As the Director of Business Development at Aero Motors, I have evaluated each of the two possible options to introducing GenMax’s subsidiary, Aero Motors to the North American Market. The first option is the go-it-alone strategy in which we will attempt to penetrate the market with our own brand. The second option is to partner with a local company which will minimize the risk and enable Aero Motors to leverage the partner’s infrastructure and favorable brand image. After much consideration, it is evident that there are advantages and disadvantages to each alternative. Below I have delineated each option based on the risks and rewards and as it relates to effective ...view middle of the document...
The lack of infrastructure is an additional risk that must be explored. The fact that Aero Motors has no infrastructure in North America, as noted by Raymond Burke, technical director, will cause product exposure to be limited. Additionally, when service issues arise, Aero Motors will be unable to provide the ongoing service which will impact sales.
Partnering: Risk and Reward
On the other hand, partnering with a local company will also have its own set of risks and rewards. The first benefit of a partnership is that it would allow GenMax to take advantage of the partner’s consumer motivational factor which will create the initial acceptance and aid in positive purchasing behavior. Additionally, Aero Motors would be able to benefit from the partner’s brand image and equity which will provide a positive perception as to the quality and thus validity of the product. Also to not be taken for granted, is the knowledge the partner would have of the local market, providing Aero Motors with an exceptional advantage of not having to do the market research to understand the different cultures. This would also permit Aero Motors to obtain a larger part of the market at a much faster pace. Finally, simply sharing the risk is a reward because it would minimize possible losses.
In reference to the risks, the largest risk associated with partnering is the control that Aero Motors would have to relinquish as is the case with partnerships. Following this approach will also deter Aero Motor’s ability to establish themselves in the North American market as was mentioned by the VP of Marketing, Kathy Lee. Ms. Lee asserts that it would make it much more difficult to make an impact later on. While sharing the risk is a reward that minimizes losses it comes at the cost of having to also share the benefits. The profits earned will have to be divided with the partner diminishing the return.
How to Effectively Use the Aero Brand:
Utilizing the existing brand identity, while minimal, Aero Motors can use their international esteem to garner buzz much as another car maker, Fiat, has done. The prestige of the Pinnacle in the North American market, although to...