...the advantages Blades could gain from importing from and/ or exporting to a foreign country such as Thailand are comparative advantage theory and the imperfect markets theory. Since business is dwindling down in the United States for Blades, Blades does not have comparative advantage in the United States anymore. If Blades were to export Blades to Thailand it would gain a comparative advantage because roller blades are not as penetrated in Thailand as they have in the Unites States. Blades could even gain a bigger profit if they were to export roller blades to Thailand because people who are looking for luxurious items would be willing to pay top dollar for roller skates. The imperfect markets theory has to do with conditions where factors of production are somewhat immobile. In the United States production of roller blades has started to become immobile. If Blades where to maximize on Thailand’s resources to reduce their spending on building roller blades the company would be saving itself more capital, therefore increasing it’s profit. 2. Some of the disadvantages Blades could face as a result of foreign trade are for one the company is in its infancy and it is a relatively small company. Since the company is in it’s infancy it might not be safe for it to start foreign trade for at least another two years, in this time the company would become more established and well known and have more capital. If it were to venture into foreign trade to Thailand, Blades could be exposed...
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...development, especially when the business within the country is facing many obstacles. For Blades Inc., the strategy of importing raw materials at cheap cost from Thailand and exporting roller blades to Thailand's market is viewed as a creative and useful idea in order to improve the unfavorable business condition of Blade in its host country, America. This policy suggested by Ben Holt, the company's CFO, is expected to likely bring significant benefits to the company and its shareholders. However, opportunities always come with challenges. The risks for international trade need to be carefully considered to ensure the effectiveness of the import from and export to Thailand. The advantages and disadvantages that Blade could gain from importing from and exporting to a foreign country such as Thailand will be presented in the following manners: a. Advantages Blade could gain from importing from and/or exporting to Thailand As a financial analyst for Blade, I suggest there are two advantages from exporting to and importing from Thailand's market: increasing domestic competitiveness, and sales and profits (Ashish, n.d.). This policy will increase domestic competitiveness, which can dramatically improve the competence level of Blade in the eyes of the opponents. The biggest benefit is clearly shown, as the company can import/export products from/to Thailand at a much lower cost. If the company can have a smooth negotiation with suppliers and distributors in Thailand, the profits...
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...In the Blade’s case chapter 1 is about a U.S. based company that has been presented with a dilemma of expanding internationally. This company produces a single product which is rollerblades. The company a few years back was very successful and reported huge sales. This has now changed with annual reports and stock price going down. The CFO of this company or Chief financial officer has made all cuts, possible without affecting the quality of the product. The company is now also faced with decision of continuing to penetrate in the U.S. market and consider importing parts. Many companies have used this strategy and it has proven to be successful. CFO in this case was considering Thailand because of its weak economic state would allow for the purchase of rubber or plastic components at a cheap price. This is caused from the weak currency to the U.S. dollar exchange rates with Thailand. The CFO however was also looking to improve the U.S. weak company sales and start exporting to Thailand. The company knew their competitors were importing however very few exported the roller blade. This would also give them an exclusive market that presented few competitors. In the long run the company if sales in U.S. market still did not rebuild a subsidiary firm could be established and penetrated the Thailand market. First I would like to relate the case to chapter 1 in the book on “How firm engage in International Business (Madura, pg 8). By starting in Thailand there are the types of business...
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...Explain. Gillette did not focus too much on product innovation until several years later. There was no need to focus on innovation because they dominated the market for so long with no new competitors in the industry. It wasn’t until later on that Gillette started working on product innovation when a competitor entered the market. In 1962 an English firm named Wilkinson Sword entered the market with stain-less steel blades. Luckily for Gillette, they were able to buy out this competitor and remain dominate in the market. Even though they were able to buy Wilkinson Sword out this still had a negative impact on Gillette because it made their market share drop to $1.33 per share. There was several times where Gillette became a victim of its own success. The first is in its early years when they dominated the market with no competitors. When Gillette saw this continued success the company wanted to try something new so it decided to buy two business ventures unrelated to the personal grooming industry. The companies were the Toni Company and the Paper Mate Pen Company. This was a bad idea because the attention was then turned to these new products and the other product that was already performing so well was being ignored. As time moved forward a new competitor (Wilkinson Sword) entered the market and caught Gillette off guard. Another instance where Gillette became a victim to its own success is when Gillette began to flood the market with its own product innovations. In the early...
