29. September 2011
Baxton Technology Company manufactures surface automotive hoists which are used by garages, service stations and other repair shops to lift cars for servicing. Because of its design, quality of workmanship, safety features, ease of installation and five-year warranty, Baxton Lifts achieved a reputation as the “Mercedes” of the hoist industry and is considered a leader in automotive lift safety in Canada and United States.
There are sixteen firms competing in the automotive lift market in North America. AHV Lifts and Berne Manufacturing together held near 60 percent of market. Baxton Technology has two competitors that manufactures scissor lifts. One is the AHV Scissor Lift, which had a different lifting mechanism without safety locking features and was sold for about 20 percent less than the Baxton Lift. The other competitor is Mete Lift, sold for about 5 percent less than the Baxton Lift.
Baxton Technology has used three types of distribution channels: a company sales force, Canadian distributors and a U.S automotive wholesaler. The company’s success to date is based on a strategy of offering a superior product that is primarily targeted to the needs of specific customers. The strategy stressed continual product improvement, quality workmanship and service. And personal selling was a key part of the strategy as well.
In order to continue a fast growth of the company, the Baxton Technology will meet two problems. One is developing its business in the European market and how to go about doing this. It appears there are three main strategies to choose from: a licensing agreement, a joint venture option or a direct investment. Additionally, choosing which country to develop still needs to be taken into consideration. The second problem is developing the company's business in the U.S.A. If the American wholesaler could push the Baxton Technology hoists, sales will be increased, though it might also be possible to establish sales offices of the company's own in the United States, as another way to increase sales.
|Strengths |Weaknesses | |Plentiful resources, high-quality product |Relatively minor presence in the U.S. | |Experienced salespeople and production managers |Limited experience with the European market | |Opportunities |Threats | |Few large manufacturers in Europe |Current rivals with their sights set on Europe | |Licensing offer from experienced company |Refusal from Bar Maisse to embark on a joined venture |
American Sales Office
Though opposed by the American wholesaler, Baxton Technology could very well establish a sales office in New York, which would allow the company to cover a large part of the east coast in their marketing efforts. However, the company is already making money off of the American population, and even though the U.S. Makes for a large market, western Europe is almost as large and does not require us to compete with companies that are presently aiding us. On the other hand, our company has far more experience with the Canadian and American markets, and unlike in the case of a licensing agreement or a joint venture, our company would retain almost all of the profit.
While licensing our product to the French company is basically free of risk to ourselves the return will not be as high as it might be if we invest more resources into Europe as a market. Our ability to influence the operations of Bar Maisse will...