New Market Entry #1

China Outsourcing case

The client is a national manufacturer of plastic consumer products that are sold in a variety of retail formats, including supermarkets, discounters, club stores, and dollar stores. the company has three main product lines: 1) freezer bags, 2) plastic plates and utensils, and 3) specialty plates and utensils.

the CEO has been reading for some time about American companies outsourcing their production overseas to lower cost countries such as China. she wonders whether this makes sense for her company as well. it worries her that none of her main competitors have established foreign production capabilities. on the other hand, this could be a tremendous opportunity to gain a competitive advantage.

Framework:

Market & Customers: who are the customers. market size. growth and trends.

Company & Products: Costs structure and revenue. suppliers and demands.

Competition: major players. market share.

Barriers to entry: tech, regulation, competition.

Recommendations: 1. start from scratch 2. acquire other players 3. joint venture
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