Reference no: EM13128551

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 America is a good opportunity to expand Foxy's market, but entering the new market would cost a lot of money and time. It's important for Foxy to do a research and decide where to launch the product. Through making an accounting information?.??lysis, it would help company make a decision of how to enter US market.

  The strength of Foxy is that two owners have experience of styling product, low price, and current market in Canada. But the weakness of Foxy is that they don't have international experience .The cost of retail store would be a high expense, and the Us marketing of jewelry is saturation. It has risk of eliminating by local markes and strong competitors.

 

ALTERNATIVE IDENTIFICATION

  Foxy Originals currently has three options :

 1. Option one: Foxy Originals can sell products at trade shows. From trade shows, two owner would have a opportunity to communicate with potential customers, retail owners, and sales people. It's also a good chance to show their products and get order from the shows.

  From exhibit5 and 6, it is thus clear that to attend a trade show will cost $9433.33, and will get an average of $8230.42 profit. Therefore the company will generate $82304.2 profit by attending 10 trade show.

  To run a trade show, it would needs Kluger and Orol have to show up in the each show, in the addition of set up, move the booths, travel and publish the tickets, not only the whole year scheduled but those complex process, it is low profit and needs to take a long time to enter America market.

 

2. Second option: Foxy Originals can hire sale representatives to sell their products. The sale representatives have much more experience than owners, and they have a good relationship with retailer and industry,.It would help company have a good connect with customers, and help company get into the US market quickly and efficiently.

  Through hiring four sales representatives, it needs to compensate them commission on all sales and rental spaces. the company will spend $6380(exibit11) for each sales representatives..Four sales representatives will cost $86320 in profits. According to their experience, it gets sooner to enter the America market, and the price is much lower.

 

3. Third option: Foxy Originals can use both two ways that trade show and sales representatives in order to enter US market. Although sales representatives is low cost and high profit, in view of the complex reason between spillover sales and contract, this way seems more stable to help company enter US market without being defeated.

  By complete two strategies profit and cost, it shows this option will cost Foxy Originals $100,710 a year, and get $168,624 profit a year. Although the profit is much higher than other two strategies, this way needs high start-up capital, which is highest risk and long shot, considered by the jewelry's market prospect and extremely competitive, it had better invest a relatively safe way to ensure that the proceeds are not old quilt.

 

ALTERNATIVES ANAYLSIS - MATRIX

Distribution strategy	Highest profit	Lowest fix cost	Efficient of developing marketing	Highest risk
Trade shows	No	No	No	No
Sales representatives	No	Yes	No	No
Trade shows and sales representatives	Yes	No	Yes	Yes

 

 

RECOMMENDATION

  According analysis those three options, the second way which hire sales representatives will be a good distribution strategy for Foxy Original. To hire sales representatives will cost minimum money, and the expected revenue are much higher than other options. The sales representatives have more experience of US local market, which remedy the weakness of company, but they require minimum training and have a good relationship with existing retailer and industry, this option could help company enter the US market much faster, gain larger customer base, and help company to face the competitors in US.

  For the above mentioned, the Us marketing of jewelry is saturation, so that Foxy Original has better to create a niche market, which is unique, distinct product to attract initial customers. Besides, maintain the lower price superiority will help company to compete the competitor. Sales representatives could running the business from smaller market to avoid the stiff competition of urban city, when the brand gain greater exposure and has a certain reputation, then they could actively expand the business into large urban city. On the other hand, Foxy Original company also can make a on-line store for consumer to shop on-line, and have promotion for limit one time offer to customers. For all these recommendation, Foxy Original company will gain profit and expand into US market successfully.