Bio-Taylor Case Study
A1(c).
In any international expansion, there are many possible risks over domestic marketing. In Canada, the two main risks are governmental regulations and currency fluctuations.
• Government regulations: There are two areas of concern, importation restrictions and solid waste restrictions. The Bio-Butler uses two non-toxic household chemicals in the production of the liner, dried lemon juice and sodium bicarbonate. Neither one currently cause any importation problems. Since there are no national standards, local governments decide the solid waste restrictions. Although the Company’s liner would minimally increase the volume of compost material to be deposed, its usage will significantly increase household compliance and render the compost
volume increase as irrelevant. (City of Toronto, 2015) To mitigate this risk, the company is taking the following initiatives:
1. The Company will utilize a company that monitors proposed regulations and legislation on a local, state or provincial, and federal level that affects the Company’s products. This will provide timely notifications on proposed changes.
2. The Company will seek out a Non-Governmental Organization (NGO) within the environmental or waste management sector that will endorse and advocate the Company’s products. They will help voice opposition to any proposed adverse regulations or legislation.
3. When warranted, the Company will engage a paid lobbying firm to oppose or modify the proposed detrimental rules or legislation.
• Currency fluctuations: This is a concern in any international marketing. Although the Canadian dollar has been relatively stable over the long term, the nation’s economy is highly correlated to natural resource prices including fossil fuels and metals. By maintaining the local pricing, periods of a strengthening Canadian dollar would negatively impact the company’s net sales, revenue and profitability. To mitigate this risk, the company is taking the following initiative:
1. The Company will utilize currency contracts matched to the volume of sales in Canada. The purchase of call options allows a financial gain to offset lost profits. Due to the embedded costs of this tool, it will marginally lower the normal profitability. This initiative is only helpful during dramatic or extended periods of strengthening.
In any international expansion, there are many possible risks over domestic marketing. In Canada, the two main risks are governmental regulations and currency fluctuations.
• Government regulations: There are two areas of concern, importation restrictions and solid waste restrictions. The Bio-Butler uses two non-toxic household chemicals in the production of the liner, dried lemon juice and sodium bicarbonate. Neither one currently cause any importation problems. Since there are no national standards, local governments decide the solid waste restrictions. Although the Company’s liner would minimally increase the volume of compost material to be deposed, its usage will significantly increase household compliance and render the compost
volume increase as irrelevant. (City of Toronto, 2015) To mitigate this risk, the company is taking the following initiatives:
1. The Company will utilize a company that monitors proposed regulations and legislation on a local, state or provincial, and federal level that affects the Company’s products. This will provide timely notifications on proposed changes.
2. The Company will seek out a Non-Governmental Organization (NGO) within the environmental or waste management sector that will endorse and advocate the Company’s products. They will help voice opposition to any proposed adverse regulations or legislation.
3. When warranted, the Company will engage a paid lobbying firm to oppose or modify the proposed detrimental rules or legislation.
• Currency fluctuations: This is a concern in any international marketing. Although the Canadian dollar has been relatively stable over the long term, the nation’s economy is highly correlated to natural resource prices including fossil fuels and metals. By maintaining the local pricing, periods of a strengthening Canadian dollar would negatively impact the company’s net sales, revenue and profitability. To mitigate this risk, the company is taking the following initiative:
1. The Company will utilize currency contracts matched to the volume of sales in Canada. The purchase of call options allows a financial gain to offset lost profits. Due to the embedded costs of this tool, it will marginally lower the normal profitability. This initiative is only helpful during dramatic or extended periods of strengthening.