Case - General Description

ABC Jean Company (ABC) is a US firm that sells custom designed blue jeans. A key selling attribute is that the ABC jeans fit well due to a unique phone app that uses artificial intelligence to calculate body measurements from a cell phone picture. Your US tag line is Right fit, Every Time. The digitized customer measurements are sent to an unrelated Chinese manufacturer (XYZ) company. Their software translates the measurements and produces the customized jeans which are sent to ABCs New York City Warehouse. ABC branded jeans are then sent to ABC owned stores in Toronto, Canada, Mexico City, Mexico, and to U.S. stores in New York and Los Angeles.

ABCs president, Joe, is seeking to expand its blue jeans operations to include a European city in 2021. A previous study has identified the top two candidate cities are Milan, Italy and Berlin Germany. Joe wants to act quickly while there are few competitors with similar technology. Joe has many questions and concerns that need to be resolved before ABC can proceed.

These include but are not limited to: 1. Which market should ABC choose (Berlin, Germany or Milan, Italy)?; 2. What organization form should ABC choose to enter this market?; 3. How could ABC gain important future demand information regarding the acceptance of its jeans in the chosen market?; 4 Should ABC target the same customers with the same value proposition as it does in the US? 5. What marketing services could ABC obtain from outside vendors to more quickly market its jeans in the selected European country? 6. How might ABC create an efficient and cost-effective supply chain in getting jeans from China to Europe? 7. Given the likely possibility that the US will place an additional 20% tariff on Chinese exports in the next two months, where should ABC seek a second manufacturing location? 8. How should ABC increase the efficiency of its cash management process and improve profits via creative internal pricing? 9. What potential areas of price escalation occur during your keans journey from China to the shelves in a European store? 10) Who should run the European store?

As the International Marketing Manager you are charged with this task. In answering the below questions, provide your company specific analysis including alternatives considered and tools you might use (could use hypothetical numbers that support your position) that ultimately help Joe in making his market decisions on country selection, mode of entry, marketing channels, physical movement of goods, etc. Joe only has two hours before he gets on a plane so use this time efficiently to answer all his questions in your briefing memo. To simply your analysis, disregard Covid-19 complications in your answers below.

1. Which market should ABC choose (Berlin, Germany or Milan, Italy) and why? You could use an opportunity/risk comparison grid or matrix or other scanning approaches to aid in your justification. Use case specific references and you may create numbers to justify your recommendations.

2. What organization form should ABC choose to enter this market? Consider the positive and negatives associated with the following options: License your form fit technology; create a company owned store in the selected country (fdi); use a distributor to get your product in many stores in the selected country. Why is the selected entry mode you chose best for ABC? Briefly discuss the coordination and control issues associated with these forms

3. In an effort to mitigate market entry risk, how could ABC gain important future demand information regarding the acceptance of its jeans in the chosen market? Comment how you could use different techniques (demographics, the Internet, market research, trade shows, analytical tools) to help assess the future demand for your jeans.

4 Should ABC target the same customers with the same value proposition as it does in the US? Why? Why not? What modification could ABC make to its jeans or in the positioning of its jeans to be viewed as being more locally responsive in the selected European market.