by Andrew D. Bartmess (HBR Article, 1994.)
In this case, Ann Reardon is the chief executive officer of Eldora Company (EDC), a large bicycle manufacturer in Boulder, Colorado. Ann is told by two vice chairs that EDC needs to extend their mart to meet a growing foreign demand. The manufacturing vice chairman thinks EDC should build a plant in China as soon as possible, firearm the food marketing vice president thinks setting up a direct Asian gross sales operation is a better way to understand the market. Ann realizes that fraternity’s next move is crucial to the company’s success.
Q. Which expert’s notion makes most sense to you? why?
In my opinion, Bernie Kotlier’s approach is most sensible to run Ann’s dilemma. He suggest that EDC should expand into the Asian market with a strong manufacturing presence through a roast venture.
It seems obvious that the demand for bicycles in US and Europe is declining, while the demand in Asia market is growing. Even though EDC is a competitive advantage in the US market, currently, it is reaching saturation. On the contrary, the Asian markets are growing in the double digits and whitethorn react quite favorably to a high feature bicycle as compared to the current demand.
Offering high fiber bicycle with quick delivery is EDC’s strength. Therefore, EDC should expand into the Asian market and establish a manufacturing division in there.
Then, where should Eldora take root its Asian plant? I agree with Bernie’s opinion that China is the better place than the other countries such as Taiwan or Singapore in terms of outwear cost, natural resources and its infrastructure which is improving rapidly. EDC may want to concentrate on the growing middle class in Asia who would be more likely to pay a higher worth for a high quality, state-of-the-art bicycle. This target market would as well as likely prove more profitable than the lower-end spectrum.
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