Chapter 1 Ranger Supply Company Motivation for International Business anger Supply Company is a large manufacturer and distributor of office supplies. It is based in New York but sends supplies to firms throughout the United States. It markets ts supplies on its website and through periodic mass mailings of catalogs to those firms. clients can make orders at the website or over the phone, and Ranger ships the sup- Plies upon demand. Ranger has had very high production efficiency in the past. This is tributed partly to low employee turnover and high morale, as employees are guaran Job security until retirement. Ranger already holds a large proportion of the market share in distributing office supplies in the United States. Its main competition in the United States comes from one U.S. firm and one Canadian firm. A British firm has a small share of the U.S. market but is at a disadvantage because of its distance. The British firm's marketing and trans- portation costs in the U.S. market are relatively high. Although Ranger's office supplies are similar to those of its competitors, it has been able to capture most of the U.S. market because its high efficiency enables it to charge low prices to retail stores. It expects a decline in the aggregate demand for office supplies in the United States in future years. However, it anticipates strong demand for office supplies in Canada and in Eastern Europe over the next several years. Ranger's execu- tives have begun to consider exporting as a way to offset the possible decline in domestic demand for its products. a. Ranger plans to attempt penetrating either the Canadian market or the Eastern European market through exporting. What factors deserve to be considered in deciding which market is more feasible? b. One financial manager has been responsible for developing a contingency plan in case whichever market is chosen imposes trade barriers over time. This manager proposes that Ranger establish a subsidiary in the country of concern under such conditions. Is this a reasonable strategy? Are there any obvious reasons why this strategy could fail