HARDING TOOL CORPORATIONLARGE AND SMALL MACHINES TOOLS, PARTS AND GEARS

MANUFACTURER

Nicolas GriereAlexandre MassiotHugo Morin

MAIN CHARACTERS

Mr Lloyd WilcoxHarding Tool

Mr Jose CabralCIC

Ms Julia PetersOverseas

WHO ARE WE?

- AN AMERICAN MANUFACTURER

- A MAJOR TOOLS SUPPLIER

- BASED IN CLEVELAND OHIO

WHAT DO WE SELL?

• TOOLS • MACHINES

COMPANHIA INTERNACIONAL DE COMERCIO / CIC

- A TRADE COMPANY

- BASED IN RIO DE JANEIRO

WHAT IS THE SUBJECT OF TODAY’S MEETING?

1978 1979 1980 1981 1982 1983 1984 1985 1986 ?0

100

200

300

400

500

600

700

Part of exhibit 3

1978 1979 1980 1981 1982 1983 1984 1985 1986 ?0

1000

2000

3000

4000

5000

6000

7000

Dollar Exchange Rate

Sales in Brazil

THE DEAL

HARDING CORPORATION• 400 000$ IN ASSORTED GEARS

COMPANHIA INTERNACIONAL

• 400 000$ IN BRAZILIAN SHOES

DO WE HAVE TO CONSIDER THIS OFFER?

TOOLS IN EXCHANGE OF SHOES

• 1ST APPROCH

AN UNUSUAL KIND OF CONTRACT

WHAT SHOULD WE DO WITH SHOES ?

• 2ND APPROCH

A HUGE CONTRACT

GREAT OPPORTUNITY TO MAKE PROFIT

“

”

AT FIRST YOUR OFFER SEEMED COMPLETELY OUT OF THE QUESTION

QUOTATION OF MR WILCOX FROM EXHIBIT 1

“

”

WE DECIDED WE MIGHT AS WELL INVESTIGATE IT

QUOTATION OF MR WILCOX FROM EXHIBIT 1

TIMELINE

Contract offer

Dialog between Mr

Wilcox and Mr Cabral

Communication between

Harding and Overseas

Meeting of Haring’s

executives

A HUGE CONTRACT

1978 1979 1980 1981 1982 1983 1984 1985

Argentina -- -- 126 114 83 197 112 133

Brazil 264 327 431 524 640 342 206 183

Colombia 324 531 589 320 512 434 486 472

Venezuela 434 576 484 372 464 207 181 192

Mexico 313 236 174 189 76 62 41 77

Chile -- -- -- -- -- 122 221 204

Other 120 170 330 410 474 314 306 284

Total 1 454

1 840

2 134

1 929

2 249

1 678

1 553

1 545

% of total gross sales

7,8 6,5 8,9 10,7 10,2 9,8 8,2 6,1

in thousands of US dollar

Exhibit 3

SHOES

MEN’S WOMEN’SName Price Number

Pumps leather 10,0 $ 8 000

Pumps 8,00 $ 12 000

Flats 7,00 $ 4 000

Sandals 5,00 $ 7 670

Name Price Number

Oxfords 13,5 $ 4 500

Loafers 12,0 $ 6 200

Casual 9,00 $ 2 500

Sizes Men’s : 7 - 12Women’s : 5 - 10 Total : 400 000

$

Exhibit 1

OVERSEAS DEVELOPMENT CORPORATION

- A REFUNDER COMPANY

- BASED IN NEW YORK

- 2 % COMMISSION ON SALES

Exhibit 2

OUR EXPECTATION

initial shoes prices 400 000 $

our commission about 5 – 7 % 421 000 – 428 000 $

2 % commission from Overseas Corporation 412 580 – 419 440 $

COMMUNICATION / MANAGEMENT

STRENGTHS

• GOOD COMMUNICATION AMONG HARDING EXECUTIVES

• AGRREEMENT TO INVESTIGTATE THE MATTER FURTHER

WEAKNESSES

• DIVERGENGES AMONG EXECUTIVES

• NEED TO MANAGE SUBCONTRACTOR

Exhibit 4

MARKETING

STRENGTHS

• OPPORTUNITY TO SELL NEW PRODUCTS

• NO PRODUCTION OF SHOES

WEAKNESSES

• NEED TO COVER COMMISSIONS

• ADDITIONAL COSTS

DISTRIBUTION

STRENGTHS

• LATIN AMERICA IMPORTANT MARKET

WEAKNESSES

• DOLLAR EXCHANGE RATE IMPACTS NEGATIVELY

OPTION 1REFUSE THE CONTRACT

ADVANTAGES• NO RISK TAKEN

• FOCUSS ON OUR MAIN ACTIVITY

DISADVANTAGES• LESS PROFITS

• MAY LOOSE THE BRAZILIAN MARKET

OPTION 2ACCEPT THE CONTRACT

ADVANTAGES• COULD MAKE EASY PROFITS

• DISCOVER A NEW MARKET

DISADVANTAGES• MAY LOOSE MONEY IF UNSUCCESSFUL

• NOT OUR PRIMARY ACTIVITY

OPTION 3FIND ANOTHER REFUNDER

ADVANTAGES• A LOWER COMMISSION

• A BIGGER MARGIN

DISADVANTAGES• TAKES TIME

• COMPANHIA INTERNACIONAL MIGHT NOT WAIT

OPTION 4ACCEPT THE CONTRACT WITH NEGOCIATIONS

ADVANTAGES• COULD MAKE EASY PROFITS

• DISCOVER A NEW MARKET

DISADVANTAGES• MAY LOOSE MONEYMONEY IF

UNSUCCESSFUL

• MAKE LESS PROFITS

OPTION 5CLOSE THE BRAZILIAN MARKET

ADVANTAGES• TAKE NO RISKS

• AVOID FUTUR PROBLEMS

DISADVANTAGES• NO MORE PROFITS FROM BRAZIL

• MAKES THE COMPANY REGRESS

SUMMARY OF ALL OPTIONS

STATUS QUO

• REFUSE THE CONTRACT

• ACCEPT THE CONTRACT

• FIND ANOTHER REFUNDER

• ACCEPT THE CONTRACT WITH NEGOCIATION

RADICAL• CLOSE THE

BRAZILIAN MARKET