Cast Study Eldora Company
1.) Eldora’s objective should be to get out of the domestic strategy, and move their facility to Asia. Once there in Asia they would get low labor cost and distribution cost. Since they now have the intelligence on design and product trends in Europe, they need to focus on distributing their bikes throughout Europe, because of the joint venture with Rinaldi. 2.) The function of the company that can be relocated in this expansion effort; is Eldora’s strategy to copy the features of the most expensive mountain bikes that aficionados rode into bikes that it sold to mass merchandisers between $100-$200. The company’s competencies are it’s reverse engineering abilities as well as its logistical and production capabilities. Eldora also believes that their customer service was second to none. 3.) The first alternatives (pros) are lower labor costs. The (cons) are that they are now further away from Boulder which is why they didn’t go to Asia because they wanted to keep manufacturing, marketing, and product development on one campus, which is the center for bike enthusiasts. The second alternatives (pros) are that they are taking less of a gamble. Instead of just jumping right into the Asian market there going to scope around for potential joint venture partners and maybe strike another deal like the Rinaldi, where they constituted 20% on sales. They will have a better understanding of the local conditions and laws. The (cons) are the costs of moving to China. The third alternatives (pros) are they would have cheap labor and distribution costs. The (cons) are they will not have enough information on the Chinese market, distribution channels, local conations and laws, as well as identifying potential joint ventures. The fourth alternatives (pros) are being able to get cheap labor and distribution costs. They are also able to keep frame production (the high tech end of Eldora’s operation) close to home. They also have knowledge of the...
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