Lada de Brasil Case

1253 WordsApr 21, 20136 Pages
Lado do Brazil is struggling to remain a profitable importer of cars in the Brazilian market. To remain profitable LDB needs to increase its sales and maintain its efficient cost structure. The recession, regulatory uncertainty, and increased competition are all factors that are reducing and threatening the sales and profitability of the company. In order to counter these threats and increase sales, LDB needs a more aggressive sales strategy, needs to continue to leverage its existing relationships with dealers, local parts manufacturers, and the local government, and should solely focus on being a low cost provider. This should allow LDB to maintain profitability throughout the recession, and continue to be the import leader in a growing…show more content…
The volume of the negotiated contracts would also allow for substantial discounts of 25% or more. However, in a recession, institutions are unlikely to engage in financial commitments, even though our car is the lowest priced. This option may be feasible under more economically prosperous times when firms are actively expanding. CONCLUSION To increase sales and overall profitability in the current market environment in Brazil, LDB should refine its product mix to better fit the domestic demand. Additionally, LDB should further penetrate the market by focusing on building long-term relations with dealers and expanding to sell directly to consumers without access to dealers. While focusing on increasing market share, LDB should diversify its supply channels to mitigate the risk of VAZ being unable to supply cars at a competitive price. While mitigating the risks in the short-term, these strategies position LDB for long-term success. 1. Figure 3 Figure 3 LDB ’s Business Process LDB ’s Business Process 2 . 2 . Daily . Daily . 2 . 2 . 1 . 1 . 4 . 4 . 3 . 3 . 1 . 1 . Direct Sales 1. Consumers contact the dealer and purchase the car in full at a 20% discount. 2. LDB sends the car to the consumer directly. 3. LDB exchanges Cr into USD daily to avoid currency risk Direct

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