Course Code Course Name Section Code

BU1233 International Market Entry Strategies BU1233

Percentage Weight of
Semester Type of Evaluation
Total Evaluation
Winter 2020 Assignment #2
15%

Course Instructor Due Date

Tony Bejjani Week 10 (Wed., March 18, 2020) at 11:00 am Total Marks: / 15

Student Name Student ID # Team #

Purus Wood Products: Developing a Competitive Edge

Purus Wood Products (PWP) is a small but successful Brazilian firm that produces standard types and
grades of lumber for the domestic construction industry. This includes 2x4s and 2x6s used in framing,
as well as plywood and particle board. With Brazil into the second year of an economic recession, the
construction industry has experienced a significant decline in housing starts. Fewer houses are being
built and there is likely going to be a slowdown in the construction industry for the immediate future.

Purus Wood Products could wait out the slowdown. It is projected to be temporary and will likely last
only a year or two, after which construction will likely rebound. The company has an established client
base and strong relationships throughout the industry, which would allow it to ramp up quickly once
housing starts began to rise again. On the other hand, in the short term, the company would
experience some contraction, including some layoffs. The company is a close-knit operation, and
senior management values the skills and loyalty of its workers. It does not want to alienate its base
through measures that would demoralize employees or undermine their commitment to the company.

Eastern Promise

The company had already been contemplating diversifying its markets as a way of buffering itself
against cyclical downturns in its domestic market. A few years ago, irritated with the intransigence of
some trading partners, it had started looking at expanding in eastern Asia in general, and Korea in
particular, as a growth market.

At the time, it sent over a scouting team made up of several senior managers to get a sense of the
market and what it would take to penetrate it successfully. The scouting team reported that Korea was
poised for renewed economic expansion as it rebounded from the global financial meltdown of 2008
and its aftereffects. The projected scale and pace of construction and the need for increased lumber
imports were impressive, yet there were two significant impediments facing PWP. First, Korean
building standards were very different. Lumber grades and dimensions were unique to Korea and not
compatible with those in PWP’s home market. Second, Korean prices were highly competitive. For
PWP to compete in Korea, it would have to sell lumber at prices that were far lower than those in
Brazil.

At the time, these two objections seemed decisive and PWP shelved any thoughts of expansion into

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the Korean market. Now with a slowdown looming, the VP of business development was taking a
close second look at the opportunity.

Technology to the Rescue

Since the original scouting expedition, a few things had changed in the lumber industry. The
introduction of new technologies had automated many of the processes associated with picking,
cutting and curing wood. Equipment was now available to cut wood to a variety of standards and
prepare it in a variety of ways for shipment and use. Additionally, freshly harvested wood needed to
dry out before cutting, so that it would not bend or warp during the drying process. New types of kilns
were now available to accelerate this process. Finally, there was the challenge of shipping. If the
lumber could be dried, cut, bundled and then loaded on vessels automatically, this might reduce costs.
That would make PWP’s pricing competitive in Korea. While lading technology at the ports had
evolved significantly with the prevalence of containerization, the real problem was the timing of the
various steps in the process. The wood first had to dry. Then it was cut. Then it was loaded into
containers for shipping. It then sat in the containers during transport. The obvious issue was that the
wood spent too much time “sitting around”, prompting PWP to consider how to redesign the process.

There was another challenge, however. The VP of business development recognized that PWP had a
relatively short window of opportunity to develop the Korean opportunity. The domestic recession
would not last forever; once it had passed, the other executives in the company would probably turn
their attention back to domestic markets. Whatever was to be done had to be done quickly. The VP
wondered what options were available to enable rapid penetration of the Korean market.

Finally, there was the question of how to pay for all this. New technology costs money, as did
retraining workers in its use. Given the current slowdown, securing additional funding, even from
familiar and reliable bankers, could prove to be a problem.