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... Hudson’s Bay Company and IBM: Virtual Blade Platform CASE 1 (a) What Is Server Virtualization? TAGS Computer utilization; data center servers; multiple operating systems; virtualization and data center capacity; economic and management results SUMMARY Server virtualization is a technique of optimizing computing resources by dividing individual physical servers into ‘virtual servers’ with their own environments and applications. It is one of the most common methods for companies to consolidate computing power, reduce costs, and become ‘greener’ as a result. The first video is a basic introduction to server virtualization. L=2:35. (b) Hudson’s Bay Company and IBM: Virtual Blade Systems Platform TAGS SUMMARY Strategic alliance with IBM; blade servers; SANS environment; Citrix; reduced “on the fly” maintenance; appliance computing; server consolidation; Director Software; predictive failure analysis; lower management costs Hudson’s Bay Company is a Canadian firm founded in 1670 as a fur trading company. Today Hudson’s Bay operates 500 stores, and is one of the largest retailers in Canada. The company turned to IBM’s virtualization platform to achieve cost savings, greater flexibility, and reliability, as it grew to provide customers with new services and products. L=7:21. First, watch the brief overview of virtualization, and then watch the IBM video about Hudson’s Bay Company and their experience with IBM blade servers and virtualization...
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...Introduction to International Finance Case Study Assignment credit 30% of the marks for the module are awarded for this case study. Date handed out: 21 March 2014 Maximum word length for reports: 1,500 (not including appendices) Report submission: 23 April 2014 You should produce a consultancy report rather than answer questions by questions. Blades, Inc. Case A. Decisions to Expand Internationally Blades, Inc, is a U.S.-based company that has been incorporated in the United States for three years. Blades is a relatively small company, with total assets of only $200 million. The company produces a single type of product, roller blades. Due to the booming roller blade market in the United States at the time of the company’s establishment, Blades has been quite successful. For example, in its first year of operation, it reported net income of $3.5 million. Recently, however, the demand for Blades’ “Speedo”, the company’s primary product in the United States, has not been performing well. Last year, it reported a return on assets of only 7 percent. In response to the company’s annual report for its most recent year of operations, Blades’ shareholders have been pressuring the company to improve its performance; its stock price has fallen from a high of $20 per share three years ago to $12 last year. Blades produces high-quality roller blades and employs a unique production process, but the price it charges is among the top five percent in the industry. In light...
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...prevents foreign companies from directly importing or distributing its products CloseShave has to use local distributors to sell its blades in Indonesia * Indonesia has a large rural population (65%), but thus far CloseShave has mainly concentrated its sales efforts in urban locations CloseShave needs to reprioritize its geographical focus if it has to attain faster than average growth in shaving among urban men * Islands of Java and Bali are the main centers of population, commerce and growth (both urban and rural) CloseShave would do well to concentrate on these markets, before it starts to go after other islands Company * CloseShave is a global market leader in shaving products and other consumer product categories. Blades and razors contribute a significant share of its total business (40% or $2B) * Asia Pacific region, and more specifically, shaving business in Asia Pacific is very important for CloseShave ($500M or 10% of overall business) * Currently, Indonesia’s shaving market is ~240M in terms of blade volume (CloseShave has a 48% market share and sells 115M blades) Customers * What are the different types…how do they buy? * Understand how the customer decides * The customers in Indonesia can be divided based on geography – urban and rural. * * Urban men have a high rate of shaving (80%) but low usage of store-bought blades (low shaving incidence rate, usage of store-bought blades vs. knives, and number of blades bought per year)...
