VCI Case VCI/Ellison Case Questions and Analysis

Case Questions

Global sourcing, simply put, is engaging in the procurement of goods and/or services without allowing geopolitical boundaries to limit such procurement (though there are of course effects of these boundaries on the advisability of certain trade relationships). Different levels of global sourcing exist, from using international suppliers when convenient to developing procurement strategies that take full advantage of global systems.

There are not major cultural differences noted between VCI and Ellison that will adversely affect this merger, however there are some notable differences that need consideration. Teamwork and supplier loyalty are more engrained in Ellison, and VCI will need to incorporate better teamwork while Ellison becomes more aggressive.

3)

Global sourcing has the potential to create much greater cost effectiveness and efficiency for VCI/Ellison, and this is the primary reason for pursuing this strategy. The global sourcing plan is fairly straightforward, consisting of identifying suppliers, receiving proposals, testing and finalizing international contracts and shipments.

4)

Negotiation is key to the global souring plan at VCI/Ellison, and teams are expected to be prepared to negotiate effectively through their...

Once the individual issues in the case are probed, however, it becomes clear that the problems and the solutions identified in both companies -- and the merged single company -- are relatively simple and straightforward. Though the case ends by highlighting certain problems that will be faced in the coming years, there are clear and strong rationales for the actions taken by VCI/Ellison in its global sourcing strategy development and implementation program, and suggestions for the company's future after initial implementation.
The practicalities of global sourcing are clear regardless of the specifics of the company engaging -- or considering engaging -- in such…