SUMMER SEMESTER 2011
PROFESSOR STEPHEN COURTER
Exporting has become a very important business strategy nowadays. In order for firms to expand to the international market, and also to maintain and grow their share of market in whatever industry they are in, depending on their goals and objectives, any company must at least explore this possibility. A few and important advantages might come into place, in that they can extend their sales potential of their existing products, increasing margins through a larger customer base. Also, these small to large businesses can consolidate by gaining global share of market, they can reduce their dependence on their existing markets, enhancing competitiveness, making their business models, from production of consumer goods, to offering services, a lot more efficient. Entering a foreign market forces these companies to modify their current products, developing a whole new set of promoting these products, as well as the package and presentation they come in. By enhancing in this strategy, sometimes these businesses come up into subordinating short term profits to the potential of long term gains, if managed effectively. Compared to large firms, small / medium firms are relative, in that they wait for new markets to come to them, even if they sometimes are not prepared to respond to these opportunities. Throughout the following analysis, we will talk about a small family business, which chose and waited for the market to come to them, and managed the exporting business effectively: Cretors & Company. Cretors & Company was founded in 1885, when their founder, Charles Cretors, patented a popcorn machine, exporting it right from the beginning. Throughout the years, this company has grown to be a leader in the $10 billion U.S. concession business. With over 10 product lines, including industrial level equipment, small and large concession poppers, all up to hot dog and cotton candy equipment, Cretors has found an amazing business model that are leading them to be recognized in the international market. They focus in making specialized products, which is a competitive advantage to them. As we all well know, popcorn is mainly consumed in the US, and as the case states, is mainly “an American product, like pizza is an Italian product”. Their main objectives and goals were set from the beginning, which made it easier to have a clear picture of their internal and external environment. Creator reacted positively when the international market made an approach and showed up, in order for them to provide all their products around the world. They knew, internally, how to dominate the movie theatre business well, through simple visible popcorn maker displays. Once they had their local business dominated, they were well prepared and ready to face the external environment overseas, where they had no influence whatsoever, and were pioneers in the business. They had little time to get acquainted, and many future businesses that they could construct. Getting acquainted with different business cultures, way of living, negotiation skills and requisites, is not an easy task to do. Western Europe, Canada, Mexico and Romania being their main customers, had different product specifications that they well needed. International sales for Cretors were 36% of their total sales. What does this tell us? External Analysis was thoroughly made, and results of this analysis were well implemented. This percentage of their sales was mainly constituted by commercial machines for movie theatres abroad (US Movie Chains opening on these markets). Also, they knew that the international market demanded industrial machines. One customer base started feeding another customer base. Movie theatres brings popcorn to customers, which is a new product to them, which then they could find from a snack manufacturer in a grocery store (made by Cretor’s Machines)....