Palliser Furniture Ltd.
...re ã Mexican is a good location for supplier and northern transportation ã Strong entrepreneurial and industrial mentality, excellent infrastructure ã Mexican leather has low sales volume ã Manufacturing new products ã China - the giant begins to rise Have a huge market ã Inexpensive supply of workers to reinstate their competitive cost ã Cheap labor cost ã Challenging for offshore firms to compete for North America sales ã Increase the import product from China to North America sales ã Quality had risen on a certain price, it was difficult to find a difference between furniture produced in China and Canada ã Palliser World Trade had developed a solid import business in Chinese furniture and maintained good relationships with over 25 large Chinese furniture manufacturers ã Others Low entry barriers ã Different industry standard in international markets ã Strong competitor for leather furniture market with contemporary designs and colors ã Exchange rate of dollar was not steady ã FACTORS ADVANTAGE DISADVANTAE 1 Armfs length Purchase (1) Palliser would be able to do better marketing, recruitment, and sales by working alongside a company that is already established, and at the same tine maintain full control over they own business structure and identity.. (2) An armfs length purchase would allow Palliser access to a wider pool of customers, which would include the current customers of their own and those of the already established company. (3) It will be much better to come up with new methods and ideas when two companies work together. (4) Palliser gets more experiences form the last generation. (5) Because they are all family numbers, they can understand and help each other in the business. (6) Increase the growth, size and role of the third generation. (1) The company will get an insight into Palliser furniture designs, which can be used against then in the future. (2) An armfs length purchase would expose Palliser customer to another manufacturer. (3) A disadvantage of entering new market this way is when the other company is doing things to hurt Palliserfs customer base there would little that could be done by Palliser. (4) They will have less ideas and solution to manage the company. (5) It uses the same structure and it is hard to improve. (6) Palliser will have less investment form the outside investor. 2 Subcontract (1) Palliser entering new market by this method would let it share the risks involve with a company that would be much more familiar with the social environment, as well as the consumersf taste for future. (2) The Canadian furniture manufacturers mainly concentrate on the production side of the business, and lack marketing skills compared to their foreign competitors, subcontract would give them the opportunity to learn modern marketing skill of the industry. (3) This would bring together good production techniques of Palliser with sound marketing strategies of another company. (4) NAFTA affects lower labor cost, big market. (5) Reduce Palliserfs MFN tariff on furniture part and raw material. (6) Palliser enters global market. (1) I will be difficult for Palliser to guarantee customers quick delivery, which it part of its marketing plan, while subcontract with another company. (2) Final decisions must always be made catering to the arrangements of another company. (3) Palliserfs management would not have total control over how the business is operated. (4) Less power and value (5) Less Profit (6) Increase the competition 3 Licensing (1) This method of entering new market would allow only Palliserfs brand and design to be sold to customers. (2) Palliser would not have to pay for the marketing in this method of entering into new markets; this cost will be on the licenses. (3) If things are not going according to what is expected, it is relatively easy to get out of this kind of agreement. (4) Palliser required few resources particularly capital. (5) Potentially can get agreement with a firm having the missing resources. (6) Palliser has high return on investment. (7) Palliser could enlarge its brand name in another market. (1) Having a company use its brand name and design Palliser can be held legally responsible for any wrong done by the licensee company. (2) It is easy to have the companyfs reputation and name damaged by workers of the licensee company not follow Palliser system. (3) It es hard to manage in another country (4) It crates more competitors for Palliser. (5) It is hard for Palliser to control manage in another country. 4 Joint Venture (1) Sharing the risk of doing the business with partner. (2) More capital and resources provided by the partner that you are working with. (3) It is more expense because your combining your firms together, your partner can help you out and vice versa when needed. (4) Popular method of expanding business. (5) Contributes assets (6) The firm shares any income lass with the partners. (7) Increasing the firmfs marketability. (1) Sharing of profits. (2) You must e sure that you can trust your partner to consider you best interests as...