Case Scenario 2: Heartsong LLC

question 3

Essay

Case Scenario 2: Heartsong LLC.
Heartsong LLC is a designer and manufacturer of replacement heart valves based in Peoria, Illinois. While a relatively small company in the medical devices field, it has established a worldwide reputation as the provider of choice of high-quality, leading-edge artificial heart valves. Most of its products are sold to large regional hospital systems and research hospitals around the world, though primarily to customers in the United States and Europe. Specialty heart centers are another emerging, but fast-growing market for its valves. Heartsong has recently embarked on an expansion strategy that requires it to increase its volume, which in turn will demand more component parts than it can source domestically- both from an economic and volume standpoint. The firm has determined that such growth is only viable if it produces these parts itself overseas for a lower cost, or outsources the production entirely to a joint venture it establishes with a local manufacturer, which could both produce the parts more cheaply and in higher volumes. It is considering starting up an owned production facility in Luxembourg, or seeking a joint venture with a precision manufacturer in China.
-(Refer to Case Scenario 2). What opportunities and threats might Heartsong be exposing itself to via the
Luxembourg expansion proposal?

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Definitions:

Normal Approximation

A method used to estimate the shape of a binomial distribution using a normal distribution when the sample size is large.

Sign Test

A non-parametric test used to determine if there is a statistically significant difference between paired or matched samples by examining the signs of differences without assuming any particular distribution.

Obstacle Courses

Physical or metaphorical challenges composed of multiple obstacles that require agility, strength, and strategic thinking to navigate or overcome.

Nonparametric Tests

Statistical tests that do not assume the data being analyzed follows a particular distribution, often used when data doesn't meet the assumptions of parametric tests.