Case Study Cameron Auto Parts Essay

1. Cameron was remune stray to set about licensed to McTaggart. elaboration strategies, as discussed in class, have different barriers and costs. For example, for Cameron to have entered a joint pretend with the play along would have cost both(prenominal)(prenominal) sides a lot of money and time. For Cameron to have expanded into the UK what Andy had argued would have been the most pricy and time consuming of the four options. The comp some(prenominal) definitely has money, however the extra coin needed to finance such overlarge operations isnt available.Fin on the wholey, for Cameron to have plainly exported into the UK economy could have been easy however, it is hardly what they are doing now. This leaves them limited to the core that the importers are able to pay in foothold of duty and freight, currency exchange, as blond explains, as well as the cater of never knowing how long the goods go forth take(International Management, pg 254) to arrive. Also, with th e developing need, having more(prenominal) narrates would pull up Cameron to build a new manufacturing mental quickness to accommodate for the higher payoff. This would exuberate their need for that arcsecond plant.All of this leaves licensing to be the most operable option as it brings the least amount of capital, both financial and human. Cameron Auto move are paid royal family fees as well as the costs of vista up the manufacturing and training without having to spend a good deal money to get the UK plant running.2. I would say that McTaggart is a good prime(a) for the company to become the licensee of the UK for Cameron. According to prove 3, even though they had sales of 9 one thousand million from 1991, it states that this is because their sales took a plump down against a U.S product of superior tonus (International Management, pg 255) It also states that they have the capacity to augment production substantially. This means that given the right product, th ey are already capable of producing match to demand. Further, because arenaceous himself knows on that point is a enormous (and growing) demand for the part, coupled with the current customers of Cameron, there is nigh already a real large customer base and all it needs is a facility that is precise seriously interested in enough exclusive agents for the UK market (International Management, pg 256) in order to supply that demand accordingly.McTaggart also has an refined credit record, and having been in operation for almost 150 years, it is clear that they are in the business for the long run and would not risk damaging situations and dishonored contracts.3. The ii had come to a compromise of 2% in royalty fees. They came up with the rate of using integrative duologue techniques. They both knew that they wanted the situation to work, and neither of them came in with an unrealistic starting point or forceful attitude distributive techniques. Alex began the negotiation at 3 % while Sandy pushed a few times for 1.5%. regular(a) though Sandy gave an offer of 2% on the first million , he still kept close to his sign offer by saying that any profits after the first million would be at a 1.5% royalty rate. Pleasingly, they both agreed to meet in the middle, at 2%.Without knowing the heavy royalty limit in the UK, the text edition (International Management, pg 99) does state that 3% is a pie-eyed limit. This implies that governments consider this rate reasonable and not high enough to hurt the domestic help company. That being said, 2% is the right rate. An distinguished piece of information to take label of is the fact that even though their production skills were not as up-to-date as Camerons an issue that would be ascertain once the set-up of the facility is completed McTaggart already has original cost saving ideas use in their current plant.This indicates an ingenuity that mayhap Camerons techniques could use. Because Alex specifically state s that he would require a flow-back clause in their agreement, this is an added take in to compromising that 1% since it is only a matter of time before McTaggarts facility comes up with cost-saving techniques for the flexible couplings. This would more than make up for the compromise.