Determine and discuss the degree of agreement or disagreement among the various groups in the class. Break


Determine and discuss the degree of agreement or disagreement among the various groups in the class.

Break into small groups of four to five people. Assume your group is the executive committee (that is, the top managers) of Resteaze, Inc. Resteaze is a large manufacturer of mattresses, box springs, and waterbeds. The publicly traded firm is among the largest in the U.S. bedding market. It operates 15 factories, employs more than 5,000 people, and last year generated $20 million in profits on sales of $380 million. Resteaze products are sold through department stores, furniture stores, and specialty shops and have the reputation of being of good quality and medium priced.
Your committee is thinking about entering the European bedding market.
You know little about the European market, so you are thinking about forming a JV. Your committee has identified three possible candidates for such an arrangement.
One candidate is Bedrest. Bedrest is a French firm that also makes bedding. Unfortunately, Bedrest products have a poor reputation in Europe and most of its sales stem from the fact that its products are exceptionally cheap. However, there are possibilities for growth in Eastern Europe. The consultant who recommended Bedrest suggests that your higher-quality products would mesh well with Bedrest’s cheaper ones. Bedrest is known to be having financial difficulties because of declining sales. However, the consultant thinks the firm will soon turn things around.
A second candidate is Home Furnishings, Inc., a German firm that manufactures high-quality furniture. Its line of bedroom furniture (headboards, dressers, chests, and so on) is among the most popular in Europe. The firm is also known to be interested in entering the U.S.
furniture market. Home Furnishings is a privately owned concern that is assumed to have a strong financial position. Because of its prices, however, the firm is not expected to be able to compete effectively in Eastern Europe.
Finally, Pacific Enterprises, Inc., is a huge Japanese conglomerate that is just now entering the European market. The firm does not have any current operations in Europe but has enormous financial reserves to put behind any new undertaking it might decide to pursue. Its major product lines are machine tools, auto replacement parts, communications equipment, and consumer electronics.
Your task is to assess the relative advantages and disadvantages of each of these prospective partners for Resteaze. The European market is important to you, this is your first venture abroad, and you want the highest probability for success. After assessing each candidate, rank the three in order of their relative attractiveness to your firm.

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International Business

ISBN: 272390

9th Edition

Authors: Ricky W. Griffin, Michael W. Pustay

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