Foxy Originals expansion into the U.S. market

Topics: Variable cost, Fixed cost, Total cost Pages: 4 (1874 words) Published: November 2, 2014

Case Study | center3962291Foxy Originals
Expansion into The U.S. Market

TOC \o "1-3" \h \z \u Executive Summary: PAGEREF _Toc382852169 \h 3Problem statement PAGEREF _Toc382852170 \h 4Analysis PAGEREF _Toc382852171 \h 4Impact Analysis PAGEREF _Toc382852172 \h 5Criteria for an Effective Solution PAGEREF _Toc382852173 \h 5Evaluation of Alternatives PAGEREF _Toc382852174 \h 5Recommendation PAGEREF _Toc382852175 \h 6Action Plan PAGEREF _Toc382852176 \h 7Appendix A PAGEREF _Toc382852177 \h iAppendix B PAGEREF _Toc382852178 \h iii

Executive Summary:Foxy Originals has been becoming a popular jewelry brand in Canada with their low-priced high-class products. With fast pace growing in local market, Foxy’s jewelry has gradually reached saturation point in Canada. Kluger and Orol, as owners, decided to enter the U.S. market by January 2005. Only problem they faced is to determine which method of distribution is best. Currently, there are three options Foxy can consider to implement. Attending trade shows

hiring sales representative
Combination of doing both
If Kluger and Orol choose one without carefully consideration, they will probably fail to expand U.S. markets, and even take a bath by dumb move. Income Statement
10 Trade Shows Four Sales Representatives
Best Case Worst Case Best Case Worst Case
Sales $256,050.00 $113,800.00 $409,680.00 $273,120.00 Variable expense $120,262.50 $53,450.00 $192,420.00 $128,280.00 Sales commission $- $- $61,452.00 $40,968.00
Total CM $135,787.50 $60,350.00 $155,808.00 $103,872.00 Total fixed expense $94,333.30 $94,333.30 $15,920.00 $15,920.00 Operating income $41,454.20 $(33,983.30) $139,888.00 $87,952.00 Based on both qualitative and quantitative analysis, Foxy should hire sales representatives in the key fashion hubs for expansion of U.S. market. This distribution method has low investment, high return and high efficiency features,...
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