Please note that marks will be deducted for referencing errors. (approximate 600 word limit). The purchase by Neptune International Ltd of the China South Dairy Co, a large dairy distributor network...

assignment



Please note that marks will be deducted for referencing errors. (approximate 600 word limit). The purchase by Neptune International Ltd of the China South Dairy Co, a large dairy distributor network with wholesale outlets and networks throughout South East China, has led to the parent company looking to develop vertical supply chain security by purchasing dairy producers in Australia. The Neptune International CFO for Dairy Mr. Davis Nicks is travelling to Guangzhou to hold further meetings with the Chinese born CEO of the newly acquired subsidiary and his senior management team. Ahead of his trip Davis has requested that you provide him with a briefing regarding the following: 1. Part of Davis Nicks objectives during his trip to China is to assess the veracity of the budget sales estimates for baby infant formula provided by China South on which Neptune are basing the proposed purchase of Kiewa Milk. Davis would like you to provide a critical review of the risks and assumptions underpinning the unit and AUD dollar sales projections provided by China South. What are the dangers inherent in Neptune’s proposed purchase of the Australian milk processing business based on estimates of Chinese domestic sales?   (10 marks) 2. Davis also wishes to understand how the concepts of ‘guanxi’ and ‘power distance’ will impact on his interactions with the current China South DairyCo executive who will be reporting directly to him and, in particular identify any difference between Chinese and Western approaches to management accounting and budgeting that Davis may encounter in his coming dealings with Chinese-based and trained accounting staff.  (10 marks)