Question

QUESTION 5
CASE: SpinCent: The Decision to Export
SpinCent is a small Pennsylvania exporter of laboratory and industrial centrifuges. The company was
initially a passive exporter. However, a struggling U.S. economy provided the incentive for the
company to focus on international markets. The Asia market became a prime target for the
organization. Management looked to develop long-term beneficial relationships with a distribution
network in the region. The company did its homework and spent time in the region identifying
market potential, competition, price points, and recruiting a sales force. The company discovered
that exporting to the region provided more opportunities than risks. They now do a steady stream of
business overseas, experiencing low-cost/high-reward endeavor. Successful planning and a
commitment to goals are advocated by the organization.
(a) Analyse the challenges that SpinCent overcame in developing its export activity. Describe
how it overcame them.
(b) Based on its Asian experiences, map a sequence to guide SpinCent’s export expansion to
Sub-Sahara Africa.
Total: 20 marks

Answer 1

A : Case Synopsis

SpinCent is a small exporter of research and industrial centrifuges in P country. The organization was successful a detached exporter. The US economy downfall gave the opportunity for the organization to focus on universal markets. The As-a market turned out to be a prime focus for the organization. Administration looked to increase long-term beneficial relationships with distribution network in the region. The organization spend time in region to recognize the market potential, rivalry, cost focuses, and power recruiting a sales force. The organization found that exporting to the region offered more opportunities than risks. They now have a constant flow of business in a foreign country, encountering minimal effort/high-remunerate attempt. The association pushes effective arrangements and guarantee to objectives.

The challenges that SpinCent overcame in developing its export strategy:

SpinCent was skeptical about the worldwide accomplishment, as serving customers in domestic market kept them busy, and felt that they lacked in both financial resources and management talent.
Moreover, they feared about direct rivalry with experienced exporters from G and J countries. The struggle in US economy and market trends forced them to concentrate on the domestic market and exploit possible efficiency or extend forcefully into export. While demand for their goods was diminishing, economically developed industries signaled opportunities, which SpinCent.

B :

The SpinCents’s export expansion to sub-Saharan Africa based on Asian experience was monitored by the following sequence: 1.Define Market potential: They need to analyze and identify the market potential for laboratory and industrial centrifuges. With this in mind, they should also create benchmarking project to identify and sell their products at a competitive price.

2.Competitor evaluation:They need to analyze the competition in the segment for arriving at their strengths, weakness and product offerings in the region. After identifying their competitors, the firm should be able to promote their products to a specific target market.

3.Pricing strategy:They need to check the price points of competitors and the market requirement. They can define their prices based on the competitor’s prices and their costs.

4.Recruit a sales team: If the company recruits local staff, they would be able to be trained with a different perspective. Even though they will have the knowledge to understand locals, complying with the company’s values would make them better employees.

5.Conducts a risk analysis: To understand the country’s local laws, they should be ​​​​​​conduct research which involves huge money.