Crosswell International

Doug MacLean,

WCB 665

Prof. Paliwal

25 March 2014

Crosswell International Case Study

Executive Summary

Crosswell International is a U.S.-based manufacturer and distributor of health care products. Crosswell has recently created a new line of disposable diapers, Precious Ultra Thin Baby Diapers. Their new diapers have gained quick success and gained popular reviews with their sales reps. Hector Lans, Crosswell’s CEO is convinced by the quick success of their new diaper line that they had great potential to be successful in Brazil. Crosswell relied heavily on their two brokers, Doug and Geoff Mathieux, to begin researching all the possibilities in Brazil and to find possible distribution channels. After researching the Brazilian Market the Mathieux brothers realized that Brazilians base many purchasing decisions on cost, not quality. Soon thereafter, Crosswell International’s CEO has been approached by Leonardo Sousa, the president of Material Hospitalar, a distributor of health care products throughout Brazil. Sousa is interested in distributing Crosswell’s Precious Ultra Thin Baby Diapers only if an acceptable arrangement regarding pricing and payment terms can be reached. Crosswell’s manager for export operations, Geoff Mathieux, followed up the preliminary discussions by putting together an estimate of export costs and pricing for discussion purposes with Sousa. Crosswell needs to know all of the costs and pricing assumptions for the entire supply and value chain as it reaches the consumer. Mathieux believes it critical that any arrangement that Crosswell enters into results in a price to consumers in the Brazilian marketplace that is both fair to all parties involved and competitive, given the market niche Crosswell hopes to penetrate.

Brazilian Diaper Market

The current diaper market is currently broken down into 4 segments;

1. MNC’s who establish subsidiaries in Brazil (40%)

2. Brazilian Companies Producing in country (30%)

3....