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CAH Case Study

Layers
by

Louise Nguyen

on 8 January 2016

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Transcript of CAH Case Study

PROBLEM
Business growth strategies and investment options for CAH

Strategic - Finding the best growth track for the company

Tactical - Further analyze on European market and the available options
MARKET POTENTIAL
U.S Market
COMPETITIVE ANALYSIS
North America
PROJECTIONS
EU Market
PROJECTIONS
COMPANY ANALYSIS
Marketing Mix
ALTERNATIVES
RECOMMENDATION
North America
Primarily focus to expand North America market
Thank you
CAMAR AUTOMOBILE HOIST
Case Study
COMPANY ANALYSIS
Financial Analysis
COMPANY ANALYSIS
Overview
COMPETITIVE ANALYSIS
North America

North America
Set up a Direct Sales Team in U.S (New York office)
'Push' U.S wholesalers to sell Camar Lift
European Market
Licensing - Receive 5% Royalty
Joint Venture - 50% Profit Sharing
Direct Investment - 100% Profit
- Required Cost: $1.5 million
- Variance 20%

10x bigger than Canadian market
Camar Lift is a minor product in US wholesaler's total line (accounts for less than 20%)
Eastern states are closer to the factory in Canada
CAH receives 78% of the selling price from wholesalers
Positive Net income & Constant GPM
Low profit after 10 years in business
Sales team (4 persons) contributed 25 % of the revenue in 1999
Direct sale has a contribution margin of 40%
CAH specialized on Surface Hoist (85% revenue from Wheel Alignment, 15% from General Repairs)
MARKET POTENTIAL
European Market
No dorminant manufacturer in Europe
More vehicles equals to greater number of service and repair facilities which vehicles need to be hoisted
1 German firm manufacturing scissor lifts
Lack of knowledge on European market
Well understanding of market & consumer behaviours
Limited data on EU competitors
Licensing
+ Lowest risk
+ Save resources on marketing expense
- Less control over the business growth
- Small profit to serve a "fast growth" track
Joint Venture
+ Much higher return
+ Spread the risks between CAH and Bar Maisse
+ Gain share and awareness in EU market
- Expense on marketing and distribution efforts
Direct Investment
+ 100% profit
- High risk due to lack of understanding on the market
- High cost (1.5 million investment)
Profit & Loss Analysis
Small market share!!
Step-up commission plan for the wholesalers
Build strong 'aftersales services' team as a USP
Set up a direct sales in New York
Promotion plan
Up to 400 units sold: 22% comission
401-600: 23%
> 600: 25%
Provide excellent service to differentiate from competitors
Direct sales force to a 80-20 ratio: 7-8 pax for Wheel alignment, 2-3 pax for General Repairs
Discount Plan (e.g. Buy more than 2 get further discount)
Sales discount for immediate Trade-in of existing hoist
RECOMMENDATION
EU Market
Joint venture
5-year JV agreement with Bar Maisse or an alternative company
Manufacturing technology (CAH)

Admin + Distribution (Partner)
Marketing Plan
Product Training
Direct Marketing
Trial products to various repairs shops and chain
Full transcript