DR. YANGA’S COLLEGES, INC.

College of Business Administration

Play it Safe at Home, or Take Risk a Abroad?

Case Analysis

In partial fulfillment of the requirements in

MKM 204E – SERVICES MARKETING

ALBAY, ROCHELLE ANN G.

ARIZ, ANGELO S.

COMPLOMA, EDIELYN G.

DECENA, KENNETH JOHN L.

DOMINGO, CARL JOSEF C.

NICOLAS, ANJELLAH FEI S.

PALANCA, JEMIMAH FAITH O.

22 September 2017
FACTS OF THE CASE
• Stan Windham, the CEO of the lease-to-own chain visited the branch, he was eager to
see how the 1000th location was performing.

• Aubrey Merrin is the store manager of the newest Coe’s store in South Tucson.

• The store is already doing great for less than a month and they have over 100 customers
already.

• Aubrey has experience as a manager for 10 years. He’s happy to be working on a

growing company. He fostered immediate trust with customers were much more
successful when it came to collecting payments.

• Stan started as an assistant manager in 1984, the same year Coe’s went public. Stan
worked harder and he proved his worth. Coe’s now took in over $2 billion a year in
revenues.

• Unlike many of its competitors, Coe’s had emphasized ownership. They offered a
monthly payment schedule and a shorter contract period.

• Aubrey suggested to Stan to open Coe’s store at Mexico. Many of the store’s customers
came originally from Mexico.

• Stan already started conversation at the headquarters, they are considering Mexico and
Europe.

• Stan had led a successful expansion into Canada and had over 100 stores there now.

• A venture into Puerto Rico had failed miserably after 12 months. Many customers had
skipped payments and walked away with the products and the store manager hadn’t
been able to handle the massive amount of collections.

• Stan didn’t want to make the same mistake twice.

• The woman behind the counter named Carmen also suggested to Stan to open their
store at Mexico.

• Carl Amirault, the CFO, always fostered debate with Stan, he said that “why would we
add the complication and risk of international expansion when it’s not necessary?”

• Based on their team analysis, there are many people who don’t use credit to pay.
TOWS ANALYSIS
Threats

• New entry of competitors

There’s a possibility that new competitors will enter the market and imitate their
strategy.

 New Culture

Coe will need to make an adjustment when it comes to the culture of Mexico. Because
they are introducing a new means of payment to the people of Mexico which is
completely foreign to them.

Opportunities

• Job opportunities

It can decrease the unemployment rate in Mexico.

• Gain market share

It can boost their profit that can lead to higher net income.

Strengths

• Brand equity

They already built a customer share, those customers recommend the company to
others.

• Skilled personnel

They already have a skilled personnel that can help their business to grow and can
communicate with customers.

• Effective positioning

By just hearing their positioning/tagline, Coe’s can easily recognize by their customers.
Weaknesses

• Failed venture history

They are afraid to take risk because of what happen in Puerto Rico that they need to
overcome.

• Different perception inside the company

Due to their different perceptions they find it hard to make decisions as whole.

OBJECTIVES:
• To find suitable location for Coe’s business expansion.

• To determine whether the company is ready to expand overseas or locally.

PROBLEM:
Should Stan expand his business, if expansion in Mexico or stay local, or introduce his expansion
through different platform?

STAKEHOLDERS

STAKEHOLDER GROUP EFFECT

Stand Windham Exposure or Closure of business.
Can be an additional revenue generator
Government through income tax return and other
business-related fees.
Branches of Coe’s Income avenue opportunity.

Society New way of payment activity.

Growth opportunities can give higher
Investor
capital gain.
ALTERNATIVE COURSES OF ACTION
1. Market development in Mexico.

After doing researches and studies about the culture of Mexico, Coe’s might have
greater chance to be successful in expanding at the said location. Considering also the cost to
build in Mexico is cheaper compared to other potential countries. It has large population which
means larger market that may avail their products, the competition is low since it seems like
there’s no other firm that offers the same payment system.

2. Market penetration in South Tucson.

Stan can follow Carl’s suggestion to open stores beside Walmart. Other customers were
looking for substitute or alternative options since they can’t afford what does Walmart offers,
Coe’s can be the one who will satisfy their needs, wants and expectations.

3. Entering E-Commerce

COE’s can put up their own website containing their own available products that can be
purchased globally. More consumers are taking online shopping for products that can normally
be bought in malls and boutiques. This is due to the convenience of having a product delivered
to your doorstep rather than bought in person.

EFFECTS ON STAKEHOLDERS
ACA1: Market Development in Mexico.

STAKEHOLDER GROUP EFFECT

His company will be introduced to other
Stan Windham country, the expectations of the company
going international will be meet.
They could benefit through collecting taxes
Government and other business related fees. (e.g. 30%
capital tax rate)
 They will gain high market share, since even
Branches of Coe’s before they open a store, the company is
already in demand.

Another payment system will be introduced

Society but it will be easy for them to cope with since
most of the people don’t have credit system.

They will gain more capital gain since there

Investors
will be high growth opportunities.

ACA2: Market Penetration in South Tucson.

STAKEHOLDER GROUP EFFECT

He will be able to focus more in their stores

Stan Windham
without adjusting to new environment.

Could benefit through collecting taxes and

Government other business related fees. (e.g. 34 to 35%
federal corporate income tax rate)

Higher market share will be gained since it will

Branches of Coe’s
attract new prospects from their competitors.

They will have another option since not

Society
everyone can afford Walmart’s offerings.

They will gain more capital gain since there

Investors
will be high growth opportunities.

