2. Overview of the situation
I) Harding Tool Corporation
II) Date & Location
III) Main characters
IV) Synopsis of exhibits
3. Harding Tool Corporation
American manufacturer of large and
small machine tools and
parts, gears, valves and bearings
Major supplier to industries and
companies worldwide
Situation
1982-1985: Decline of sales because of
financial crisis
4. Main characters
Lloyd WILCOX: Overseas sales manager of Harding
Jose CABRAL: President of Companhia Internacional de
Comercio
Julia PETERS: Commodities Broker at Overseas
Development Corporation
Other executives:
F.GARRET, M.ROSS, C.CARMICHAEL, P.LAMOREUX
12. Statement of problem
Brazil is in a financial crisis and lacks of foreign exchange:
countertrade is a solution to maintain business with the
Brazilian company.
Given the risks, should Harding Tool corporation accept
the exchange of gears for Brazilian shoes ?
13. Solution 1: The status quo or refusing
the offer
No risk
Time saving: no need
to concentrate on a new
business
Loss of client
Decline of sales
Decline of the turnover
Competitors can
accept and steal us the
market
14. Solution 2: Do a trial by exchanging
for $100 000
Limited risk
Maintaining of
relations with the
Brazilians
More flexibility in the
final decision
Potential extra profit
when selling the shoes
Lack of time
Still a risk of putting
up with the shoes and
loosing money
Brazilians can see it
as a lack of trust
15. Solution 3: Negotiate a better deal obtaining 8%
more shoes for the same quantity of gears
Direct gain of money:
what Harding receives is
worth more than what is
sells
Compensation of the
the broker’s commission
Maintaining of the
Brazilian market
Risky operation: more
shoes are to sell
Potential need to find
several buyers: the
broker might not buy the
shoes without clients
Time investment
16. Solution 4: Ask for another product (commodities)
that would be related to Harding’s industry
Limited risk: more chance
to sell the product
Maintaining of the
Brazilian market
Possible diversification of
the offer which can lead to
new clients or…
Possible reduction of cost
using the commodities to
produce
No need for broker
It might not be possible or
accepted by the Brazilian
company
17. Solution 5: Accept the offer after finding a
buyer for the shoes
Limited risk: more
chance to sell the
product
Maintaining of the
Brazilian market
Potential extra profit
Increase of cost:
broker’s commission
The client may
change their mind
18. What do you think about the
use of countertrade with
developing countries ?
