Harvard Case - Beyond the Border
"Beyond the Border" Harvard business case study is written by Paul Boothe. It deals with the challenges in the field of General Management. The case study is 8 page(s) long and it was first published on : Jul 11, 2014
At Fern Fort University, we recommend that Beyond the Border (BtB) pursue a strategic expansion into the emerging markets of Southeast Asia, specifically focusing on Vietnam and Indonesia. This expansion should be driven by a multi-pronged approach that leverages BtB's core competencies in innovation, technology and analytics, and supply chain management while prioritizing corporate social responsibility and sustainability practices. BtB should also implement a robust change management strategy to ensure a smooth transition and successful integration of its operations in these new markets.
2. Background
Beyond the Border is a successful Canadian company specializing in the design and manufacture of high-quality, sustainable outdoor gear. Driven by its founder, Sarah, BtB has established a strong reputation for its commitment to environmental sustainability, innovation, and ethical business practices. The company faces a critical juncture as it seeks to expand its reach beyond its established North American market. BtB's current growth strategy primarily relies on increasing sales within North America, but this approach may limit its long-term potential.
The case study highlights the challenges and opportunities associated with BtB's potential expansion into Southeast Asia. The region presents a vast and growing market for outdoor gear, driven by increasing disposable income, a burgeoning middle class, and a rising interest in adventure tourism. However, BtB faces significant challenges, including navigating complex cultural landscapes, managing supply chain complexities, and ensuring compliance with local regulations.
3. Analysis of the Case Study
To assess BtB's expansion strategy, we utilize a combination of frameworks:
a) SWOT Analysis:
- Strengths: Strong brand reputation, commitment to sustainability, innovative product development, strong supply chain management, experienced leadership team.
- Weaknesses: Limited international experience, potential cultural barriers, reliance on North American market.
- Opportunities: Growing demand for outdoor gear in Southeast Asia, potential for strategic partnerships, access to skilled labor and manufacturing resources.
- Threats: Competition from established local brands, political and economic instability, potential supply chain disruptions.
b) Porter's Five Forces:
- Threat of New Entrants: Moderate, as entry barriers in Southeast Asia are relatively low due to the availability of manufacturing resources and skilled labor.
- Bargaining Power of Buyers: Moderate, as consumers in Southeast Asia are increasingly discerning and price-sensitive.
- Bargaining Power of Suppliers: Moderate, as BtB relies on a global supply chain with potential for disruptions and price fluctuations.
- Threat of Substitute Products: Moderate, as consumers have access to a wide range of outdoor gear from both local and international brands.
- Competitive Rivalry: High, as the Southeast Asian market is characterized by intense competition from both established local brands and international players.
c) Strategic Planning:
- Mission: To provide high-quality, sustainable outdoor gear that inspires people to explore the outdoors while minimizing environmental impact.
- Vision: To be the leading global provider of innovative and sustainable outdoor gear, known for its commitment to ethical business practices and community engagement.
- Values: Sustainability, innovation, ethical business practices, customer satisfaction, employee well-being.
d) Financial Analysis:
- Market Size and Growth: Southeast Asia represents a significant market opportunity for BtB, with projected growth in the outdoor gear market.
- Profitability: BtB's strong brand and commitment to sustainability position it to achieve high margins in Southeast Asia.
- Investment Requirements: BtB will need to invest in establishing local operations, including manufacturing facilities, distribution networks, and marketing initiatives.
4. Recommendations
To achieve successful expansion into Southeast Asia, BtB should implement the following recommendations:
1. Target Market Selection:
- Focus on Vietnam and Indonesia: These countries offer a combination of strong market growth potential, a growing middle class, and a favorable regulatory environment for foreign investment.
- Conduct thorough market research: BtB should conduct in-depth market research to identify specific consumer segments, understand their needs and preferences, and assess the competitive landscape.
2. Entry Strategy:
- Joint Venture or Strategic Partnership: BtB should explore partnerships with local companies to leverage their expertise in navigating local regulations, establishing distribution channels, and building brand awareness.
- Gradual Expansion: BtB should adopt a phased approach to expansion, starting with a pilot project in one country before scaling up operations to other markets.
3. Product Adaptation:
- Adapt Products to Local Needs: BtB should adapt its product offerings to meet the specific needs and preferences of Southeast Asian consumers, considering factors such as climate, terrain, and cultural preferences.
