Baxton Technology

Baxton Technology

Background and Problem Defination:

Baxton Technology which manufactures surface automotive hoist started from Lachine,Quebec Canada. It is widely spread in United states and Canadian markets. For the faster growth, Mark, president of Boxton Technology wants to explore European markets. Baxton Technology should make the strategy to enter in the European markets considering opportunity cost in United States.

Market Analysis:

The industry is in growing stage as sales of units sold increased by 17% in 1998 and 24% in 1999 in United states. Boxton technology has 6.46% of market sales in United States and Canada (Exhibit 1). There is high opportunity to grow in this market. In European market the new vehicles registered are 10.7 million (Exhibit 1 in case)indicates large market for Boxton lift. Boxton technology have three options to enter in European markets. 1) Getting royalty of 5% of gross sales of Bar Maisse 2) 50-50 partnership where both shares profits and investment. 3) Getting responsible share in European markets with proper marketing. If they switch to European markets Mr Pierre will handle the markets in Europe.

Strategy Alternatives:

The above mentioned three option have pros and cons.

Alternative 1: Getting royalty of 5% of gross sales of Bar Maisse.

This Alternative will not initially allow Boxton Technology to enter in European markets. This will save the further investment in European markets. Boxton can use Mr. Pierre to work in United states and Canada to penetrate more in these markets.

Alternative 2: 50-50 partnership where both shares profits and investment.

In this alternative Boxton has to invest in European markets and they can use efficient management of Bar Maisse to grow in the European markets. This will not affect much on current markets in U.S. This option will help to penetrate more in the U.S markets as well as European markets.