CASE BASED PRESENTATION

Grieve Corporation—A Small Business Export Strategy

Presented By- Muhammad Anowar (11502265)

Shallu Jamwal (11505827)Simratpal Kaur (11509804)Twinkle Saini (11507585)

INTRODUCTION

According to the US Department of Commerce, SMEs account for more than 90 percent of the growth in the exporter population.

Moreover, in terms of volume, SMEs are responsible for at least half of all U.S. exports to 85 countries. One such SME is Grieve of Round Lake, Ilinois.

GRIEVE, a small firm (125 employees) located near Chicago, manufactures laboratory and industrial ovens, furnaces and heat processing systems for the U.S. market.

Grieve began losing business because of two prime reasons-

(i) foreign competitors began to penetrate the U.S. market and (ii) its customers began to move overseas and started sourcing locally.

Despite more than a few lost sales, three reasons had dissuaded Grieve from aggressively exporting:

1. The nature of its product. Industrial ovens and furnaces, besides being relatively expensive, are large and bulky.

2. Doubts about chances of success abroad. Management also assumed that Grieve, as a SME, lacked the resources needed to support a successful export program.

They struggled to see how they could stretch their already-thin management structure to develop and direct export activity.

3. General concern about competition. Grieve battled seasoned exporters from Germany, Japan, and the United Kingdom. These companies were fierce rivals that made good products for a good price.

During a business trip to Asia, the president of Grieve met with potential candidates and successfully recruited exclusive agents for each country visited.

With the help of the International Trade Administration of the U.S. Department of Commerce, Grieve was able to identify potential Asian distributors.

Once Grieve had gained sufficient experience in the Asian market, export activities were expanded to other regions.

Moving into international markets has proved to be a major factor in the firm’s continued growth and success.

ANALYSIS

Over time, pressure built on Grieve, pushing it to a tough realization that something had to be done about international markets.

Not only they were losing customers overseas they were facing increased competition from foreign companies is the US market.

Mindful of these issues, Patrick Calabrese, Grieve's president, attended a trade seminar that featured market analysis and trade reports on countries in the Association of South East Asian Nations (ASEAN).

Listening to the opening presentations, Mr. Calabrese again wondered whether it made sense to build an export strategy to serve Asia.

Calabrese believed there might be opportunities for his firm in one of the world's fastest-growing regions.

To test the waters, Grieve decided to sample potential interest by advertising in industry reports and trade publications that circulated in Southeast Asia.

Advertisements were run in the Asian Industrial Reporter, Asian Literature Showcase, and World Industrial Reporter.

To learn more about the market, Calabrese worked with a representative from the International Trade Administration of the Chicago Export Assistance Center.

The trip was a big success for Grieve.

Interviews were held with potential 28 agents over 28 days and exclusive agents were signed up with each country.

With low shipping cost, the products were launched.

They even visited potential customers individually rather than relying on local managers (post marketing surveillance).

True to their engineering solutions, Grieve soon found ways to streamline its product into more compact forms.

Even it struggled there for shipping cost and local competition. Throughout it all, Grieve stayed optimistic.

They believed they have the best product in the market.

As Calabrese pointed out, “Our strength is that we are selling engineered products, using our 45 years of expertise to build something for them.”

SWOT ANALYSIS

Strengths: 1) 45 years of experience and expertise over the products.2) Strong domestic network.3) Quality of ovens and furnaces manufactured by them.

Weakness:4) Lack of confidence in management.5) Being a SME, it wasn’t able to compete with global companies.6) Doubts about chances of success abroad.

Opportunities:

1) The President of grieve attended a conference of ASEAN nations from which he was inspired. A new door for their business was opened.2) Got potential agents to expand the business in Asian countries.

Threats:

1) Global competition from rivals.2) Local customers were switching to other companies.

LEARNING OUTCOMES

Through his experiences in Southeast Asia, Calabrese learned some lessons about the keys to exporting successfully which we are mentioning here—

1. Know your products well.

2. Learn about the competition in the foreign market and the potential sales for your products.

3. Jump-start your brand image.

4. Work hard.

5. Build a strong response base back home.

6. Arrange for your own transportation, and do not rely on the potential representative to solve your problems for you.

7. Make someone at the home office the principal contact for the representative.

8. Learn the customs and business etiquette of the countries you visit.

9. Have the authority to make decisions and commit the company.

10. Be prepared.

CONCLUSION

On balance between the ups and downs, Grieve came to the realization that export was no longer an option. Exporting had to become part of Grieve’s strategy. Gradually, as Grieve gained experience in Asian markets, it expanded export activity to other countries.

By 2007, Grieve listed Latin America/Caribbean, South America, Western Europe, Africa, Middle East, Europe, Canada, and Mexico as export markets.

 

Grieve patiently handled a turning point in its well established business.

It used its strength of expertise against of weakness of short sightedness.

Grieve saved its sinking boat and made it float again and became a pioneer example of a company that counter reacted to its difficulties in the most effective way and ended up mastering its own weakness.

THANK YOU