The VP of business development was convinced that the adoption of new technology in new ways
could create an opportunity in Korea that could have positive spin-off effects for other markets,
including domestic ones. The notion of navigating the current slowdown by developing new outlets
had considerable appeal. Over the long term, the expansion in Korea would guarantee PWP virtually
unlimited demand for its products, without the irritations of local protectionism.

The first step was to put together a business case for having another look at the Korean market. The
case would depend on two critical factors: preparing wood to Korean standards and cutting costs to
make the pricing competitive in Korean markets.

The VP has turned to you for advice in developing his case. Specifically, he wants you to set out the
kinds of questions that the case should address, as well as some ideas about the methodology to be
used in developing answers to those questions.

Case Study Questions

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1. Develop a table of contents for the business case. What issues does it need to address?
(3 Marks)

2. How can PWP develop the information to answer the questions in the business case?
(3 Marks)

3. What are the key considerations regarding technology? How can these be resolved? (3 Marks)

4. What strategies are available to PWP to accelerate the process? (3 Marks)

5. How can the venture be financed? (1.5 Marks)

6. What are the risks involved in the venture and how can they be managed? (1.5 Marks)

Although based on the research of actual events, organizations and/or individuals, this case study is
fictional and is intended to support learning. Cases are not intended to serve as endorsements,
sources of primary data or illustrations of effective or ineffective management.

Instructions:
a) Print this page with your student name and ID #, using font 11.
b) One and a half-space typed.
c) Each team member should fill the “Peer Evaluation Form”, and submit it with the assignment.
No email submission is accepted whatsoever!
d) Provide references on the last page of the assignment using the APA style.
e) Plagiarism: ZERO MARKS.

GROUP PEER EVALUATION FORM

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 Group Peer Evaluation Rubric
(to be completed by the team
captain/leader for each
assignment/project)
Criteria:
Mark Team Role fulfillment
Participated in all group
meetings, assumed leadership
4 roles as necessary. Did the
work that was assigned by the
group.
Participated In most group
meetings. Provided leadership
3
when asked. Did most of the
work assigned by the group
Participated in some group
meetings.
2 Provided some leadership. Did
some of the work assigned by
the group.
Participate in few or no group
meetings. Provided no
1 Provided no feedback to others.
leadership. Did little or no work
assigned by the group
Little to no Participation. Did
0 little or no work assigned by the
group
Evaluate group members (including yourself):
Name
 
 
 
 
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Team Captain/Leader:  
Communication
Always listens to, shares with,
and supports the efforts of
others. Provided effective
feedback to other members.
Relays a great deal of
information - all relate to the
topic.
Usually listens to, shares with,
and supports the efforts of
others. Provided some effective
feedback to others.
Relays some basic information
- most relates to the topic.
Often listens to, shares with, and
supports the efforts of others.
Provided little feedback to
others. Relays very little
information - some relate to the
topic.
Rarely listens to, shares with, or
supports the efforts of others.
Does not relay any information
to teammates
Did not listen, share with others
or support the group. Provided
no feedback to others.
Team Role Communicatio
Fulfillment n Proficiency
(Out of 4) (Out of 4)
Page 4 of 4
Job proficiency
Did more than others - highly
productive. Work is complete,
well organized, with no errors
and is done on time or early.
Did their part of the work -
cooperative. Work is generally
complete, meets the
requirements of the task, and is
mostly done on time. Works well
with others, rarely argues.
Could have done more of the
work - has difficulty, requires
structure, directions, and
leadership. Work tends to be
disorderly, incomplete, and not
accurate and is usually late.
Minimal work - Minimum
contribution, does not work well
with others. Work is sloppy and
incomplete, excessive errors
and is mostly late or not at all.
Did not do any work - does not
contribute, does not work well
with others. Work is sloppy and
incomplete, excessive errors
and is mostly late or not at all.
Job Total
(Out of
(Out of 4) 12)
0
00
0
00
   00

General Comments:

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