Chapter 1 SBD Answers

Chapter 1 SBD Answers - Chapter 1: Small Business Dilemma...

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Chapter 1: Small Business Dilemma Developing a Multinational Sporting Goods Corporation Last month, Jim Logan completed his undergraduate degree in Finance and decided to pursue his dream of owning his own sporting goods business. Jim had worked in a sporting goods shop while going to college, and he noticed that many customers wanted to purchase a low-priced football. However, the sporting goods store where he worked, like many others, only sold top-of- the-line footballs. From his experience, he was aware that top-of-the-line footballs have a high mark-up and that a low-cost football could possibly penetrate the U.S. market. He also knew how to produce footballs. His goal was to create a firm that would produce low-priced footballs and sell them on a wholesale basis to various sporting goods stores in the United States. Unfortunately, many of the sporting goods stores began to sell low-priced footballs just before Jim was about to start his business. The firm that began to produce the low-cost footballs already provided numerous other products to sporting goods stores in the United States and therefore already established a business relationship with these stores. Jim did not believe that he could compete with this firm in the U.S. market. Rather than pursue a different business, Jim decided to implement his idea on a global basis. While football (as it is played in the U.S.) has not been a traditional sport in foreign countries, it has become more popular in some foreign countries in recent years. Furthermore, the expansion
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This note was uploaded on 02/14/2011 for the course FINANCE 640 taught by Professor Sen during the Fall '10 term at UMBC.

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Chapter 1 SBD Answers - Chapter 1: Small Business Dilemma...

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