HARDING TOOL CORPORATION

STUDY

By GPL Consulting Company

Companhia Internacional de

Comercio

Harding’s head Office

Where and who?

Mr. Lloyd Wilcox: Overseas Sales Manager

Ohio,USA

Mr. Jose Cabral: PresidentRio de Janeiro, Brazil

Commodities Broker

Ms. Julia Peters: Overseas Development

CorporationNY, USA

Year Real per U.S Dollar

1978 20.920

1979 42.530

1980 65.500

1981 127.800

1982 252.670

1983 984.000

1984 3,184.000

1985 10,490.000

Economic situation

1978

1980

1982

1984

0

500

1000

1500

2000

2500OtherChileMexicoVenezuelaColombiaBrazilArgentina

Harding’s Gross Sales to Latin America (in thousands of US $)

1978 19850

2

4

6

8

10

12

% of total Latin American Gross Sales

The Proposition of CIC

US$ 400,000 in assorted gears US$ 400,000 in shoes

Oxfords 4,500 13.50$

Loafers 6,200 12.00$

Casual 2,500 9.00$

Products Quantity Price/shoes

Pumps (all leather)

8,000 10.00$

Pumps (man-made soles)

12,000 8.00$

Flats 4,000 7.00$

Sandals 7,670 5.00$

Products Quantity Price/shoes

!

Communication

Strengths:- Good availability of

executives- Meetings immediately

planned

Weaknesses: No

Multicultural Relationship

Strengths:- Countertrade , Brazilian

proposition: a new way to face the crisis

Weaknesses:- Lack of confidence

Ethics

- Origin of goods?

Management

Strengths:- Reasonable management

decisions

Weaknesses:- Controversial opinions

Statement of the problem

HTC has to accept this deal to be able to improve its sales in Brazil or

not?

Option 1:

Acceptance of the proposition just like it is offered with the agreement of sending the tools once the shoes have

been received.

Advantages: Disadvantages:

- Opening of a new way of trading- Increase of your sales

- Risk of failure in the shoes sales- Lost of 2% on commisions

Option 2:

Refuse of CIC’s proposition and possibility to explore other foreign market

Advantages:

- No risk

Disadvantages:

- Lost of Latin American market- Reduction of sales- Lost of time to analyse new markets

Option 3:

Acceptance of CIC’s proposal setting up a trading subsidiary company from your own

Advantages: Disadvantages:

- Increase of Latin American sales- Opening of your market- New way to face the crisis - Possibility to make an extra profit

- Spending of money to create a new subsidiary- Lost of time to study the market…- Risk of failure on the sale of the shoes

Option 4:

Make a deal with CIC for a small quantity of goods, as pilot operation, to see how it works, dealing with a Commodities

Broker in New York.Advantages: Disadvantages:

- No bigger risks- No lost of the Latin American market

- Lost of 2% on commissions- Risk of failure on the shoes sales

!HTC

Shoes Buyer (US)

Commodities broker, NY

CIC

Shoes Company (BR)

Option 5:

Share the deal with the American Companies which are already doing that, as a first step. Once

the experience is obtained, do it by yourselves alone.

Advantages: Disadvantages:

- More sure- No lost of Latin American market

- At the beginning, fewer profits

Option 6:

Contact other companies in USA to try to establish a Joint Venture Consortium for this kind of deal and

promote the same kind of Consortium in Brazil to be stronger, diversify the products and attract solid

companies reducing the risks.

Advantages:

- Fewer risk- Maintain of Latin American market- Stronger market

Disadvantages:

-Take more time

Option 1:Acceptance of the proposition just like it is offered with the agreement of sending the

tools once the shoes have been received.

Option 2: Refuse of CIC’s proposition and possibility to explore other foreign market.

Option 3:Acceptance of CIC’s proposition setting up a trading subsidiary company from your

own.

Option 4:Make a deal with CIC for a small quantity of goods, as pilot operation, to see how it

works, dealing with a Commodities Broker in New York.

Option 5:Share the deal with the American Companies which are already doing that, as a first

step. Once the experience is obtained, do it by yourselves alone.

Option 6:Create a Joint Venture Consortium and promote the countertrade.

Our recommandation:

Option 4 + Option 6