We need to determine whether Sterling possesses the key success factors necessary to expand internationally into the UK. Our analysis will evaluate the feasibility of Sterling's international expansion via exporting, licensing and branching.
Market Segmentation (SWOT)
-Significantly higher market demand than in Canada (162k-192k vs. 87K)
-Barriers to entry include, high number of competitors, high exchange rate, high initial capital requirements, cultural differences among sales people (perhaps not as aggressive as in Canada, resulting in lower sales)
-Lack of current Sterling brand identity
-Development of bad reputation
-Lack of die and embosser sub-assembly integration
-Sterling's high quality Mark Maker could dominate the current poor seal market
-Sterling's computer technology may be attractive to suppliers due to its efficiency and effectiveness
-High degree of loyalty between seal producers and formation agents could hinder Sterling's market penetration
-Potential duplication of Sterling's patented Mark Maker by UK's competitors
-Potential unexpected demand drop due to legal non-requirement of embossed seal
Sterling's Expansion (PROs/CONs)
-Quick response rate to any orders due to Sterling's sophisticated computer technology
-Inadequate initial cash flows due to lack of brand awareness
-Premium pricing structure might prevent high market penetration due to price sensitive customers
-Unclear direction, role and authority of Sterling's management might create confusion and generate objectives/targets that would not be aligned with company's goal/mission.
Proposed Billing Method
If we decide to expand into the UK, charging a very high premium price will not be very beneficial for Sterling in a market that is extremely price sensitive and that might have no need for the Mark Maker in the future. Sterling must adapt a competitive price and incentive structure, which will enable it to compete with Jordan, Bolson and Others and force its sales team to generate...