Martinez had formed the company five years ago, Variety of totes, purse and
handbags are manufactured and sold by the company. It is a European brand that
is popular among young woman and teenagers. At the present, all the products
are manufactured in the plant at Georgia, that operating at 70% capacity. All
products are currently sold in the United States and Canada. Natalia wants to
expand their business in Latin American and then later in Asia. She has just
introduced Pippi bag to a Brazilian buyer, that’s popular among American teens.
Natalia got an offer from the Brazilian buyer to 20,000 Pippi bags at a price
of $8 per unit. In the United States, the same size of Pippi bags sold at $35
to $45 per units.
Natalia lose money if she accepts the Brazilian offer?
to Cost Analysis, Natalia will not lose money if she accepts the Brazilian
2. What factors other than cost and revenue
should be considered in this case?
and revenue are the most prioritized factor when a company accepts an offer
from any buyer. Instead of cost and revenue, there are some factors, that
should be considered:
Reputation of company:
For the survival
in the competitive market, the reputation of the business is an essential
element. Product quality, customer service, relationship with suppliers and buyer
makes company’s reputation and gain financial performance and financial
marketplace for a company.
accepting an offer from the Brazilian, The Rocko Handbags premium reputation
may get at risk. A Brazilian retailer offers $8 per unit for Pippi bag but, in
the United States Pippi bags sold to retail at $22 per unit. The huge price
difference may be an impact of the reputation of the company.
Handbags manufactures and sells a variety of handbags product in the United
States and Canada. Natalia wants to expand their business by first entering
Latin America then later into Asia. Brazilian retailer is giving a platform to
enter the South American market by providing an offer. For Natalia, it is an opportunity
to enter the South American market by accepting Brazilian offer.
would you recommend to Natalia?
recommend to Natalia to accept an offer for expansion her business in Latin America.
Rocko manufacture bags in different styles and the European style, which is the
most popular style among young women and teenagers in the United States and
Canada can be famous in other parts as well. Rocko handbags Ltd. can make their
reputation and demand among teenagers and young women with help of their product
quality and European style in Brazil. If they enter the market they can
increase the price of a product by negotiation with the retailer later.
Bracey, L. (2017). The Importance of
Business Reputation. Retrieved from businessinfocusmagazine:
Griffin, R. w., & Ebert, R. J.
(2011). Business Essentials. Pearson, Publishing as Prentice Hall.