ACA3: Entering E-commerce

STAKEHOLDER GROUP EFFECT

His company will be known easily in local and
Stan Windham international without branching out.
 Could benefit through collecting taxes and
other business related fees. (e.g. 34 to 35%
Government
federal corporate income tax rate) This will
also help to reduce the unemployment rate.

There will be negative effect to their other

Branches of Coe’s branches because customers will prefer to buy
online than going to the service site.

They will have another option since not

Society everyone can afford Walmart’s offerings.

They will gain more capital gain since there

Investors will be high growth opportunities.

EVALUATION

RATIONALE – Integrating the

DEFINITION
FRAMEWORK and WEIGHT Cage Framework

Cultural distance has to do

Cultural Distance (.25)
Which option would be suited
with the possible differences
to the payment system of the
existing in relation to the way
customer’s buying habit
individuals from different
based on their culture?
countries observe certain
values and behavior.

Which option would be the

Administrative distance best for the company to open
Administrative Distance (.15)
reflects the historical and stores without disobeying the
present political and legal law of the country?
 associations between trading
partners.

In geographic distance as Which option can process

absolute, in terms of the
Geographic Distance (.30)
minds or kilometers that
separate firms from another
market or suppliers.
faster based on their
accessibility and its
convenience?

Economic distance captures

fundamental differences Which option would help the
relating to income, the business to have an effect to
Economic Distance (.30)
distribution of wealth, and the the economic growth of the
relative purchasing power of country?
segments of a geographic
market .

THE BETTER ALTERNATIVE

ACA1: Market Development in Mexico

FRAMEWORK and WEIGHT RATIONALE

The lease-to-own system payment suit in

Cultural Distance (.25)
Mexico because people in Mexico do not have
yet this kind of system.

Administrative Distance (.15) This country do not have any hindrance when
it comes to opening a business.

Geographic Distance (.30) It hindrance some far-flung customers to

access the store for the store is very limited.

Economic Distance (.30)
ACA2: Market Penetration in South Tucson.
FRAMEWORK and WEIGHT
Cultural Distance (.25)
Administrative Distance (.15)
Geographic Distance (.30)
Economic Distance (.30)
ACA3: Entering E-commerce
FRAMEWORK and WEIGHT
Cultural Distance (.25)
Administrative Distance (.15)
It can greatly affect the economic growth of
the country for the lease-to-own payment
system is first one to have in the country.
New opening of stores will also give
opportunities to new employees.
RATIONALE
They can pay either by cash or by credit.
This country do not have any hindrance when
it comes to opening a business.
The accessibility and the convenience of the
store is in favor of the people in South Tucson.
The company has many competitors and it
won’t affect or notice the economic growth.
RATIONALE
Means of payment will be card.
 This country do not have any hindrance when
it comes to opening a business.

Geographic Distance (.30) Coe’s will be easily accessible since customers

can avail thru online.

Economic Distance (.30) It has great impact in the economy because it

will lessen the transportation therefore less
traffic. It will not open job opportunities just
like when opening a shop to other countries.

THE RESULT

ACA1 ACA2 ACA3

Decision Criteria Wt. Score ** WS* Score ** WS* Score ** WS*

Cultural
0.25 50% 12.5 50% 12.5 40% 10
Distance
Administrative
0.15 25% 3.75 25% 3.75 25% 3.75
Distance
Geographic
0.30 100% 30 80% 24 80% 24
Distance
Economic
0.30 100% 30 75% 22.5 80% 24
Distance
Total 1.00 76.25 62.75 61.75

Good for stakeholders: 100%; For most: 75%; For half: 50%; For few: 25%; For no one: 0%
The Result
By the use of the weighted score that was arrived at by the group, it was ACA 1 that weighs
more in terms of over-all benefit to all approaches. It states that taking risk can benefit Coe’s in
Mexico despite of their failed venture in Puerto Rico.

IMPLEMENTATION PLAN

STEP TIME FRAME RESOURCES NEEDED

Step 1: Assess One Month  Manpower

Coe’s should have a model-  Financial budget
based decision making to  Technology Forces
figure out how the  Time
marketplace works.

Step 2: Government Depends on the process of  Legal papers of their

Regulation the legal document in Mexico business
Requirements for licenses and  Time
permits may raise the
investment needed to enter a
market.

Step 3: Design Process Depends on how long the  Financial Budget

Generic step-by-step guide for process of finalizing the  Manpower
construction. design process.  Time
• Interview Architects
and Engineer
• Find builders and subs
(ideally, you want to
have identified a
builder, plumber,
mechanical, electrical
subcontractor)
• Architect will create a
blueprint
• Have meeting- talk
through design goals
• Finalize the contract
Step 4: Construction Process Depends on how long the  Equipment and
The completion stage and it process of building up their materials needed for
readies the building for store. constructing their
occupancy. branch
• Break Ground  Time
• Excavation  Manpower
• Foundation  Financial Budget (in
• Utilities case of there will be
• Framing improvement that
• Roofing needs money)
• Drywall
• Siding
• Flooring
• Tiling
Step 5: Moving In After complying to all  Financial Budget
After building the shop, Coe’s requirements that are needed  Manpower
new branch is Ready-to- and after constructing the  Time
Operate. shop.

Step 6: Market Penetration in Depends on the decision of  Financial Budget

South Tucson Stan.  Manpower
Open shops in local area.  Time

Step 7: Entering E-commerce Depends on the decision of  Financial Budget

Introducing different Stan.  Manpower
platform, utilizing internet  Time
and customers can buy thru  Database
online.  Internet