Solution to Supplemental Case: Ranger Supply Company
This case is simply intended to force students to think about reasons for or against international business. As with most cases, there are no perfect solutions, but there are some general conclusionsthat can be drawn.a.Some of the more obvious factors to consider are:1.Competition. There are similar distributors in Canada, whereas Eastern Europe may not havean organized system for the distribution of office supplies. Yet, some European firms (likethe British competitor) may attempt to pursue the Eastern European market.2.Transportation Costs. The costs of transporting office supplies to Eastern Europe would behigh, placing Ranger at a relative disadvantage compared to other European firms.3.Export Barriers. Either country could impose tariffs or quotas on the exports. Canada is lesslikely than Eastern European countries to impose such restrictions.4.Marketing Characteristics. Ranger would have an easier time adapting to the Canadianmarket. The information about Eastern Europe firms would be more limited. Thus, Ranger would be unable to identify many of the firms that may need office supplies, unless itexpended funds to search for newly opened retail stores. Furthermore, these stores may prefer to deal with a supplier that is not so distant. For example, they may have connections withWestern Europe suppliers. Since Ranger has no experience in Eastern Europe, it may be at adisadvantage in attempting to penetrate that market.5.Exchange Rates. The future exchange rates of the Canadian dollar and currencies of EasternEuropean countries could be relevant. Even if Ranger plans to invoice the exports in dollars,the future exchange rates will influence the amount of foreign currency needed by the firms inCanada or Eastern Europe to purchase the supplies. Therefore, foreign demand for thesupplies will be influenced by the exchange rates. The future Eastern European currencyvalues are more uncertain. In fact, the...
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