Our corporation, XXX Inc. starts out at the equal standing with eight other corporations. Internal assets-wise, we are profitable although our profitability is modest at little over 3%. have 11.1% market share which is reasonably good as a start – it certainly gives us an advantage over the situation where we would just enter a new market with no market share at all.

Another strength is that we are as a company well diversified and we can rely on three distinctive divisions – hardware, software and systems. We will monitor the performance of these divisions and match them with the best markets with the greatest demand and possibly locate the manufacturing of the hardware in one of the low-cost markets. For now, the advantage is that all the divisions are established domestically, and this means no additional challenges associated with other markets we do not know well. We have full control over our products and services, and we do not need to expect any undesirable surprises associated with operating in the industry or market we do not know much about. Therefore, our “stability” is a great strength.

Finally, we are cash positive and we have access to a few additional sources of funding. Although the interest rates may be quite high – especially when it comes to the bank loans, we can expect to fund our growth through a careful management of new debt (i.e. stock issue) while still paying attention to our debt/equity ratio to ensure that our investors are not concerned about our debt situation.

Our final strength lies in qualified management. Our corporation will operate under the leadership of Aziz, our CEO, who has the most management experience.


The first weakness lies in our inability to solely rely on the revenues in the domestic market – this is where the competition is the strongest and everyone else operates in. For this reason, our (risky) strategy will have to be to expand in the international markets, at the very least in the medium term. This should ensure our long-term survival and prevent the shrinking of our overall market share.

The second weakness lies in our very limited capacity to manufacture. This should be one of our early priorities to expand, as it makes no sense to try to enter international market and at the same time being unable to cover the local demand as we have to split our already very limited production capacity between the domestic and international market.


The first opportunity for us would be venture acquisition. Ventures are already established businesses that not only are the sources of additional revenues but also they give us the easier access to any new market we decide to expand to. For this reason, we should prioritize the venture acquisition, as the costs are affordable and this step will bring in additional ROI even before we can see any returns from international market expansion.

Secondly, as it was already mentioned the international expansion (or more expansions) will be important for our success, although we cannot rely on the short-term returns if we utilize this strategy. At the same time, we need to carefully manage our cash flows to ensure we will not end up with extreme interest rates that will be wiping our profitability every single period. Although we should not be running our business solely through the equity funding, and debt funding is the opportunity to get ahead of the competitors early, we should ensure that any revenues we forecast are actually reliable and achievable to prevent us from suffering from unreasonable debt burden we are unable to repay.


Our finance data are public, and we have reporting obligations. Any competitor can purchase a report to see what exactly our strategy, pricing, market share and other factors are. This makes it very difficult to compete in the industry as any competitor can easily copy the strategy we have developed if we prove to be successful, and changes can be made almost immediately. It is expected that we will not be changing our pricing and marketing strategy each semester.

The second threat that is greatly associated with operations in the international market lies in the instability of the revenues, any unpredictable market situation and importantly flotation in the currency exchange risk that may increase or decrease. Each international market we expand to carries a various degree of risk, some lower and some higher, and based on the preliminary analysis there is no “obvious choice” foreign market, because all the better-developed markets will immediately attract our competitors as well (basically mirroring the situation in the Domestica market) and we end up being in a low-growth market and potentially locked in a price war with all or most of our competitors. Even though international expansion appears as an opportunity first, and we definitely need to expand to increase our market share, our strategy should be not to enter the market where everyone else may likely be going.

Evaluation of XXX’s Competitive Position

All in all, we have the same starting line as every other competitor in the industry, and this position itself is already an advantage. In such conditions, this becomes a game where many moves are possible, but also it will be a game where individual corporations will sometimes need to focus on marginal improvement of the gross and net revenues, individual cost items (i.e. allocation of the funds to the marketing, HR, and operations, and only after we confirm that we, in fact, have a viable and sustainable business model, we can consider the international expansion options.

Based on the available data in the case study guide and the simulation we have already seen, we can easily gauge that there are more and less risky paths ahead, and it will be interesting to watch the selection of each competitor. We see the opportunity for our growth in short-term and long-term debt funding, subsequent (even initial) venture acquisition, and finally in expansion to one or possibly two international market, as our capacity allows. We should not be stretching our resources too thin, as we already know that we cannot cover the demand across 3-4 markets only with our current capacity, although additional diversification would have been good for the business. The final challenge for us will be to manage the individual divisions and pay attention to their nuances, such as possibly focus on only one item and acquire/sell capacity to the competitors.