Sterling Marking Products
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Case Brief
Read the following case to prepare for the case brief:
"Sterling Marking Products Inc. (9A89G005)
Suggested Guidance Questions for Brief Analysis
1. As Jan D'Ailly, what would you recommend to your company? Why?
2. Are you satisfied with how things are going in the United States? Why is it appropriate to move at the speed you are proposing? Of the eight other countries which have approached you to date, which will you deal with first? Will you use the same mode for other countries as you are suggesting for the United Kingdom? Why?
3. To support your answers in the above questions, you should address the following:
• What criteria would you use for ranking foreign market attractiveness?
• What are some conditions supporting rapid expansion into foreign markets?
• What are the criteria for deciding between modes of involvement?
• What is the cost of establishing a branch in the UK?
• Can you provide a comparison of costs and revenues for the Canadian, US, and UK using different modes of entry (e.g., export, JV, subsidiary)?
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Solution Summary
Recommendation of mode of entry for international expansion are examined.
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Sterling Marking Products Inc.
After USA, UK is the largest market for Sterling for selling its flagship product, The Mark Marker. It is the only market in the entire European continent where seals are a legal requirement for corporations. Sterling has many options to sell Mark Marker in United Kingdom. Sterling could export finished product, license the product to a U.K. manufacturer, form a joint venture with local manufacturer or to have company owned branches in U.K.
• Exporting relives burden of risk as all financial and legal matters will be handled in the home country. By exporting Mark Markers to U.K., Sterling would be able to meet demands be profitable even after paying duty, value added tax and courier charges.
• Licensing has greatest risk as quality of product is based on production facilities of overseas firm. From cost and risk perspective licensing is better option for the company.
• Through Joint venture, Sterling can achieve higher sales volume, market penetration and profit potential than any other strategy. However, a high level of commitment is required including resources.
• Sterling has not had good experience of managing Windsor and Toronto offices which means that until Sterling's ability for ...
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