Amanda Brendhart, Jose Gutierrez, and Rhoda Schreiber founded and are partners in a small electronics firm, Electronic 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 computer 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 discounts to generate sales. Therefore, although Visions has found an increasing demand for its product, it now is grossing less money than it was several months ago. To increase both sales and profit, the partners have decided 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. government will make these countries open their doors to imports more fully. If trade barriers are removed, the partners are convinced that they can export the goods at very competitive 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, if the components can be produced more cheaply with local 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 coordinated 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 preliminary strategic plan that they can use to guide them.
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?