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...pgs. 3-5 2. Description of Company------------------------------------- pg. 6 3. Strategic Plan/Focus----------------------------------------- pgs. 6-7 4. Situation Analysis--------------------------------------------- pgs. 7-11 5. Market Product Focus--------------------------------------- pgs. 11-13 6. Marketing program strategy and tactics----------------- pgs. 13-14 7. Financial Projections----------------------------------------- pgs. 14-15 8. Organization Structure--------------------------------------- pg. 16 9. Implementation Plan------------------------------------------ pg. 17 10. Appendix A: Biographies of Key Personnel------------- pgs. 18-20 11. Appendix B: Detailed financial projections-------------- pgs. 21-22 1. Executive Summary Heat & Clean, LLC Karen Akers, Jordan Capps, Alicia Collison Heat & Clean, LLC (referred to from hereon in as the "Company") was established as a Limited Liability Company on St Rd 52 in Lafayette, Indiana with the expectation of rapid expansion in the automotive accessories industry. The Company solicits financial backing in order to be able to introduce its new product (described below). Business Description The Company was formed in August 2011, as a Limited Liability Company under Indiana state laws and is headed by Karen Akers, Jordan Capps, and Alicia Collison. Heat & Clean was established in the Mid-West and we currently only sell our product online. Our Company currently employs 51 full-time...
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...has brought a company swimming in a red ocean, which means price war strategy, according to a bestseller book titled Blue Ocean Strategy that is written by W. Chan Kim and Renee Mauborgne. This situation influences the way a company evaluates its strategies and effectiveness regularly. Each company has a particular business culture, which is suitable only for the company in a specific industry. This condition may not be suitable when the industry changes or the company is acquired by another company at bigger size. There are some conditions that influence how companies take care of competitive markets. They include strong corporate culture, employees learning and development attitude, management long-term vision, situation in a particular market, and competitors’ strategy, to name a few. This condition occurs in Gillette, the leader in razor and blades market in the world, where they currently face the maturity of the industry and get stuck in the old-fashioned strategy. Many times, they commit a product innovation on continual basis as a means to position Gillette as a leading company in the razor and blades market. Unfortunately, their main competitor, Schick-Wilkinson Sword, also responds the competition by innovating products in terms of number of blades in a single razor. As Gillette makes more profits from the blade sales rather than initial razor purchase, the company needs marketing innovation rather than product innovation. Concerning this issue, this paper will elaborate...
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...the market for dry cell batteries and allied products. Having a good distribution network, the company wanted to utilize this strength by taking over the distributed of some consumer items. SITUATION ANALYSIS Ambassdor torchlight‟s national network of distribution comprised of 80000 retailers and stokists,They adopted the policy of “follow the leader” which was United Battery Manufacturers. They had marketed their private brand of blade known as “Best” with moderate success. They contacted Central Industries which had 2 brands of blades “Splash” which was made of Stainless steel and “Awake” which was made of Carbon steel. With a view of increasing their sales and utilize their distribution network in a best possible manner they should either go for marketing the products of other brand or may produce their own products as alternative. Hence the companies‟ sales manager Mr. M A Habib contacted Mr.Vikram Patel who is the MD of Central Industries. This industry is in manufacturing of blades for other organizations apart from that they had its own line of blades. Recently companies have come up with their new range of brand. Aggressive marketing by Central industries had achieved first time buying by the consumer; however they could not sustain the sales. This was attributed to the fact that the company had received complaints by the users that as many as two out of the five pack of blades were faulty. Central industries laid down a clause that they would terminate its contact they...
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...Case: 1 BLADES, Inc. Case Question 1: How could a higher level of inflation in Thailand affects Blades (assume U.S. inflation remains constant)? Answer: Higher level of inflation in Thailand can affect Blades. Due to inflation in Thailand foreign goods will become cheap. Again inflation will increase in an increase of imports and at the same time exports will go down. As a result imports of rubber and plastic components from Thailand for Blades Inc. will suffer and it will increase their production cost. On the other hand due to inflation in Thailand customers will get products from Blades Inc. at a lower price relative to others, which will increase their (Blade Inc.) export to rise. Eventually their sales will increase. Question 2: How could competition from firms in Thailand and from U.S. firms conducting business in Thailand affects Blades? Answer: The main competitive advantage of Blade Inc. in this case is that they conduct their business (both export and imports) from Thailand in Thai Baht (Thailand’s currency). The other competitors who exports in Thailand invoice their exports in U.S. dollars. On the other hand because of competitive advantage of Blade Inc. allows importers to continue business without less consideration about paying different amounts due to currency fluctuations. In case of export Blade Inc. has an advantage of providing quality products and flexible pricing strategy, which gives them a good position in Thailand. Question 3: How could...
