Loctite Hbr Case - Executive Summary

Loctite Corporation – International Distribution Fifty years of business has been good to Loctite, a manufacturer and marketer of adhesives, sealants, and other related products. Most recently, the company has started thinking about its international distribution strategy in Hong Kong; Loctite has turned to its already-established and successful ventures in other foreign countries to explore its potential strategies and find a model for success in Hong Kong and ultimately greater China. Currently, Loctite’s distribution strategy is composed of different levels, all building up to the eventual acquisition of equity in the international distributor in order to set its core brand and marketing mix. The first stage of expanding its distribution is research into which markets would be profitable for Loctite. Once a potential market has been identified, distributor selection begins. Selection is very stringent, and Loctite hand-selects a distributor that it feels it will work well with. Often the selection is based on recommendations from other distributors in neighboring geographic regions, other product lines carried by the distributor that may complement Loctite products (as opposed to compete with Loctite products), and the willingness and availability of the new distributor to adopt a Loctite brand identity. After selection, Loctite works to support its new distributor by sending sale representatives and engineers to jump start new market growth and internal knowledge of Loctite products within the new distributor. After finding success with a distributor through Loctite brand establishment as a main industrial adhesive, Loctite generally begins acquiring equity in its distributor until it owns the distributor outright. By owning its distribution channels, Loctite can ensure that its products and its brands continue to grow and gain market share, and it can also ensure that Loctite’s marketing and business plans are executed. In all new markets, Loctite