HodgettsLuthansDoh: III. International Strategic 8.
Strategy Formulation and The McGrawHill
International Management, Management Implementation
Sixth Edition
Go East, Young People,
Go East
Amanda Brendhart, Jose Gutierrez, and Rhoda Schreiber
founded and are partners in a small electronics firm, Elec-
tronic Visions, that has developed and patented some state-
of-the-art computer components. Visions has had moderate
success selling these components to large U.S.-based com-
puter manufacturers. The biggest problem is that in recent
months, the computer market has begun to turn soft, and
many of the manufacturers are offering substantial dis-
counts to generate sales. Therefore, although Visions has
found an increasing demand for its product, it now is gross-
ing less money than it was several months ago.
To increase both sales and profit, the partners have de-
cided to expand into Asia. Although this region is known
for its low-cost computer production, the group believes
that countries such as China, Malaysia, and Thailand soon
will become more lucrative markets, because the U.S. gov-
ernment will make these countries open their doors to im-
ports more fully. If trade barriers are removed, the partners
are convinced that they can export the goods at very com-
petitive prices. In addition, the partners intend to find a
partner in each market so that they have someone to help
with the marketing and financing of the product. Of course,
Companies, 2005
You Be the
International
Management
Consultant
if the components can be produced more cheaply with lo-
cal labor, the partnership is willing to forgo exporting and
have everything produced locally.
At present, the group is trying to answer three questions.
First, what is the best entry strategy to use in reaching the
Asian markets? Second, what type of marketing strategy
will be most effective? Third, if production must be coor-
dinated between the United States and an overseas country,
what is the best way to handle this? The partners believe
that over the next two months, they will have a very good
idea of what is going to happen regarding the opening of
Asian markets. In the interim, they intend to work up a pre-
liminary strategic plan that they can use to guide them.
Questions
1. What type of entry and ownership approach would
you recommend? Defend your choice.
2. How could the partners use the four Ps of marketing
to help implement strategy?
3. If production must be globally coordinated, will
Visions have a major problem? Why or why not?
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