Case Study: Going International Grainger Supply Company is a large manufacturer and distributor of office supplies. It is based in New York but sends supplies to firms throughout the United States. It markets its supplies through periodic mass mailings of catalogues to those firms. Its clients can make an order over the phone, and Grainger ships the supplies upon demand. Grainger has had very high production efficiency in the past. This is attributed partly to low employee turnover and high morale, as employees are guaranteed job security until retirement. Grainger already holds a large proportion of the market share in distributing office supplies in the United States. Its main competition in the United States comes from one U.S. firm and one Canadian firm. A British firm has a small share of the U.S. market but is at a disadvantage because of its distance. The British firm’s marketing and transportation costs in the U.S. market are relatively high. Although Grainger’s office supplies are somewhat similar to those of its competitors, it has been able to capture most of the U.S. market because its high efficiency enables it to charge low prices to retail stores. It expects a decline in the aggregate demand for office supplies in the United States in future years. However, it anticipates strong demand for office supplies in Canada and Eastern Europe over the next several years. Grainger’s executives have begun to consider exporting as a method of offsetting the possible decline in domestic demand for its products. Required: a. Grainger supply company plans to attempt penetrating either the Canadian market or the Eastern European market through exporting. Assess the factors that deserve to be considered in deciding which market is more feasible. The discussion should include an industry or market analysis and the feasible factors should arise from the analysis. (50 marks) APU Level 3 Asia Pacific University of Technology & Innovation 20210401 AQ078-3-3 -GFIN Individual Assignment Page 4 of 4 b. Appraise the theories of international business that motivated Grainger to expand their business internationally in the short and long term. (50 marks) (Total: 100 marks) END OF QUESTION
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