Babson Case Number: BAB124| Length: 17 Pages

Abstract

Andres Galindo is a young Colombian from an upper-middle class family in Bogotá. With his brother Carlos serving as the sole importer in the country for the top American brand Electra Sportswear, Andres sets out to create a chain of retail stores located in high end shopping districts. Understanding that his legally imported goods (due to 40-120% import tariffs) were at a dramatic cost disadvantage to openly marketed illegally imported brands and counterfeit labels, Andres decides to approach the problem as a retailing and marketing challenge by adding value through the retail sales process.

By 2005 Andres has fourteen stores, and a new challenge. Electra has decided to cut out the middle man—Carlos—and have Andres import the product directly. This ought to lower margins, but it’s a big step. Most important, though, is crafting a growth strategy for his company in the face of unfair competition and a relatively small target population.

The case should be positioned near the end of a New Business course—after the initial cases that are funded by the 4Fs and immediately before the formal venture capital case. It could also be used in a Growing Businesses course, or an International Business course.

Topics:, Entrepreneurship as a career choice, finding and shaping an opportunity, sports clothing retailing, wholesale purchasing and retail pricing, importing, competing against black market and illegal imports, hiring and maintaining a retail workforce, family members as partners and employees, funding, managing a multi-city expansion, manufacturing partnerships and supplier relationships, inventory systems and software, government regulations and licensing, growth strategies, keeping a low profile in a dangerous country.

Teaching Objective
To present a framework for opportunity assessment, shaping and growth in a culturally specific context outside of the United States.