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...1) The advantages that Blades can gain by exporting to foreign countries are: * Increased sales and profits Selling goods and services to a market the company never had before boost sales and increases revenues. Additional foreign sales over the long term, once export development costs have been covered, increase overall profitability. * Gain global market shares By going international, companies will participate in the global market and gain a piece of the huge international marketplace. * Lower Per Unit Costs Capturing an additional foreign market will usually expand production to meet foreign demand. Increased production can often lower per unit costs and lead to a more efficient use of existing capacities. * Potential for company expansion Companies who venture into the export business usually have to have a presence or representation in the foreign market. This might require additional personnel and thus lead to expansion. * Sell excess production capacity Companies who have excess production for any reason can probably sell their products in a foreign market and not be forced to give deep discounts or even dispose of their excess production. * Product life cycle expansion Many products go through various cycles namely introduction, growth and maturity before declining signifying the end of their usefulness in a specific market. Once product reaches its mature stage in a given market, it can be introduced to...
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...the advantages Blades, Inc could gain from importing and/or exporting to a foreign country such as Thailand? An advantage of importing from a foreign country is to meet demand for an imported product that consumers perceive is of superior value to comparable brands produced at home. Also, Blades can take advantage of the fact that some products can be produced more inexpensively elsewhere and therefore are cheaper when imported. Moreover, The mode of transportation for imported goods can involve lower costs than shipments within the US. 2) What are some of the disadvantages Blades could face as a result of foreign trade in the short run? In the long run? Some of the disadvantages include: challenges of a long distance trade and as such it becomes difficult to maintain close relationship between the buyer and the seller. Also, each country has its own language. As foreign trade involves trade between two or more countries, there is diversity of languages. This difference in language creates problem in foreign trade. Moreover, foreign trade involves preparation of a number of documents which also creates difficulties in the way of foreign trade. Finally, the decline of the company's competitive advantage as competitors enter the market. 3) Which theories of international business described in this chapter apply to Blades, Inc., in the short run? In the long run? There are a couple of theories that were mentioned in this chapter that can apply to Blades, Inc. In the short...
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...Gillette is a company popularly recognized for its razors and blades and as a pioneer in wet-shaving technology. Even with stiff competition, it holds a commanding share in the worldwide market. The company has been long known for its innovative products and marketing strategy. The company continues to grow slowly all over the world. With emerging technologies in the razor and blade industry and increasing customer reluctance to pay a higher price, it is definitely a challenge for Gillette to sustain its strategic position in the market. Since its inception in 1901, Gillette enjoyed a strategic position in razor and blade market with its innovative products with no serious competition until 1962, when Wilkinson Sword introduced its stainless steel blade. After 1962, Sword-Schick became Gillette’s primary competitor. Over the years both Gillette and Schick focused on improvements in razors and each of them introduced their own line of products. When Gillette introduced Mach3 (3-bladed razor), Schick responded with its Quattro (4-bladed razor). Gillette has always been known for its innovation and the peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Schick is yet to respond to Fusion. Now under the ownership of Proctor & Gamble, Gillette faces a saturated US market that fluctuates only when new products are introduced. Going back to the way Gillette Company was founded; in 1895 King Camp Gillette had a brilliant idea when he was shaving...
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...1. What are the advantages Blades could gain from importing from and/or exporting to a foreign country such as Thailand? First of all, Blades, Inc. will lower its cost of goods sold from importing from Thailand, leading a increase in the net income due to the fact that the inputs from foreign countries such as Thailand are cheaper than they are in the US. One of the reason making Blades, Inc. ‘s prices to be one of the highest in the roller blade industry is not importing rubber and plastic from foreign countries that their competitors are already doing it. Furthermore, there will be a long rage plans in Thailand that they can seek the opportunities of creating connection which some Thai suppliers. When the chance comes, Blades will be the first firms to sell roller blades in Thailand which its has a huge competitive advantage. 2. What are some of the disadvantages Blades could face as a result of foreign trade in the short run? In the long run? Entering the international business world will bright some potential disadvantages to Blades, Inc. Current fluctuations in the Thai baht is the first problem. Without adjusting the price of the Thai suppliers, the cost of the inputs can become more expensive over time if the bat appreciates. However, if Blades start selling rolling blades in Thailand, the sales would increase in dollar if the baht appreciates, even if Blades does not increase its prices. And the opposite will also be true, when dollar appreciate, it will decrease...
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