensor users that suggested a potential product

improvement: 18 percent of men put the cartridge on the razor upside down! A new snap-
in mechanism was developed that would only work in the right direction.

The new design was going to be costly to manufacture. There was internal resistance within
the ranks of Gillette, with some managers believing that the company should go with a
less-revolutionary, three-bladed SensorExcel rather than a costly and risky introduction of
a totally new product. Nevertheless, the new design (now called by the code name 225)
was locked in during the month of April 1995. The next three years were spent in designing
and producing the equipment needed to manufacture the new cartridges—most of the
machinery had to be specially designed for the task. Meanwhile, product use tests with
consumers were showing that the Mach3 was outperforming the SensorExcel 2 to 1 and
doing even better against competitive brands. The consumer tests were also suggesting that
users were fairly insensitive to price—the Mach3 tested well even at a 45 percent price
premium over SensorExcel.

Gillette geared up for an April 1998 launch. In total, the Mach3 development took six years
and $750 million, about four times what the Sensor cost. Further, $300 million was

allocated for marketing worldwide in the fi rst year, so the upfront costs broke the billion-
dollar barrier. The rollout began in the United States, Canada, and Israel in July 1998, then

Western Europe and part of Eastern Europe in September. The plan was to have the Mach3
available in about 100 countries by the end of 1999. To accommodate the rollout,
production ramp-up was targeted to 1.2 billion cartridges per year by the end of 1998. The
price point was set high (about 35 percent above the SensorExcel’s price of $1 per blade);
sticker shock was reduced by putting fewer blades in each pack.
Eight years later, Gillette repeated the process with the launch of the Fusion, a five-blade
system with lubricating strips on both sides and one extra trimming blade on the back. In
addition to having more blades, the Fusion also placed the blades closer together in the
cartridge for a close, comfortable shave, and also came in a battery-powered model (the
Fusion Power) that vibrates, adding to shaving comfort.
The launch of the Fusion occurred at around the time Gillette was starting to lose market
share to a key competitor, Wilkinson Sword (a division of Energizer), with its Quattro
shaving system featuring four-blade cartridges. The success of the Quattro suggested that
customers were willing to accept shaving systems with more than three blades and
encouraged Gillette to launch the Fusion soon thereafter. In fact, Gillette never launched a
four-blade system—with the Fusion, Gillette leaped over the competition and moved
directly to the five-blade system.
Fusion was the first Gillette blade launched after the P&G acquisition and was an
immediate success. Despite a price point about a dollar higher per cartridge than Mach 3,
four million razors were sold in the first two months. An important part of the marketing
support for the Fusion was an extensive, worldwide television advertising campaign
featuring globally recognized athletes such as Tiger Woods, Thierry Henry, and Roger
Federer. Promotional support for most regions of the world was switched entirely to the
Fusion, while in a few selected markets in Asia, both Mach3 and Fusion promotions were
carried out.
Nevertheless, Gillette received some criticism and scepticism at the time of the Fusion
launch. A story in Consumer Reports found no additional performance benefits beyond
what the Mach3 offered, and critics wondered why as many as five blades were needed for
a good shave. Some even recalled phony, satirical TV ads on programs such as Saturday
Night Live and MadTV for 20-blade systems and wondered if Gillette was going in that
direction. It was also troubling to Gillette executives that, while the razors were selling
well, sales of the cartridge refills were lagging. This was a real cause for concern, for two
reasons. Low sales of refills would suggest that customers viewed the Fusion as a novelty
product and were not building loyalty; also, in the razor business, refills are much more
profitable than the cheaply priced handles. Despite the initial skepticism, the Gillette
Fusion has been a top-seller and major generator of revenue for Gillette.

QUESTION ONE
“Concept statement states a difference and how that difference benefits the customer or
end user”.
With reference to the above statement, prepare the concept statements for Mach3 and
Fusion and discuss about the format, commercialised versus non-commercialised
statements, competitive information, and price in the statements.

QUESTION TWO
(a) Based on what you see in this case, what strategic role did design play at Gillette?
Discuss.
(b) What are the risks involved in the decision to go with “really new” replacement
technology, versus making incremental design improvements to the older
technology? Discuss.

QUESTION THREE
Using the list of product use testing decisions, make recommendations as to how Mach3
and Fusion could have been product use tested prior to launch.

QUESTION FOUR
(a) Discuss the differences between the Mach3 and Fusion launches.
(b) Comment on the aggressive marketing and rollout plans used by Gillette to support
their product launches. Would you recommend they take it slower? What are the
pros and cons?

The Chahad Bank wants to open a new branch in a distant city with very different economic conditions. Currently, the bank has an expected return of 15% with a standard deviation of 7%. The new branch is expected to have a return of 20% with a standard deviation of 10%. The correlation between the bank's returns and the returns from the new branch is -0.3. The new branch is expected to contribute 10% of the bank's revenues. What is the expected return for the bank if they add the new branch?

please show work

“Imagine John works for a company in New York that sells widgets. As part of his job, John has access to a one-page document belonging to the company that contains its secret method for manufacturing high-quality widgets at low cost. John decides to leave his company and to start a competing widget company in New Jersey. John concludes that he needs to bring a copy of the document to New Jersey to start his business. Consider the following ways that John could take advantage of his access to the document to help start his competing business: A. John could steal a paper copy of the document in New York and carry it with him to New Jersey. B. John could make a photocopy of the document, return the original, and carry the photocopy with him to New Jersey. C. John could save an electronic copy of the document on a thumb drive and bring the thumb drive with him to New Jersey. D. John could send himself an e-mail from New York to New Jersey and attach a .pdf of the document to the e-mail. E. John could memorize the document, travel to New Jersey, and then recreate a copy of the document from memory. Which of these acts should count as the interstate transportation of stolen property?” (2012, Kerr).

