Case Study Cameron Auto Parts Essay

1. Cameron was dear to obtain licensed to McTaggart. Expansion st valuegies, as discussed in class, have different barriers and costs. For example, for Cameron to have entered a joint venture with the political party would have cost both sides a lot of money and time. For Cameron to have expanded into the UK what Andy had argued would have been the most expensive and time consuming of the quatern options. The company definitely has money, however the extra cash needed to finance such large operations isnt available.Finally, for Cameron to have simply exported into the UK sparing could have been easy however, it is exactly what they atomic number 18 doing now. This leaves them limited to the amount that the importers are able to pay in terms of duty and freight, currency exchange, as Sandy explains, as well as the issue of never cognize how long the goods will take(International Management, pg 254) to arrive. Also, with the developing need, having more orders would force Came ron to configuration a new manufacturing quickness to accommodate for the higher production. This would exuberate their need for that foster plant.All of this leaves licensing to be the most viable option as it overtops the least amount of capital, both financial and human. Cameron Auto Parts are stipendiary royalty fees as well as the costs of setting up the manufacturing and training without having to spend much money to get the UK plant running.2. I would say that McTaggart is a good choice for the company to become the licensee of the UK for Cameron. correspond to Exhibit 3, even though they had gross sales of 9 one thousand million from 1991, it states that this is because their sales took a plummet against a U.S product of superior quality (International Management, pg 255) It to a fault states that they have the capacity to increase production substantially. This means that given the right product, they are already capable of producing according to demand. Further, b ecause Sandy himself knows there is a huge (and growing) demand for the part, coupled with the current customers of Cameron, there is almost already a very large customer base and all it postulate is a facility that is very seriously interested in seemly exclusive agents for the UK market (International Management, pg 256) in order to supply that demand accordingly.McTaggart as well as has an excellent credit record, and having been in operation for almost 150 years, it is gull that they are in the business for the long run and would not attempt damaging situations and dishonored contracts.3. The two had come to a compromise of 2% in royalty fees. They came up with the rate of using integrative talks techniques. They both knew that they wanted the situation to work, and neither of them came in with an unrealistic start point or forceful attitude distributive techniques. Alex began the negotiation at 3% while Sandy pushed a few times for 1.5%. however though Sandy gave an of fer of 2% on the first million , he still kept close to his initial 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 legal royalty limit in the UK, the textbook (International Management, pg 99) does state that 3% is a stringent limit. This implies that governments consider this rate reasonable and not high enough to hurt the domestic company. That organism said, 2% is the right rate. An important piece of information to take origin of is the fact that even though their production skills were not as street smart as Camerons an issue that would be rectified once the set-up of the facility is completed McTaggart already has original cost saving ideas implemented in their current plant.This indicates an ingenuity that perhaps Camerons techniques could use. Because Alex specifically states that he would require a flow-back clause in their agreement, this is an added benefit to compromising that 1% since it is notwithstanding 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.