Refer to the case study of BabyFreedom: Stakeholders and Strategy. Kindly answer the following question

2. While the Walmart contract is large and would result in greater sales, there are many important quantitative and qualitative factors to consider, including strategic fit and stakeholder perceptions.

a. Using the assumptions given to BabyFreedoms management team and an initial acquisition cost of $25,000, construct a pro forma income statement incorporating the effects of accepting the Walmart contract. Use the mandated Walmart gross margin of 29.8%, and assume that BabyFreedom must maintain the same gross margin percentage for all revenues (in other words, it cant charge a different, higher price to its medically necessary or natural clothing customers).

b. The initial report stated that theres a positive NPV for the first five-year contract period with Walmart. Verify this by using Excel and the pro forma income statement constructed in 2(a) to calculate the NPV value, given a 40% tax rate and 6.25% weighted average cost of capital.

c. Michael Porters generic competitive strategies classify companies by how those companies pursue a competitive advantage across a chosen market. Which of Porters three strategies (cost leadership, differentiation, or focus/niche) does BabyFreedom use? Which competitive strategy does Walmart use? Would a contract between the two companies be a good strategic fit? Why or why not? Do you think BabyFreedoms products in Walmart stores will alter how its brand is perceived? Explain.

d. BabyFreedom has a reputation for being a company with a strong sense of corporate social responsibility. BabyFreedoms natural (nonmedically necessary) clothing customer base is strongly oriented toward issues of sustainability, social responsibility, and ethical corporate behavior and is very focused on the companys reputation. Jennifer has stated that she doesnt want to alter her companys mission or values. Do you think a supplier relationship with Walmart reflects those values? Why or why not?

e. Beyond questions of strategic fit and company mission, are there other qualitative factors that should be considered in the decision? If the RFID technology wasnt an issue, do you think BabyFreedom should accept the Walmart contract? Why or why not? List and discuss alternative partners or sales channels that BabyFreedom could use to grow the company.

3. BabyFreedom is positioned as a socially responsible company producing high-quality natural clothing. List the stakeholders affected by the decision to accept or not accept the Walmart contract and implement basic RFID technology, and identify how they would be affected by the decision. 4. Based on your analysis, what is your recommendation regarding whether or not to accept the Walmart offer?

4. Based on your analysis, what is your recommendation regarding whether or not to accept the Walmart offer?