A solid, homogeneous sphere with a mass of m₀, a radius of r₀ and a density of ρ₀ is placed in a container of water. Initially the sphere floats and the water level is marked on the side of the container. What happens to the water level, when the original sphere is replaced with a new sphere which has different physical parameters? Notation: r means the water level rises in the container, f means falls, s means stays the same. Combination answers like 'f or s' are possible answers in some of the cases.

1. The new sphere has a radius of r > r₀ and a density of ρ = ρ₀.
2. The new sphere has a mass of m < m₀ and a density of ρ = ρ₀.
3. The new sphere has a mass of m = m₀ and a radius of r > r₀.

4. The new sphere has a density of ρ < ρ₀ and a radius of r = r₀.
5. The new sphere has a mass of m = m₀ and a radius of r < r₀.
6. The new sphere has a radius of r = r₀ and a mass of m < m₀.

7. The new sphere has a mass of m > m₀ and a density of ρ < ρ₀.
8. The new sphere has a density of ρ < ρ₀ and a radius of r > r₀.
9. The new sphere has a mass of m < m₀ and a radius of r > r₀.

Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays.

This year Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes.

The following information is available to use in deciding whether to purchase the new backhoes.

(a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.)

(1) Using the net present value method for buying new or keeping the old.

(2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.)

(3) Comparing the profitability index for each choice.

(4) Calculate the internal rate of return factor for the new and old blackhoes

1. Consider a market of homogeneous products in which firms compete on price. Demand in this market is

given by

q(p) = 50 -10p

Consumers buy from the producer with the lowest price. If the prices of both firms are the same then they

purchase from E. There are both an incumbent firm M and a potential entrant E which can produce the good

at marginal costs 3 and 2 , respectively. Prior to entry, E must incur an entry cost equal to Ce is greater than or equal to 0 .

(a) Suppose that Ce = infinity . What are the equilibrium price, quantity, and surplus?

(b) Suppose that Ce = 0 . What are the equilibrium price, quantity, and surplus?

(c) What is the maximum value of Ce for which E does not make a loss if it enters?

(d) What is the maximum value of Ce for which it is optimal from a welfare perspective (i.e. total surplus)

for E to enter? (At the maximum value it is also optimal for E not to enter.)

2. Suppose that there is a single producer of a good and a single retailer. The producer’s marginal cost is 50

and the retailer’s marginal cost is the wholesale price w plus a unit retail cost equal to 50 . The producer

chooses the wholesale price and the retailer the retail price. The demand function is 200 - p .

(a) Write down the retailer’s profit function as a function of the retail price p and the wholesale price w .

(b) What is the optimal retail price choice as a function of the wholesale price?

(c) What is the corresponding quantity?

(d) What is the producer’s profit as a function of w ?

(e) What are hence the equilibrium values of w; p; q ?

(f) What are equilibrium producer and retailer pro ts (both separate and in aggregate)?

(g) Now suppose that the producer and retailer merge without a change in retail or production costs. Then

what would be the new equilibrium price, quantity, and profit?

(h) Provide a brief intuitive explanation for why the retail price is now less but profits are higher.

(i) If the producer and retailer are still separate rms, then how much of a $1 increase in the unit producer

cost gets passed through to the retailer and how much to the consumer?

(j) How would a $1 increase in the unit retail cost affect the wholesale and retail prices? Please explain.

3. Suppose that there is a nut manufacturer and a bolt manufacturer. Consumers need one of each. The cost

of producing a nut is 30 and the cost of producing a bolt is also 10 . Demand is

q(Pn; Pb) = 280 - 4pn - 4pb

(a) What are the equilibrium prices, quantities, and profits?

(b) What would be the corresponding numbers if the firms merged? You only need to set one combined price

for a nut–bolt pair.

(c) Explain why the price of a nut–bolt pair went down yet profits went up.

4. Consider a market for differentiated products with two producers. Each producer is tied to a single retailer.

Each producer firm sets a wholesale price. Then, the retailer chooses a retail price. The demand functions

are (

q1(p1, p2) = 100 - 3p1 + 2p2,

q2(p1, p2) = 100 + 2p1 - 3p2,

The production cost of each unit of either good is 56 . There are no retail costs and no fixed costs.

(a) For given wholesale prices w1;w2 , derive the optimal retail prices p1, p2 as a function of w1, w2 .

(b) Express the producers’ profit functions in terms of w1;w2 .

(c) What are the optimal wholesale prices?

(d) What are the optimal retail prices?

(e) What are retailer profits?

(f) What are producer profits?

(g) What would have been per firm profits absent a retail channel?

(h) What is the range of franchise fee amounts that would make both the producer and the retailer better

off with a retail channel?

An article in the October 11, 2006, issue of the Washington Post claimed that 15% of high school students used cursive writing on the essay portion of the SAT exam in the academic year 2005-2006 (Pressler, 2006). Suppose you take a random sample from those exams and see what proportion of the sample used cursive writing for the essay. Assume the sample size is 180 do the following:

• A -- Determine what π and N are.
• B -- Describe the sampling distribution.
• C -- Show that the CLT holds.
• D -- What does the CLT say about the sampling distribution?
• E -- What is the probability of obtaining a sample where more than half of the students wrote their essay in cursive?
• F -- What is the probability of obtaining a sample where between 10 and 25% wrote their essay in cursive?
• G -- What is the probability of obtaining a sample where less than 12% of the students wrote their essay in cursive?