Why do this problem?
The problem naturally brings in the formula for a circle and it could be used to introduce this formula.

The problem requires knowledge and understanding of the formula for the distance between two points, the use of Pythagoras Theorem and algebraic skills in solving simultaneous equations.

The problem introduces the concept of orthogonality which is very important in higher mathematics.

Possible approach
Depending on their experience of problem solving and thinking for themselves, if there is some lack of confidence then the class could first discuss how they are going to set about solving the problem. This should be in the context of the teacher making it explicit that the learners should be developing problem solving skills and growing out of dependence on the teacher to indicate methods to use.
The learners can then work independently having planned how to work on the problem.

Key questions

What information is given in the question?

What are the unknowns? Have we assigned notation to refer to the unknowns?

Can we use the given information, and our mathematical knowledge, to write down some equations?

What methods have we used in the past to solve similar equations? Are those methods useful here?