Loctite Hbr Case - Executive Summary Essays

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Loctite Corporation – International Distribution Fifty years of business has been good to Loctite, a manufacturer and marketer of adhesives, sealants, and other related products. Most recently, the company has started thinking about its international distribution strategy in Hong Kong; Loctite has turned to its already-established and successful ventures in other foreign countries to explore its potential strategies and find a model for success in Hong Kong and ultimately greater China. Currently, Loctite’s distribution strategy is composed of different levels, all building up to the eventual acquisition of equity in the international distributor in order to set its core brand and marketing mix. The first stage of expanding its …show more content…
This deal has been very lucrative not only for Loctite but for its distributors as well, allowing them to obtain margins between 30% - 35%.
In contrast to the North American selective distribution strategy, Loctite uses an exclusive distribution strategy overseas. Exclusive distribution is a situation in which only certain dealers are authorized to sell a specific product within a particular territory. By participating in exclusive distribution, again Loctite is able to maintain more control over the level of service provided. By granting exclusive distribution, Loctite maintains control over how its products are merchandized, marketed, and branded. In other words, Loctite is able to more tightly control its brand image. Unlike the 12 region structure in North America, overseas distributorships are structured into three regions—Europe, Latin America, and Asia/Pacific—each overseen by a region manager. The North American region is run by the president of Loctite, and he along with the other regional managers report directly to the COO.
Overseas, Loctite operates in each country differently. In Taiwan the distributor is a large conglomerate operating in many businesses besides industrial adhesives. The opposite is true in Indonesia, where the distributor is a small family owned business. Loctite grants exclusive rights in a territory and then provides as much support as needed. In order to keep a handle on its overseas