A Case in Global Marketing Strategy Background Statement Buxton Technology is a relatively small Canadian firm selling a high quality, safe, automotive hoist to the North American automobile aftermarket industry.
Since it's founding in 1990, the company has continuously grown and now constitutes -?2% of all automotive hoists sold in North America. While the company has shown steady growth, Mark Buxton, the founder of Buxton Technology, is looking at ways to increase sales, and is open to a number of alternatives proposed by his marketing manager, Pierre Agony. Problem StatementHow can we maintain our fast-paced growth and continue to increase our market share given the feasible alternatives at hand? Particularly, Should we adopt a European Penetration Strategy, or focus our efforts in the high untapped potential in the US market? Option 1 Accept the proposal of Bar Masses to enter into a licensing agreement in which the French firm Bar Masses would obtain a 3 year manufacturing licensing right for the Buxton Lift in Europe. In exchange Bar Masses would pay Buxton a 5% royalty fee off of gross sales of the lift. Advantages: * This plan is a very risk-averse way of getting penetration into the European rake.
Bar Masses would take on all of the risk associated with production and marketing of the product in Europe, and Buxton would receive 5% royalty fees. * Any revenue generated would be purely incremental, as there would be no operational costs to Buxton Technology. * Assuming Buxton Lift could generate a similar market share as they have in the US, annual incremental BIT would be $574,105 * While Bar Masses is a relatively small firm, it has a very good reputation for quality products, and is a good compliment to Sexton's developed brand image in North America.Disadvantages: Buxton would have little control over their product, and would have to rely on Bar Masses to keep standards high in order to maintain the Buxton image of quality and reliability.
* Buxton would learn relatively little about the European Market as they would have very little insight into the Bar Masses process. This means at the end of the 3 year licensing agreement that Buxton would essentially be in the same place it is in now. * Given Bar Mashie's unfamiliarity with the product, revenue estimates from royalties are highly unreliable. The true impact towards company growth from this option is highly unknown.Quantitative Implications Market Share I Profit I Buxton Technology By hotelier Buxton Technology: A Case in Global Buxton Technology is a relatively SMS. Automotive hoist to the North Aimer.
Founding in 1990, the company has all automotive hoists sold In North A growth, Mark Buxton, the founder of sales, and IS open to a number of alt How can we maintain our fast-peace share given the feasible alternatives European Penetration Strategy, or of the LIST market? Option 1 Accept the proposal of AR Masses etc French firm dark Masses would obtain Buxton Lift In Europe.
