1-Which market should ABC choose (Berlin, Germany or Milan,Italy) and why? You could use an opportunity/risk comparison gridor matrix or other scanning approaches to aid in yourjustification. Use case specific references and you may createnumbers to justify your recommendations.
2. What organization form should ABC choose to enter thismarket? Consider the positive and negatives associated with thefollowing options: License your form fit technology; create acompany owned store in the selected country (fdi); use adistributor to get your product in many stores in the selectedcountry. Why is the selected entry mode you chose best for ABC?Briefly discuss the coordination and control issues associated withthese forms
3. In an effort to mitigate market entry risk, how could ABCgain important future demand information regarding the acceptanceof its jeans in the chosen market? Comment how you could usedifferent techniques (demographics, the Internet, market research,trade shows, analytical tools) to help assess the future demand foryour jeans.
4 Should ABC target the same customers with the samevalue proposition as it does in the US? Why? Why not? Whatmodification could ABC make to its jeans or in the positioning ofits jeans to be viewed as being more locally responsive in theselected European market.
5. What marketing services could ABC obtain from outside vendorsto more quickly market its jeans in the selected European country?With whom and why? How might ABC use the Internet in its marketingeffort?
6. How might ABC create an efficient and cost-effective supplychain in getting Jeans from China to Europe? What type oforganization might help ABC in the shipping process and whatfunction could they perform? Cite advantages and disadvantages ofshipping directly from China or shipping through New York? Whichwould you choose and why?
7. Given the likely possibility that the US will place anadditional 20% tariff on Chinese exports into the US in the nexttwo months, should ABC seek a second manufacturing location now?Why? Why not? Longer term, if ABC were to shift production toanother country, what country should they choose? Why? Should ABCkeep production in China after opening up this new manufacturinglocation? Why? Why not?
8. How should ABC increase the efficiency of its cash managementprocess and improve profits via creative internal pricing? You aretasked with simplifying your cash management operations in China,Mexico, Canada, US and now Europe. How might you set up a processto simplify your subsidiary financial transactions? Draw a pictureto illustrate efficient cash transfers. Also you are asked tominimize your overall corporate taxes. Assume corporatetaxes in Europe are 40% and those in the US are only 10% and youhave flexibility in establishing your cost of goods sold in theUS. Within reason, what might you do to minimize youroverall corporate taxes in transferring goods between the US andEurope?
9. What potential areas of price escalation occur during yourjeans’ journey from China to the shelves in a European Store? Citethe value added that these potential intermediaries might provide.What strategies might you use to minimize price escalation forABC’s jeans in Europe?
10) Who should run the European store? Discuss the advantagesand disadvantages of having the following people run your Europeanstore: Your New York City store manager; A store manager of acompetitor from the same European City; A second in command fromyour Canadian Store?
Case - General Description
ABC Jean Company (ABC) is a US firm that sells custom designedblue jeans. A key selling attribute is that the ABC jeans fit welldue to a unique phone app that uses artificial intelligence tocalculate body measurements from a cell phone picture. Your US tagline is “Right fit, Every Time.” The digitized customermeasurements are sent to an unrelated Chinese manufacturer (XYZ)company. Their software translates the measurements and producesthe customized jeans which are sent to ABC’s New York CityWarehouse. ABC branded jeans are then sent to ABC owned stores inToronto, Canada, Mexico City, Mexico, and to U.S. stores in NewYork and Los Angeles.
ABC’s president, Joe, is seeking to expand its blue jeansoperations to include a European city in 2021. A previous study hasidentified the top two candidate cities are Milan, Italy and BerlinGermany. Joe wants to act quickly while there are few competitorswith similar technology. Joe has many questions and concerns thatneed to be resolved before ABC can proceed.
These include but are not limited to: 1. Which market should ABCchoose (Berlin, Germany or Milan, Italy)?; 2. What organizationform should ABC choose to enter this market?; 3. How could ABC gainimportant future demand information regarding the acceptance of itsjeans in the chosen market?; 4 Should ABC target the same customerswith the same value proposition as it does in the US? 5. Whatmarketing services could ABC obtain from outside vendors to morequickly market its jeans in the selected European country? 6. Howmight ABC create an efficient and cost-effective supply chain ingetting jeans from China to Europe? 7. Given the likely possibilitythat the US will place an additional 20% tariff on Chinese exportsin the next two months, where should ABC seek a secondmanufacturing location? 8. How should ABC increase the efficiencyof its cash management process and improve profits via creativeinternal pricing? 9. What potential areas of priceescalation occur during your keans journey from China to theshelves in a European store? 10) Who should run the Europeanstore?
As the International Marketing Manager you are charged with thistask. In answering the below questions, provide your companyspecific analysis including alternatives considered and tools youmight use (could use hypothetical numbers that support yourposition) that ultimately help Joe in making his market decisionson country selection, mode of entry, marketing channels, physicalmovement of goods, etc. Joe only has two hours before he gets on aplane so use this time efficiently to answer all his questions inyour briefing memo. To simply your analysis, disregard Covid-19complications in your answers below.