This presentation is about the international trade research for the BIRKS company, identifying the current market potential and increasing their sales. However, some of the data are not accurate because of the unavailability of the company's information. This presentation is just a part of school assignment.

1. INTERNATIONAL TRADE RESEARCH

2. Table of Content
1. Executive Summary
2. Objective
I. Business opportunities
II. Research Objectives
III. Product we are planning to export
IV. Target market
3. Key Findings
I. Brief about BIRKS
II. Current state for export readiness
III. GAP analysis
4. Method
I. Research method
II. Two markets and research resource used
III. Comparison of two markets
5. Recommendations
I. Target market – USA
II. Reasons for choosing USA
6. Critical success factor
I. Company’s tolerance for risk
II. Top three risks
7. Conclusion and Final Decision

3. Executive Summary
• By considering the companies sales report, future demand, sales forecast and other necessary analysis,
we’ve decided to step into foreign market.

4. OBJECTIVE

5. The opportunity we are pursuing is to increase sale of platinum jewellery by meeting
the increasing global demand by selling it into the international market.
Business opportunities

6. Research objectives
• To know global demand for platinum
• To know competitors and their pricing strategy
• To know target customers and their behaviour

7. Diamond rings made of platinum

8. Men's
&
Women's
• Fashion
• Weddings
• Collections
• Anniversary gifts
• Festive blessings

9. KEY FINDINGS

10. Brief about BIRKS
• The company was found by Henry Birks on March 1, 1879. Birks Group (Formerly BIRKS & MAYORS) is a
designer, manufacturer and retailer of Jewellery, timepieces, silverware and gifts.
• BIRKS’s headquarter is in Montreal, Quebec.
• Jean-Chirstophe Bedos is the current CEO of the company.
• BIRKS’s mission is to build a prestigious brand that always delight to people.
• BIRKS’s objective is to develop and grow the BIRKS product and retail brands.
• BIRKS has 28 stores across Canada.

11. Current state of export readiness
A. Human Resources
• Company has more than 400 employees in Canada.
• Birks popularity built on quality, exclusivity, unique design and excellence in service provided by their
staff members which indicates great relationships with customers.
• Birks have staff members have capability to develop, organize and manage a high-volume retail store.
• To customized consumer services, BIRKS always look for candidates who can communicate with Chinese,
Mandarin or Cantonese languages.

12. B. Financial Resources
 According to mid year 2018 Financial Report, the company is already making net income loss of
$1,900,000. It is expected that company is going to make loss nearly of $4.5 million in it fiscal year 2018.
-50
0
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017
Fiscal year ends on March. Sales in Millions
Net Sales Gross Profit Net Profit
1.05
0.89
1.15
1.23
0.43
1.66
1.23
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2012 2013 2014 2015 2016 2017 2018
Price Per share

13. C. Production capacity
• Birks is well-known for its quality of jewelry. It has better working environment, skilled staff, efficient and
unique designers and they always update with latest trends and technology for manufacturing. Thus, Birks
has ability to accommodate large orders too.
• Mainly Birks has associated with Stornoway diamond corporation and Renard diamond mine, these are the
main diamond suppliers of Birks and it is Canada’s sixth producing diamond mine so as having strong and
reliable suppliers, they can expand their market easily.
• As the Birks designs and produce jewelry itself, so it is easier for them to design and modify jewelry as per
the demand and trends of the market.
D. Logistics
• The main products of BIRKS are platinum jewelry and diamonds, so they transport most of their products via
truck transport and air transport.
• They handle management of the entire logistics process including safe transport to the dealers. They always
secure their transport with insurance.
• The BIRKS also export their experienced staff and labor for providing same services everywhere.

14. Strategic objective Current standing Deficiency Action plan
Global expansion of
Birks product brand
Operated only in
Canada and USA
No global
expansion
Increase in no of
stores in different
countries by
adopting new
market strategies
Introduction of
non-luxury product
Mainly sells luxury
products
High price To launch a new
range of customised
products
GAP Analysis

15. METHOD

16. Secondary Research
• BIRKS official website
• Company’s report
• Review data
• Public magazines
• News
• Articles

17. USA JAPAN
Central Intelligence Agency
Japan customs
USITC
Federal Trade Commission
Tiffany & Co.’s website
Market studied and research sources

18. Market Comparison
Country USA Japan
Market Size and
potential
USD 3.3 billion (15% of
platinum is imported to USA)
USD 2.8 billion (13.1% of
platinum is imported to Japan)
Market
accessibility
No import tax on platinum 6.2% Import tax on platinum
Political and legal
stability
Average value = 0.49 points
Minimum of 0.23 points
Maximum of 1.08 points
Average value = 1.04 points
Minimum of 0.88 points
Maximum of 1.25 points
Preferred
purchased method
Online purchases Store purchases – cash payment
Note: Political stability index (-2.5 weak; 2.5 strong). During 1996 to 2016

19. RECOMMENDATIONS

20. Target Market - USA
USA accounts for 1/3 of the global jewellery market.

21. 28.99
25.7 25.91
29.05
29.86
30.45
31.21 31.46 31.03
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2012 2013 2014 2015 2016
Jewelry store sales in U.S. in billion USD.
• Increasing demand
 The demand for jewelry in USA is increasing by 5 to 6% each year. It is expected that in 2020 the jewellery sales
will be reach by USD 280 billion.
Reason for choosing USA as target market

22. • Selling Platform
Majority of the people in USA like to buy small jewelleries like engagement rings through online. In fiscal year 2013,
the jewelleries sales were approx. 80 billion U.S. dollars. And more than half of sales were from non-store retail.
• Low Price
BIRKS is in good position to sell its platinum engagement rings into USA market as BIRKS engagement rings are bit
cheaper than other competitors in American market.
• Import duty
There is no import duty on import of raw material or semi-manufactured platinum, however if worked further than
semi-manufactured, 10% of import tax is levied.

24. CRITICAL SUCCESS FACTORS

25. Company’s tolerance for risk
LOW PRICE

26. Top three possible risk
1. Interest Rate Risk
BIRKS is already under debt, their borrowing under the senior secured credit facility and the term loans from
Investissement Quebec bear interest at floating rates. Net income will be affected by changes in interest rates.
2. Commodity Risk
Exposure to fluctuations in commodity prices, especially prices of diamonds and platinum. BIRKS monitor
physical delivery contracts to hinder their exposure to risk related to change in platinum price. If the platinum
price decreases below those specified levels mentioned in their various hedging agreements, they would lose
the value of a decline in price of platinum which will affect the cost of sales.
3. Currency Risk
Substantial portion of BIRKS’s sales are earned in Canadian dollars. Being operations located in Canada,
non-Canadian currency transactions and assets and liabilities are subject to market risk. Vice versa for
the operations in collaboration with luxurious watch companies located in U.S.

27. Ways to mitigate risk
• Fixed interest rate
Instead of taking loans at floating interest rates, company should find a creditor who can provide loans at
fixed interest rates.
• FX forward contract
Company can sign forward contract in order to reduce currency risk. It is an organization’s commitment to
exchange predetermined amounts of two different currencies at a future date.

28. Conclusion and Final Decision
• Company strength is low price jewelry than its biggest competitor “Tiffany & CO.”
• BIRKS should enter the U.S. market, initially selling the platinum Diamond rings online instead of relying on
store sales, which will increase company’s expenses, as company is already under debt.