presented by:
Bidhu Bhushan Panda

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QUESTION: -
1. What does RPI’s competitive position appear to be for the entire firm, and for the boating division? What are some of the likely critical success factors for the boating division?
Ans. RPI is known as a very high quality producer with features and prices higher than most in the industry (per the case) which suggest the differentiation strategy. The critical success factors are likely to follow the competitive strategyfocus on quality and innovative features. This means that the production costs will not be the first concern, but that the ability to install high quality manufacturing processes would be most important.
2. Does Barry’s plan for the Singapore plant fit the strategic competitive position you developed in (1) above?
Ans. The Singapore plan will work as long as the differentiation strategy can be achievedhigh quality production and innovative features. Would the Singapore location be an advantage in achieving quality and innovation, or would there be a potential negative effect? For example, it is possible that the availability of highly skilled labor in Singapore would be an advantage. Moreover, it is possible that the government of Singapore would partially or wholly subsidize research into new sailboat features if the research is conducted in Singapore, using at least in part Singapore facilities and personnel. The opportunity for an integration of the development of the innovations with the manufacturing operations would be a further advantage.
3. What do you think are some of the key international issues that are relevant for Barry’s proposal?
Ans.
• There are differences in taxes, and Singapore offers the advantage of a tax holiday (how many years?) and a subsidized loan.
• Other issues to consider are the stability of the Singapore dollar relative to the United States dollar. In recent years the Singapore dollar has been appreciating relative to the US dollar, which has both advantages and disadvantages. As the Singapore currency appreciates, expenditures in local currency become more expensive from the standpoint of RPI. Similarly, the retail prices in US dollars in the United States for the completed sailboat will have to rise to offset these increased costs. RPI can manage the effects of the currency changes by appropriate financial policies, including long term purchase contracts.