What do you see as being the best global business strategy for CCC? Describe what this strategy would look like if applied by CCC and give reasons for why you see this as being the model that best fits CCC's needs. Which of the market entry modes would you recommend to Bob? Why? What are the potential benefits and risks for the company adopting this approach? Into which countries would you recommend CCC should enter first? Give reasons for your recommendations.
Questions:
Croad Cycle Company (CCC) is a small to medium enterprise (SME) based in Canada, which manufactures high-end mountain bikes (MTBs) for the competition and domestic markets on the west coast of Canada and the USA. Company founder and CEO, Bob Croad, was a pioneer of the Canadian MTB scene in the 1990s and began making his own MTBs in his garage at home in 2001.
Over the last 20 years, CCC has built a strong reputation in North America for innovative bike geometry and designs, and for producing fast, high performance bikes. However, things really began to take off for CCC last year, when two young Canadian riders (both sponsored by the company and riding CCC bikes), placed in the top 10 of the World MTB Championships. The success of these riders provided the company with significant exposure on the global stage, which resulted in a substantial jump in visits to their website from countries such as Australia, Japan and several European countries. CCC has also received several enquiries from cycling retailers in other countries wanting to sell their bikes and they have also had a spike in online orders for their bikes to be shipped abroad.
As the company has grown, CCC shifted out of Bob’s garage and now employs 35 workers in a new factory in Vancouver. This is where they design, engineer and finish (paint and branding) their innovative mountain bike frames, then assemble their bikes using components (wheels, handlebars, seats, gears, suspension, pedals etc.) sourced from a range of global suppliers, and they finally package their bikes for distribution to their retailers or directly to their customers. However, while there is substantial scope to increase production from their factory in Vancouver, the company has struggled to keep up with the recent increase in demand, and its lack of export and logistics experience has meant the international distribution of their bikes is inefficient, slow and expensive.
This has not been an issue for their North America operations, but Bob is concerned this could have a substantial impact on the competitiveness of CCC's MTBs in international markets. Bob is very interested in capitalising on the interest from overseas and wants to test the European MTB market, but he is unsure of the best strategy to expand CCC into Europe.
To assist Bob to develop the best strategy for CCC’s international expansion, you need to prepare a 3- 4 page document that explores the following questions:
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What do you see as being the best global business strategy for CCC? Describe what this strategy would look like if applied by CCC and give reasons for why you see this as being the model that best fits CCC's needs.
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Which of the market entry modes would you recommend to Bob? Why? What are the potential benefits and risks for the company adopting this approach?
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Into which countries would you recommend CCC should enter first? Give reasons for your recommendations.
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