A.L. Labs case analysis from the book International Marketing by Terpstra

Essay by jobligadoUniversity, Bachelor's July 2005

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Case Analysis on

A.L. Labs Inc.

I. Point of view

To properly asses the problem, we are taking the place of a marketing analyst for A.L. Labs

II. Problem Statement(s)

At the end of the study, we are going to answer the following questions.

In what area(s) should the company improve to further increase their market share?

Should the company delete human Nutrition products from its product line?

II. Answers to questions

What are the benefits to A.L. Labs of having a foreign parent?

a. Less Investment- No need for the A.L. Labs to conduct Research & Development from scratch, it gains production expertise or a well-known product or brand name from its established parent.

b. Use of the foreign parent's manufacturing capabilities, patent (trademark), and trade secret. With this, A.L. Labs already has standardized and tested processes for its products. They are sure of the competitive nature of their products.

With global manufacturers around the world.

c. The foreign parent is in charge of research & technology development especially the in manufacturing process. Developments or upgrades in the manufacturing process will lead to higher quality and lower production costs at the expense of the foreign parent.

d. The foreign sourcing (global manufacturing capability) can provide needed products once the A.L. Labs have production deficits from huge orders.

e. The foreign parent will not act as a competitor since it is located in a different country.

How has this affected its choice of strategy in international marketing?

Since A.L. Labs was able to increase the proportion of their business in the US to the extent that US sales are greater than the foreign sales of the parent company, and in which most sales are from pharmaceuticals, human nutrition, and animal health respectively they decided to diversify away from animal feed...