Business 2257 Typed Case Study Answer - Foxy Original.docx

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Business Administration
Business Administration 2257
Brian Langen

As: Jen Kluger and Suzie Orol, Owners of Foxy Originals For: Entering U.S. market by January 2005 (6 months from current time) To: Whether to distribute by attending trade shows or hiring sales representatives (or both) Qualitative – Launching into the US Case Fact Implication Pro US market is 10 times larger than that of Canada’s Increase in profit Possible to finance internally No need for debt / equity financing (no losing control) Prevent oversaturation in the Canadian market Brand exclusivity Culture similar to Canada’s Stay funky and fresh Con Americans are more trendy Foxy’s merchandise is 50% classic, and therefore new pieces need to be designed to keep up. Brand loyalty Some Canadian customers buy it for being local. No such thing for American customers. US market is 10 times larger than that of Canada’s More consumption means higher production speed needed Qualitative – Tradeshows distribution method Case Fact Implication Pro Potential to network May allow owners to learn about US market Owners have more knowledge about their products Personal sales have worked well in Canada Many potential buyers Opportunity to directly meet with retailers at target market Gain ideas for new products Keep up-to date on trends and revamp product line Owners’ love to travel Keep it fun for owners Con Diverse attendance Cannot control brand image Takes 8 days per show 80 days / year. Very time consuming Many other exhibitors / competition Risk of being unable to differentiate from competitors Qualitative – Salespeople distribution method Case Fact Implication Pro Sales rep are experienced Minimal training required  increased profits Quick to enter market Meet time goal of 6 months Select retailers Control brand image Owners can focus elsewhere Less time constraint No need to sacrifice Canadian market for US launch Con Sales rep carry 10 – 15 different brands Blends brand image Incentive to push Foxy brand may be needed Finding good sales rep can be difficult Meeting time goal and controlling brand image is difficult Only in fashion hubs Difficult to reach the broad market Fixed Cost – Trade Shows Item Per show For fiscal year Registration fee $3,000 $30,000 Amortization: Booth $ 133 $ 1,333 Booth shipping expense $1,500 $15,000 Promotional material $2,800 $28,000 Transportation expense $2,000 $20,000 Total $9,433 $94,333 Investment: Booth $4,000 Fixed Cost – Sales Representatives Item Per representative For fiscal year Rent $2,400 $ 9,600 Sample boards $2,900 $11,600 Promotional material $ 600 $ 2,400 Bookkeeper $ 480 $ 1,920 Total: $6,380 $25,520 Variable Cost – Trade Shows Item
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