Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Solution

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Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Study Analysis

On the basis of above internal and external analysis of the business along with the examination of numerous options, the business is recommended to think about alternative 3. As alternative 3 would permit the company to expand in worldwide markets without any decrease in its local incomes and any deterioration of its market position. The business might pursue alternative 1 which would make it possible for the company to focus on possible international markets rather than the regional markets but as the business is highly reliant on the local markets with 90% of its stores in the US, there fore pursuing option 1 would result in the substantial decrease in company's profits.

Aletrnative-1: Expanding International Brick and Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Analysis Stores

Expansion towards worldwide markets through opening new shops in other Europe and Asian countries with closing domestic stores is although a good option for increasing the global presence of the company. The closing of domestic shops could highly impact the revenues of the firm as above 90% of its shops are located locally and closing those shops would eventually reduce the incomes of the company. Additionally, the company has a long term market position in US which can not be created quickly in the new markets. The choice would help the company to broaden in worldwide markets in addition to the removal of issues raised in its regional markets associated with its diversity. The pros and Cons for Alternative 1 are listed below;

Pros:

• Exploration of brand-new international markets.
• Increase in earnings from international markets.
• Removal of concerns related to variety.
• Revenue diversity.
• Action towards being a strong global brand name.

Cons:

• Loss of extensive profits from the regional markets.
• Increase in competitors.
• Distinctions in cultures could caused a failure of the brand name specifically in Asian nations.
• Low revenues at initial levels.
• Boost in marketing expenses to gain market share.

Alternative-2: Introduction of Click and Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Solution Stores

Alternative 2 consists of the introduction of online market places through producing a proper company's site. With the increased patterns towards online shopping, the online stores like Amazon, Alibaba and so on could posture a severe danger to the marketplace share of business. The rivals are shifting towards click and Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Solution stores with Space presenting Piperline. This shift towards online markets might lower the revenues for company. In this situation the company could consider presenting Click and Recommendations of Sumitomo Corporation Of Japan: The Commodity Derivatives Fiasco Case Solution stores. These stores with a low requirement of funds to settle would allow the company to reach global markets, without ending its domestic stores. The benefits and drawbacks of option 2 are given as follows;

Pros:

• Low financial investment
• Lowering competition risk
• Access to the world markets
• Enlarging customer base
• Easy to handle
• Large Revenues
• Low Operating Expense
• Easy new market entryway

Cons:

• Risk to the market position
• Removal of brand name Uniqueness
• Elimination of the terrific store experience.
• Threat of decline in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another choice that the company might think about, is to broaden towards the global markets without closing its domestic stores that contributes to the huge part of incomes of the company. The benefits and drawbacks connected to Alternative 3 are given below;

Pros:

• Reducing competition risk
• Access to the world markets
• Increasing the size of consumer base
• Big Incomes
• Expedition of new global markets.
• Boost in income from international markets.
• Revenue diversity.
• Step towards being a strong global brand name.

Cons:

• Continuation of problems associated with diversity.
• Differences in cultures might resulted in a failure of the brand name particularly in Asian nations.
• Low revenues at preliminary levels.
• Increase in marketing expenses to get market share.



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