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What steps should i do with this hypothetical market conditions? - mega.manga.maniac - 06-21-2014 03:21 PM
Turmoil around exploding handsets has settled. Investigations concluded that there was no explosion on the plane, but someone had placed an opened durian fruit in the cockpit and both the captain and the co-pilot lost their consciousness due to the smell of the fruit. Contrary to handsets, demand is exploding for the coming round: growth rates of 15% in Europe, 20% in the USA, and over 40% in Asia are expected. The simmering tensions between the USA and China from previous years have escalated, with certain geo-political issues adding to the existing economic differences between the two nations. China has rallied several of its neighbours to support its position, and an all out trade war between the United States and a group of Asian countries has erupted, causing a number of difficulties for the company. A decision by Asian countries to increase trade tariffs to $15 per handset was accompanied by a sharp rise in the cost of building new manufacturing plants. The United States retaliated by matching the tariff and also introducing a partial ban on imports of certain Asian products, leading to a sharp decline in demand as corporate buyers started to switch to alternative (domestic) products. While the company is still able to produce goods in, and transport goods to Asia, the market conditions there are becoming increasingly hostile. At the same time, the US government has been making private overtures recommending the company significantly reduce their operations in Asia for a short time, and there have been hints of ‘sweetheart’ tax deals in the coming years for those who comply. While goods produced in the United States can still be transported to Asia, new administrative costs implemented by the US government for companies exporting to certain Asian countries means the actual tariff per unit is now $40USD per handset. The company is faced with the decision of complying with the restrictions introduced by the United States or finding ways to work around them.
The issue can be reduced to a simple question: should the company reduce its presence in the fast-growing Asian market, or should it continue to trade there and potentially incur the wrath of both the US government and US consumers for what will undoubtedly be spun as ‘unpatriotic practices’?
please tell me what a marketing director would do (operating in EU, ASIA and USA) in the first paragragh and then answer the question above.
The company manufactures mobiles
- Rigal T - 06-21-2014 03:30 PM
Bow out of the US market and switch product lines to durian fruit marketed only in south east Asia. "Mmmm that sweet rotting flesh flavor."