Ach Challenge 1 – Entering International Trade
1. Introduction
This case study analysis is based on the case “ACH Challenge 1 – Entering International Trade”. American Colonial Heritage Inc. (hereinafter named “ACH”) is a US American producer of furniture that presently only sells its products in the USA and Canadian markets and does marginal exports to the UK. However, these exports have not proved to be successful so far. The company is fictional and the strategic decision to be taken during the case study analysis is dated back in 2006. Thus, no developments after this year are the basis of this analysis. Furthermore, the case is examined from the point of view of Ms Alexandra Jones who is a member of the International Expansion Team at ACH.
2. Problem Statement
ACH is in the position of facing stagnant demand in its present markets. In order to increase the sales volume, diversify the revenues and pursue a more international strategy, it has been decided by the management board that the company’s products shall be exported and sold in a European country . Additionally, the management board specified that the products shall be exported to Portugal, Switzerland or Denmark. The potential economic effects of an exporting strategy can be seen in figure 1 which indicates that in the “Foreign” market an additional profit “B” can be generated. Figure 1: Profits in the Home and Foreign market: National exporting Firm (Source: Brakman et al (2009), p. 142)
Summarizing, it is the task of Ms Jones to select of the above mentioned countries and propose it to the management board as a potential export market in order to maximize the above mentioned additional profit “B”.
3. Analysis
In order to propose the most attractive country to the management board of ACH, a thorough analysis of the internal environment of ACH as well as the external environment in the individual countries has to be conducted.
3.1. Internal Environment
ACH was founded in 1926 Charlotte, North Carolina by Peter G. Collins and
This case study analysis is based on the case “ACH Challenge 1 – Entering International Trade”. American Colonial Heritage Inc. (hereinafter named “ACH”) is a US American producer of furniture that presently only sells its products in the USA and Canadian markets and does marginal exports to the UK. However, these exports have not proved to be successful so far. The company is fictional and the strategic decision to be taken during the case study analysis is dated back in 2006. Thus, no developments after this year are the basis of this analysis. Furthermore, the case is examined from the point of view of Ms Alexandra Jones who is a member of the International Expansion Team at ACH.
2. Problem Statement
ACH is in the position of facing stagnant demand in its present markets. In order to increase the sales volume, diversify the revenues and pursue a more international strategy, it has been decided by the management board that the company’s products shall be exported and sold in a European country . Additionally, the management board specified that the products shall be exported to Portugal, Switzerland or Denmark. The potential economic effects of an exporting strategy can be seen in figure 1 which indicates that in the “Foreign” market an additional profit “B” can be generated. Figure 1: Profits in the Home and Foreign market: National exporting Firm (Source: Brakman et al (2009), p. 142)
Summarizing, it is the task of Ms Jones to select of the above mentioned countries and propose it to the management board as a potential export market in order to maximize the above mentioned additional profit “B”.
3. Analysis
In order to propose the most attractive country to the management board of ACH, a thorough analysis of the internal environment of ACH as well as the external environment in the individual countries has to be conducted.
3.1. Internal Environment
ACH was founded in 1926 Charlotte, North Carolina by Peter G. Collins and