Evidence 1: The LPQ Builders Company case analysis

Read the training material “A case study on the LPQ Builders Company” and
solve the following points:

 Determine the overall objective of the LPQ Builders Company, defining what
is intended to do with the proposal of the case.

Case Objetive:

 Carrying on with the development of the evidence and according to the case
analysis of the LPQ Builders Company, detect the problems that have been
arisen in relation to your role as a Technologist in International Negotiation.
Organize the problems you have identified and associate them with the
corresponding business unit, in order to select information for further
analysis.

Business Unit Problems

1. Administration 1.
2. Internationalization 2.
3. Human resource management 3.
4. Marketing 4.
5. Production 5.
6. Finances 6.

To develop this evidence, consult the training material:

 A case study on the LPQ Builders Company.

And, the supplementary material:

 Business units and business areas.

This evidence must be submitted in a Microsoft Word or Pdf format through the
virtual learning platform, as follows:

Steps to send the evidence:

1. Click on the title of this evidence.

2. Click on “Examinar mi equipo” and find the file you have previously saved.
3. Leave a comment to your instructor and paste the link or the Web site
address where the blog is published.
4. Click on “Enviar”.

Case Objetive: The main objective of the LPQ Builders Company, regarding what
to do about is to implement financial strategies to minimize the impact of the
appreciation of the exchange rate and reduce the volatility of their export earnings,
minimize production costs by eight percent (8%), making it more efficient
production processes through the acquisition of new and modern equipment and
improve export logistics processes to obtain significant savings in renegotiating
transport with other international companies for the movement of the load.

Therefore, from the general direction, dissemination and training processes are led
on the new strategic direction which is oriented towards the internationalization of
the products in order to encourage commitment to them.

 Carrying on with the development of the evidence and according to the case
analysis of the LPQ Builders Company, detect the problems that have been
arisen in relation to your role as a Technologist in International Negotiation.
Organize the problems you have identified and associate them with the
corresponding business unit, in order to select information for further
analysis.

Business Unit Problems

1. Administration 1. The general manager should constantly evaluate
all functional areas, conducting follow-up meetings
of the management of each manager business unit,
 hence the difficulty presented in LPQ was due to a
problem of segregation of duties. Where there was
a failure in internal control, what the administration
could not prevent or reduce the risk of errors and
irregularities presented. the organization was not
ready from the point of view of planning and
direction to address this internationalization
process, therefore its staff remained confused, for
an event of this should apply modern management
and use strategic planning redefining the Mission
and Vision and setting policies involving all areas.
2. LPQ Builders decides to implement its
internationalization processes facing competitive
challenges with foreign markets.
The business unit decided to hire a professional
with 10 years’ experience in international trade and
the specific processes in the construction sector.

The new manager of internationalization hired a

customs agency Level 1, for the execution of the
processes of import and export of LPQ Builders.
However, in such employment, LPQ Boulder not
clearly specified instructions regarding production
processes, which generated an incorrect tariff
classification of imported goods. by error the
company must pay penalty customs for branch
operations in Buenaventura.
2. Internationalization
As to purchase supplies that are imported by LPQ
are obtained from import goods with 5 international
suppliers, however 2 of those suppliers fail to
deliver the goods with the specifications required
quality, which generates returns to the supplier. To
overcome these problems the company decided to
implement the contractual clauses which indicates
the increase of the payment period from 90 days to
120 days, in order that suppliers remedied the
aforementioned drawbacks.

The manager stated that area internationalization

has been in a constant search for international
suppliers to enable it to cut costs in your portfolio
with mainly Chinese suppliers.

3. Human resource management 3. When the change in organizational structure

began, the CEO asked the department of human
management, will initiate a process of training for
group business unit managers, coordinators and
 staff processes. This request I cause that
processes operating personnel training was
postponed.

With Organizational changes, management director

of LPQ demanded that staff were qualified.
Wherefore human management department
conducted a review of the professional staff,
identifying 10 people in the administrative that area
have not completed career.

The management decision was without the services

of five administrative department having less than
50% of their training. But the problem was that the
focus of training is open only to senior executives
training. So operating personnel and lower ranges
aside.

For example the person responsible for verifying

the load before being put into units and
accommodated in the transport vehicle, is
professional but has no knowledge about the
essential characteristics that must be taken into
account in an export, implying an empty in the
process.

At the meeting of managers, the unit manager of

Human Business says that the department has
focused on an extensive recruitment and selection
process, which has led to qualified personnel. But
insists it is vital for the company to maintain
ongoing training for all staff. Then, relationship of
employees is presented.
4. Marketing 4. Market demands have required metal cutting
saw, LPQ thus began a process of market
research, which seeks with a potential supplier in
three countries.

However the provider was chosen, is in the nearest

country to Colombia, because that country signed a
free trade agreement with Colombia. But at that
time the recruitment was done without executing a
process of competitive analysis, experience and
certification provider.

The reduction in transportation costs allowed the

cost of the final product had a lower cost for LPQ,
which generated most competitive prices in the
international market.
 The marketing manager said LPQ presented a 5%
loss of customers for domestic sales, a loss of 1%
of sales from international customers. However
receives a monthly value of 10 million pesos in
sales, generating 2% of the net profits per month
and 6% per year.
5. The director of internationalization also directs
the production area, in the company of logistics
coordinator. In this area of production are reflected
in the decisions business unit of
internationalization, because the manager in order
to reduce costs, hired a specialist in international
transport of goods, seeking to centralize freight
since Bogotá. Due to this fact the sale of two
company vehicles is performed in order to buy a
software for inventory control, because it does not
have any software in the cellar document
management, to control shipments to customers
national and international, which causes problems
between the branches of LPQ.

The international shipping company will share the

loss percentages returned orders when showing of
improper handling of merchandise, allowing LPQ
assume 50% of the costs of return in the imperfect
orders.
5. Production
We used raw material in low density polyethylene in
the packaging of the goods, which has caused
damage to the goods which causes devolutions by
customers.

The decision of hiring international carrier, monthly

40% reduced transport costs, which in December
2012 were $ 100 million per month.

LPQ assumes 50% of the costs of return in orders

due to imperfect transport, involving 5% of
international orders and 10% of all domestic orders.

Monthly, the requested orders for finished products

are 1,000 tons for the international market and 400
tons for domestic.

Returns for orders shipped internationally from 4%

of goods for damage and break the package
 6. The company decided to sell two of the four
vehicles in its national fleet of transport, because
the buyer provided payment in cash, equivalent to
$ 500 million, which was immediately invested in
the acquisition of software to improve the
information systems of the company.

The defective merchandise that LPQ receives

causes delays in delivery to customers. Additionally
generates overruns in the shipment of goods.
Monthly the purchases these providers are equal to
6. Finances one billion pesos, therefore when it make effective
contractual clause to the supplier you will be
sanctioned with term a wider 90 days to 120 days
period of payment. Such resources are used by the
company to cover late delivery orders to
customers.

The manager of the financial business unit, said

that in his area, the processes have been properly
handled and warned when dangerous situations
are detected.