Jolson Automotive Hoist

Case – Study Analysis of

Jolson Automotive Hoist :

The Market Entry Decision

I.

Major Issue / Problem

Jolson Hoist Automotive is looking for an opportunity to increase sales and potentially modifying its

marketing tragedy. Mark Jolson, president of Jolson Hoist Automotive needs to determine if it is

feasible to enter the European market or if a more aggressive strategy in the US market will increase

sales.

II. Alternative Course of Action

(With Advantages & Disadvantages and Quantitative Implications of Each)

A. European Market - Licensing

1. Advantages :

a. Limits Jolson’s financial risk when entering a new market.

b. It helps Jolson’s to work with a partner that understands the European market and is

already an established European company.

c. A potential increase of $137,333.00 in sales.

d. Bar Maisse’s management has integrity.

2. Disadvantage:

a. Jolson’s would have to give up manufacturing rights.

b. Safety features may not be done to the same standards.

c. Bar Maisse could end up taking control over operations.

3. Quantitative Implications:

In order to have a good sense of what the potential profit will be, we need to consider the

averages from the US and takes those estimates as possible indication of how performance

will be in Europe. In Appendix 9, the average sale from US is $4,676,000. If we take the total

population we get an estimated average of $.20 in sales from every individual. If we take

this factor and multiple it by the European Union population an estimated revenue of

$6,659,757.58 is obtained. Since only 5% of royalties is received when licensing the product

a projected $89,840 dollars are generated in profit.

B. European Market – Joint Venture

1. Advantages

a. Minimize Losses; you will share the downfall with someone else.

b. You can form a Strong Partnership.

c. Your partner understands the market.

d. Expected Profit increases ten times compared to if you licensed the...