- Develop New Products: BtB should consider developing new products specifically tailored to the Southeast Asian market, leveraging its expertise in innovation and sustainability.
4. Marketing and Sales Strategy:
- Build Strong Local Brand Presence: BtB should invest in building a strong local brand presence through targeted marketing campaigns, partnerships with local influencers, and participation in outdoor events.
- Leverage Digital Marketing: BtB should leverage digital marketing channels, including social media, search engine optimization, and e-commerce platforms, to reach a wider audience in Southeast Asia.
5. Supply Chain Management:
- Establish Local Manufacturing: BtB should explore establishing local manufacturing facilities in Southeast Asia to reduce shipping costs, improve lead times, and create local jobs.
- Develop a Sustainable Supply Chain: BtB should prioritize sourcing materials from sustainable sources and working with suppliers who share its commitment to environmental responsibility.
6. Corporate Social Responsibility:
- Invest in Local Communities: BtB should invest in local communities through initiatives that support education, environmental conservation, and economic development.
- Promote Diversity and Inclusion: BtB should foster a diverse and inclusive workplace that reflects the local community and promotes equal opportunities for all employees.
7. Change Management:
- Communicate Effectively: BtB should communicate its expansion plans clearly and transparently with employees, stakeholders, and the local community.
- Provide Training and Development: BtB should provide training and development opportunities to its employees to prepare them for the challenges of working in a new market.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of BtB's strengths, weaknesses, opportunities, and threats, as well as the competitive landscape in Southeast Asia. They are consistent with BtB's mission and values, and they consider the needs of both external customers and internal clients. The recommendations are also attractive from a financial perspective, as they are expected to generate significant returns on investment.
The recommendations are based on the following key assumptions:
- The Southeast Asian market for outdoor gear will continue to grow at a significant rate.
- BtB can successfully adapt its products and marketing strategies to meet the needs of Southeast Asian consumers.
- BtB can find reliable and sustainable suppliers in Southeast Asia.
- BtB can effectively manage the challenges associated with operating in a new market.
6. Conclusion
BtB has a strong foundation for success in Southeast Asia, with its commitment to innovation, sustainability, and ethical business practices. By implementing the recommendations outlined above, BtB can capitalize on the significant growth potential of the region while maintaining its commitment to its core values.
7. Discussion
BtB could consider alternative expansion strategies, such as focusing on a single country with a high concentration of outdoor enthusiasts or establishing a purely online presence in Southeast Asia. However, these options may limit BtB's growth potential and may not be as effective in building a strong local brand presence.
The recommendations are subject to certain risks, including:
- Political and Economic Instability: Political and economic instability in Southeast Asia could disrupt BtB's operations and impact its profitability.
- Competition: BtB faces intense competition from both established local brands and international players.
- Cultural Barriers: BtB may face challenges in navigating cultural differences and adapting its marketing and sales strategies to local preferences.
8. Next Steps
To implement the recommendations, BtB should take the following steps:
- Conduct in-depth market research in Vietnam and Indonesia.
- Identify potential partners for joint ventures or strategic alliances.
- Develop a detailed business plan for expansion into Southeast Asia.
- Secure funding for the expansion project.
- Establish a dedicated team to oversee the expansion process.
- Develop a comprehensive change management plan.
- Implement a phased approach to expansion, starting with a pilot project in one country.
BtB should monitor its progress closely and adjust its strategy as needed. By taking a strategic and thoughtful approach to expansion, BtB can achieve long-term success in the Southeast Asian market while continuing to uphold its commitment to sustainability and ethical business practices.
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Case Description
In February 2011, the senior associate deputy minister of Industry Canada was appointed as the Canadian prime minister's personal representative to the bi-national team charged with developing the "Beyond the Border Action Plan" to both improve security and streamline cross-border commerce and travel between Canada and the United States. He was immediately faced with a range of decisions on how to proceed - whom to consult, which Canadian team members to hire, which of many possible priorities to pursue in discussions with his U.S. counterparts and which steps to take to manage a complex process involving a multiplicity of large and powerful Canadian government departments and agencies as well as private sector interests. While he didn't yet have strategies to address these issues, he knew that he would have to formulate them rapidly. Both the prime minister and the U.S. president had made clear their desire to move quickly - ideally, an action plan was to be in place within six months.
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