The Ginsung Motor Company manufactures automobiles in Taiwan and has accumulated a great deal of experience supplying the home market. Recently it has been considering entering the United States market. It plans to test market some of its cars in Hawaii before expanding to the mainland states. The purpose of the test marketing program is to decide on the competitive strategy it will use in the mainland market.

Ginsung produces four different automobile lines for its home market. The smallest is its “City” commuter car, which is only seven feet long yet has adequate room for two adults and for groceries in the trunk. Interior trim is basic, the car’s performance is moderate, and fuel economy is very high. Next is the “Rocker,” a youth-oriented performance car that seats four without any room to spare. It has a peppier engine, is sold in several wild color schemes, and has a fairly good stereo system as standard. The “Family” model is somewhat larger, seats five adults, and has a larger engine and moderately comfortable interior trim. It is a look-alike version of the typical Japanese subcompact car. Finally, the “Executive” model is larger and seats five adults in great comfort. Interior trim is luxurious, and performance is stately and comparable to the typical American compact.

Ginsung has incorporated the latest quality control techniques into their plant. The man¬ ufacturing process tends to be relatively labor intensive because of the high productivity of the workers and the relatively low wage structure. Everyone on the management team received an M.B.A. degree at an American university or college.

(a) Outline the alternative competitive strategies that Ginsung might adopt in the mainland market, and the pros and cons of each as you see it. Which seems like the best strategy to you?

(b) What do you think Ginsung should do in Hawaii to test your hunches about the receptive¬ ness of the American market to their products? (Consider quality, pricing, and advertising decisions.)

(c) What other information would you seek before giving your final advice about their competi¬ tive strategy for the mainland market?