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An Analysis of the Camar Automotive Hoist Business

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An Analysis Of The Camar Automotive Hoist Business

Camar Automotive Hoist (CAH) is still a young and small company with a great potential, which has established its reputation as "Cadillac" on an excellent product in the Canadian market. With plenty of room for growth in the US market, they should keep their offensive strategic market plan, focusing only in this market, until they can gain enough market share. By establishing a sales office in New York and working more closely with their distributors and wholesalers they could gain more market share.

CAH is a relatively young Canadian business, formed in the early 90's by Mark Camar. He developed the Camar Scissor Lift which provided the following features:

* Easy access for the mechanics to work in the working vehicle.

* Safety locking mechanism.

* Easy installation.

* Low maintenance required.

After a couple of years they became the number one manufacturer of Automotive Hoists in Canada and later decided that they would penetrate the US market. For this they utilized different methods for selling their product: a company sales force, a Canadian distributor and a US wholesaler.

Their sales force, of four salesmen, accounted for about 25% of total sales and mainly focus to service large direct accounts. The remaining 75% came from the Canadian distributor and the American wholesaler. The US wholesaler also offered lift that competed with the Camar lift. In fact, the Camar lift only accounted a 20% of the wholesaler total sales.

Camar has been growing well in the past years, both in units sold and in revenue. At the same time the company has been able to control cost which has raised the operating profit. The contribution margin has been between 25.6% and 28% over the past three years. In the year 2000 they began to explore new alternative markets, like Europe.

Problem statement:

To keep the company in the fast growth track, should Camar enter the European market or should Camar concentrate on increasing sales in the United States?



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