Case Scenario 3: Bunnywac

question 39

Essay

Case Scenario 3: Bunnywac.
Bunnywac is a global producer and seller of batteries for consumer electronics, and competes primarily by providing battery products equal in performance at a lower price. The worldwide battery industry suffers from issues of overcapacity and commoditization, brand segmentation and proliferation, the growing strength of global retailers, and the low-cost threat of new entrants from Asia. Bunnywac has grown quickly into one of the leading players in the battery industry primary through horizontal acquisitions, and is now counted among the top four companies in North and Latin America. Its presence in Europe and Latin America is negligible. A key factor in Bunnywac's rapid growth is its technology outsourcing arrangement with Mats. Mats is one of Japan's largest technology holding companies and Bunnywac's core battery technology is licensed from Mats. Bunnywac's license with Mats expires soon and it is concerned that Mats will not renew it, or will renew it only for a substantial price premium. Consequently, Bunnywac's CEO is exploring the possibility of developing its core technology in-house.
-(Refer to Case Scenario 3). Does Bunnywac's development of its core battery technology better fit the notion of autonomous or induced strategic behavior?

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Definitions:

Positive Correlation

A statistical relationship between two variables where an increase in one variable is associated with an increase in the other variable.

Influential Observations

Data points that have a significant impact on the result of a statistical analysis, potentially skewing the outcome.

Simple Linear Regression

A method in statistics that models the relationship between two variables by fitting a linear equation to the observed data.

Least-squares Regression Line

A straight line that best models the relationship between a dependent and independent variable by minimizing the sum of the squares of the vertical distances of the points from the line.