Baxton Case Study

983 Words Aug 25th, 2012 4 Pages
Background and Problem Definition: Baxton Technology is a small to medium sized scissors type surface automotive hoists (used in servicing, repair and speciality shops) manufacturing company which is operating is USA as well as Canada. It competes in the specialty shop segment and, in particular, those shops that dealt with wheel alignment. The organization wants to exploit the various opportunities of entering Europe market or increasing its sales in USA
Market and Industry Analysis: Hoists are typically of two categories mainly 1) In ground 2) Surface. Approximately 49000 units are manufactured every year and the industry is worth $150 million (see exhibit 1) and has a very big potential to grow in the coming years. The industry has been
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re by sales = 60%
Therefore total industry value = $150 Million
Sales in $ of Baxton = $9708000
Therefore market share by sales = 6%
No of units of hoists sold in North America = 49000
No of units sold by Baxton = 1054
Therefore % share by volume = 2.1%
Exhibit 2:

|Srl No |Particulars |In USD | |
|1 |Sales in US |5824800 |60% of 9,708,000 |
|2 |Contribution |1630800 |60% of 2,718,000 |
|3 |Marketing costs for new office |318000 |60% of 530,000 |
|4 |Cost of renting office |80000 |Assuming costs are similar in Europe and |
| | | |America |
|5 |Total Costs incurred |400000 | |
|6 |B/E of sales((5*1)/2) |1428697 |25% of 5824800 |
|7 |Cost of Production of a unit |7931(8360000/1054) |8360000 = cost of

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