It is essential to note that the primary question for Breezy to ask is the possibility to propose the rational price for the products for a partner in India or Brazil. The basic problem is that both Brazil and India are developing countries. The automobile industry in these regions is mostly focused on the manufacturing of the cheap automobiles. Obviously, Breezy is a leader in North America. Nevertheless, the level of life in the U.S. or Canada is higher than the level of life in India. Consequently, it could be extremely hard for the company to decrease the price without changing the quality of the products. The decrease of quality could have a negative result on the image of the brand. Furthermore, it would be essential to build new manufacturing capacities and develop new models. Therefore, it is important to think about the price strategy in each chosen solution.
The process of negotiating has to be based on the compromise. It is crucial to start the partnership with the foreign partners on the basis of the mutual respect because the failure of the project could undermine the performance of the company. As it has already been mentioned, one of the primary topics of discussion is the product’s price. The partners need to discuss the future models of the cars and think about the average customer. This information could be useful in the process of strategic planning.
It is beneficial for Breezy Auto Parts to have an office in each region. The representatives of the company should organize the process at the beginning of the cooperation. It will be essential to manage the logistical problems and find the optimal way to supply the goods for the partners. It seems fair to state that the globalization trend could give a unique opportunity for Breezy to build manufacturing capacities in the other countries. It is obvious that the price for the products could become lower in the case of the cheaper labor use. Accordingly, the location of the company’s office or even plant has to be chosen on the basis of the logistical analysis.
The company would need to invest in the market analysis. There is no doubt that it could be very dangerous to enter the market without the information about the local economic state. Consequently, it would be rational to hire a specialist, who could examine the activities of the potential partners and conduct the SWOT analysis of each specific proposition. In the case of the final agreement between the partners, it will be necessary to make R&D investments and even build new plants.
The company could search for the help of the international investors or enter the joint venture. Moreover, it could be possible to create a new organization with the shareholders from the different countries. Finally, it is also possible to use the current resources in case if the R&D costs will not be very big.
Breezy should continue its operations in the sphere carburetors and air filters trade. It is evident that the company is extremely successful in this sphere of business activities. This experience has to be used in the offshore business projects. Therefore, the change of the corporate vision is not the priority goal for the company. On the other hand, the protection of the current values is beneficial for the formation of the good brand image in the new regions.
Evidently, the biggest risk of the offshore venture is connected with the local economic, political, and social situation. It is hard for the company to protect its assets in case of a political crisis. Moreover, the fact that the company is partly dependent on the performance of the foreign partner decreases the general sustainability of the venture.
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