Reference no: EM133338701

Question: Donald Dudd is the owner of a premium artisan glassware manufacturer in Poland called « Fragile Inc ». Fragile Inc has 41% market share in the champagne flute market in Europe and was recently appointed as the official supplier for the British Royal family.

Donald Dudd is an ambitious businessman and sets his sights on expanding beyond Europe and into the lucrative US market.

He arranges a business trip to New York, Florida and California to meet with several important distributors and decides to bring along his daughter, Lena, who has studied English at university in Warsaw. He packs several boxes of glassware to show potential clients, although he did not realise that he would be charged customs duties at the airport upon arrival.

As the additional costs were unexpected, Donald is furious about the customs duties and goes to the airport lounge to telephone his chief financial officer try to arrange a transfer of funds to cover the unexpected costs. Meanwhile, Lena approaches the customs officer to try to find a solution.

She asks if there is any way they can avoid the custom's duties but the officer shakes her head, instead she helps her fill out the paperwork. Lena leaves a crystal vase for the officer as a token of her gratitude as she leaves.

The next day during meetings, Donald realises that the US buyers are particularly price sensitive and that many are already stocking a competitive brand "Transparent & Co". Coincidentally, Transparent & Co are produced not far from Donald's headquarters and he knows the owner, Tom Pip. Donald reaches out to Tom Pip to ask which customers he has in the US so that he can concentrate on others. Tom Pip sends over the list and asks what price Donald is pitching his glassware at?

For the majority of clients Donald sets his prices at exactly the same price point as Transparent & Co. However, he refuses to supply one of the retailers on Tom Pip's list because he wants to be the only European brand in the store. Donald also offers to sell his glassware to the biggest retailer Fair Price for below cost for the first year in order to get into the market, he figures it's a way to break into the market earlier! The CEO of Fair Price then offers to take them out to lunch to celebrate, presenting Donald's daughter with a nice leather wallet as a gift for her help in translation.

Having made the deals, Donald returns to Poland and begins fulfilling orders. The first shipment goes out 3 weeks later and he takes out a valued policy through an insurance broker. In filling out the paperwork Fragile Inc does not disclose the true value of the products or that some of the glassware were display items that had already been used. During the voyage the ship encounters a fierce storm. When the shipment arrives, some customers refuse to pay because they say some of the glassware is chipped and scratched. Fragile Inc calls their insurer to make a claim.

Question: Identify and analyse all of the issues presented in this fact scenario.