export possibilities af

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  • Created by: geogt002
  • Created on: 06-06-16 15:14
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  • figures 4,5,6
    • figure 4 implies that the furniture is growing at a faster rather than in the eurozone, this would imply that there is more demand for furniture so af might make more sales. however this depends on the current market size. lthough the market in the eurozone is growing much slower than in canada it might be a much larger market in the first place.
    • price rises are good in both countries. therefore given that they might be able to charge the same price in both countries, canada would appear the better country as they might sell more units. thier profit per product will be the same in either country yet they will sell more units in canada so make more overall profit.
    • figure 5 implies that he pound will get stronger against the euro but weaker against the canadian dollar. when exporting a weaker pound is better as it will make the product cheaper to canadian customers ( strong pounds are good for importing goods e.g sweden) this could imply that canada is a better country to export into.
    • canada
      • mostly english speaking. so it will make it easier to promote the british brand and easier to export. it is a lot further away than the eurozone so it might be harder to set up the expansion.
      • as canada is outside the eu they might charge an import tariff making af products more expensive than domestic competition.will help to generate risk bearing economies of scale.
    • eurozone
      • all part of eu. this means no import duties. eurozone has lots of different languages which will make communication and the initial expansion riskier and harder.
    • final judgement...
      • canada is the better option. with the eurozone the increase in price will be offset by the rise in the value of the pound so it would not be as profitable as canada. however the data alone is not enough to make the decision. in order to make a more reasoned judgement they should look at the size of the market and the current selling price s it will show the significance of the expected increases. in addition they should look further into the future as this is a big decision. it may take all year to happen which would mean the data provided would be irrelevant.


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