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Company: Can-Am Sports

Headquarters/Head Office:

Address: Can-Am Center 52

Bloor Street West,

Toronto, Ontario M5W 1A3

Telephone Number: (416) 555-8000

Fax Number: 053-3660

Type of organization:

a)

b) Sporting Goods Manufacturer

Main Product Lines:

Main Markets: US, Canada, South

Korea, Philippines

Main Subsidiaries:

Market Position:

Annual Revenue: $ 864 million

Company:

Headquarters/Head Office:

Address:

Telephone Number:

Fax Number:

Type of organization:

a)

b)

Main Product Lines:

Main Markets:

Main Subsidiaries:

Market Position:

Annual Revenue:

Θ Thomas Willhite arranges a meeting with Touchline Trading UK. Before the meeting, he contacts a friend from business school, Annique Demeyer. Mademoiselle Demeyer runs Associes Demeyer of Brussels, a market research organization. Willhite asks her to prepare an independent forecast of Can-Am’s sales in Europe for the next three years.

Read the following extract from Annique Demeyer’s report.

TABLE I: Sales of Can-Am products in Europe to date.

Year Sales ($US) Annual Increase Market Share (Europe)

UK Other

1 180 000 - 5% -

2 385 200 114% 9% -

3 701 064 82% 14% -

Current 4 1 030 564 47% 18% -

The European market is composed of a number of independent national markets. These markets have different purchasing patterns and distribution systems. Touchline is strong in the UK market. 85% of their sales, including sales of Can-Am’s products, are in the UK.

Our research indicates that interest in baseball and American football is growing fast in Europe. This is a direct result of coverage of these sports on satellite and cable TV. We understand that the European market for baseball and American football equipment is growing at an annual rate of 17%.

This growth is not just in the UK. Continental Europe represents over 60% of the total European market. Touchline does not appear to compete significantly outside the UK.

It is true that sales of Can-Am’s products in the UK have risen dramatically in the last four years. But this is partly because your major US competitors show little interest in the UK market. This may change as the market grows. Touchline may find it difficult to maintain its share of the market.

However, continental Europe is too important to ignore – as the following figures indicate.

TABLE II: Sales forecast for the UK, (assuming a market share of 18%).

Year Sales ($US) Annual Increase Market Share

Projected 5 1 174 563 14% 18%

6 1 362 493 16% 18%

7 1 580 491 16% 18%

TABLE III: Sales forecast including expansion to continental Europe, (assuming the market shares shown).

Year Sales ($US) Annual Increase Market Share (Europe)

UK Other Total

Projected 5 1 726 808 68% 18% 3% 7%

6 2 448 575 42% 18% 5% 8%

7 4 143 643 69% 18% 10% 12%

Θ Now listen to the recording which gives a summary of the extract.