MABE case report

1824 Words Nov 19th, 2014 8 Pages
Problem Identification
MABE is Mexican Appliance Company founded in year 1946 by Mabardi and Berrondo. After selling one half of its shares to an MNC the firm evolved drastically. Industrialist gained reputation and associations for their organization helped them to rule the Latin American showcases by the act of joint ventures. Preceding to the recession in 2008, they joint venture with a Spanish organization planning to enter the Russian market has failed. The top management of MABE was concerned about the future situation of the company.

Key Issue:
Spanish partner and MABE should continue spending money on the Russian joint venture believing that situation in Russia would we stable in the future and make profits or invest into
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Therefore, if a firm are able to produce more and more of their products, they also have the opportunity to reduce their costs. MABE was the largest appliance manufacturer in Latin America which shows that they were able to produce more and more of the products for the demand of U.S. market. Proving that they possessed the economies of scale in attaining the main key success factors.
Industry life cycle
In the case we seen that MABE are able to produce locally and export internationally which implies that they are in the mature stage of production cycle. The MABE Company were growing faster since the implementation of the NAFTA.
Porter’s 5 Forces
Rivalry (High): The competition involved in the production of household appliances is high, although MABE has the access to penetrate through the local and international market such as the export of appliances to Caribbean, North America, Central America and Latin America. Innovation and cost-effectiveness are one of the major key aspects to be considered when it comes to household appliances. Therefore, MABE needs a lot of market strategies in the competitive market in order to lead and penetrate the market trends among their competitors.
Threat of New Entrants (Medium): The threat of new entrants is not really high, appliances manufacturing industry is easy

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