INSTITUTE OF MARKETING & MANAGEMENT

MANAGING INTERNATIONAL OPERATION

CASE STUDY

TMC

SUBMITTED TO SUBMITTED BY

PROF. R .K. WADHWA ASHISH KELKAR

08-IV-811

TOWEL MANUFACTURING COMPANY

A-1 Strengths and Weakness of the company are as follows

Strengths

1-It is largest manufacturer of towels for export, its leading export market with a share of 90% of its total sales is United States of America and rest comes from no of European countries.

2-Company has plenty of factory space and access to labour and technical assistance.

3- Company enjoys a reputed brand image in the market with its current ocean breeze line is dependable, durable and priced competitively.

Weakness

1-A number of small Pakistani companies have been operating with smaller overheads and have eaten in to TMC’s market share.

2-Unlike a number of small companies ,TMC does not produce solid coloured towels and is thus unable to meet the demand for this product line , this is making it vulnerable to competition from newer and smaller producer of towels in Pakistan’s.

3-The profit margin of 5% on current product line on white towels is very low.

4-It will loose favour from United States importers if it cannot supply dyed towels to complement its current product line.

A-2 TMC foreign and domestic market analysis is as follows –

TMC is largest manufacturer of towels in Pakistan and mainly into export with United States America counting for sales up to 90% and rest coming from number of European countries. TMC solely for export, management is not fully committed to exporting but also has a decade of export behind it. TMC has started experimenting with European markets .In the commonwealth of independent states (CIS), profit margin are 5% for white towels and 10% for dyed towels .Barter has, in past been the preferred mode of payment in the area now covered by CIS .This and TMC limited marketing experience in the area are disadvantage .As a regard Western Europe, TMC lacks of marketing experience in the region is major weakness.

As far as domestic market is concerned the company is facing stiff competition from small towels manufacturer with more modest overheads. Demand is growing for dyed towels and company is aware some competitors are making dyed towels to meet the demand and likewise company is also aware the United States can anytime pass legislation of not importing towels from Pakistan.

A-3

Analysis of the recommended strategy

Product Adaption and Development

First TMC should continue to produce its white ocean breeze towels as it is where company experience lies and then it should also produce dyed towels in addition to its traditional white towels this will enable to meet the demand and thus compete with suppliers to both its current and potential markets. Hence it will be benefit from both larger profit margins obtained from dyed towels and from expanded trade. The new product line may enable the company to obtain the business of distributions chains larger retailers such as Sears and Roebuck and Montgomery Ward’s and other distributor.

Market Development

TMC should concentrate on both its domestic market as well as international market not only in United States of America but other European countries. This would provide advantage to turn to other market such as Common Wealth of states and Western Europe. This will help company to turn to other countries in case of recession and also provide company with international presence, exposure and experience and greatly increasing company’s potential customer and sales base.

Export marketing plan

To penetrate the market for uncolored towels TMC must carry out certain steps, first it must obtain information on future fashion trends in United States and eventually in CIS and Western Europe

Second it could seek to become supplier for a major retail chain in the United States, the financial rewards are quite high and substantial.