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Baxton Technologies Market Analysis

Autor:   •  July 8, 2018  •  Case Study  •  545 Words (3 Pages)  •  12 Views

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Background and Problem:

The case study talks about baxton technologies a Canadian based company which specializes in the manufacturing of surface automotive hoists which are used by garages, service stations and other repair shops to lift cars for servicing. Baxton technologies has a good reputation of the hoist industry and is considered a leader in automotive lift safety in Canada and United States. The company is known for its high quality and for safety standards and most importantly five year warranty. Lifts are purchased by any automotive outlet that services or repairs cars, including new-car dealers, used-car dealers, specialty shops (muffler repair, transmission repair, wheel alignment), chain (Firestone, Goodyear, Canadian Tire), and independent garages. Baxton generally targets the specialty shop segment, in particular, shops that perform wheel alignment, where Baxtons scissor lift is especially effective.

Market Analysis:

The industry is dominated by two giants in the US industry . AV lifts and Berne manufacturing are the two big firms who have large portion of market share. Combining both they have a market share of 60%.One of baton’s competitor sells scissor lifts at 20% less than its price and Mete lifts sells at 5% less than baxton lift. The company’s success is based on a strategy of offering a quality and safety product that is primarily targeted to the needs of specific customers. . Due to heavy competition in the north American region the company is considering an expansion in Europe. There are various advantages to enter European market .They can get more revenue , global market share and due to lack to internal borders they can operate in a wider area. Baxton Technologies has three options in order to enter global market , they are 1.Licensing 2. Joint Venturing 3. Direct Investment.

Analyzing Alternatives:

Licensing:

  • Licensing will be one of the safest options if Baxton woud want to enter the European market . This can be done by giving Bar Maisse manufacturing rights and getting a loyalty bonus of 5% .
  • Basically, this is a risk free step and the returns would not be soo high
  • Moreover , we would not be of much influence to the company which impacts our growth in Europe.

Joint Venture:

  • We could split our investments and profit as 50-50 with Bar Maisse which would allow Baxton to get superior Hold on the European market
  • Baxton’s expertise in the field of hoist repair and production, and Bar Maisse’s experience with the European market,will likely bring us more revenue.

Direct Investment:

  • The cost incurred for setting up operations would be very high , though the company could make huge profits compared with others , this is still a high risk bet for Baxton Technologies.

Conclusion:

The best option for baxton Technologies would be to choose Joint Venture with Bar Maisse as the investment would be minimal and we could make use of Bar Maisse European experience and could plan for gaining market size as the scope seems to be more in Europe due to increasing number of cars which would incur repairs and eventually require services of Baxton lifts.

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