Case Name :      Foxy Originals – Expansion into the U.S. Market

Authors :           Elizabeth M.A. Grasby, Nina Gupta

Source :             Ivey Publishing

Case ID :            907B04

Discipline :        Accounting

Case Length :    09 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

A successful Canadian jewelry manufacturer and distributor contemplates entering the U.S. market and how best to do it. Students are required to: 1) identify costs relevant to the decision and categorize them as either investments, fixed costs or variable costs; 2) calculate unit contribution, contribution-margin ratio and weighted-average-contribution-margin rates; 3) perform a breakeven analysis and interpret its meaning using relevant parameters; 4) project profitability of a chosen distribution strategy; and 5) perform sensitivity analysis with respect to the expected sales level. Students are required to understand and analyse the opportunities and risks associated with entering a new geographic market and combine their qualitative and quantitative analysis when deciding which distribution strategy to pursue.