International Business 3rd Edition - Charles HillIrwin McGraw-Hill
Student Resources
Chapter 15: Exporting, Importing and Countertrade



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Case Discussion Question

Closing Case Downey's Soup

Website — http://www.downeysrestaurant.com

Case Discussion Questions
  1. Did Downey Foods' export opportunity occur as a result of proactive action by Downey or was its strategy reactive?

  2. Why did Downey experience frustrations when trying to export to Japan? What actions might Downey take to improve its prospects of succeeding in the Japanese market?

  3. You have been hired by Downey Foods to develop an exporting strategy for the firm. What steps do you think Downey should take to increase the volume of its exports?

Internet Exploration Question

This case recounts the disappointing experience that Downey Foods Inc. had in its attempt to export soup to Japan. Downey Foods is a company that originated in an Irish tavern in Philadelphia named Downey's. Downey's sold a lobster bisque soup that attracted the attention of a Japanese trade organization in Philadelphia. After catering its soup to a trade show sponsored by the Japanese organization, Downey started thinking about exporting its soup to Japan. The company was encouraged by the Japanese External Trade Organization (Jetro) to pursue its idea. Jetro even treated a Downey executive to an all-expenses-paid 10-day marketing trip to Japan, where the company received its first order for 1,000 cases of lobster-bisque soup. Downey Foods, which had visions of significantly increasing its sales through exports, made the soup and shipped it to Japan. To Downey's surprise, the soup was detained at customs in Japan, and was rejected because of the presence of a food additive. Downey modified the soup and sent it back. The soup was detained again, for another reason. Downey didn't give up, and kept modifying the soup. However, each time the soup was modified to satisfy a Japanese custom's concern, a new concern surfaced. Eventually, Downey gave up. The questions that lingered were, "Where was Jetro when Downey's soups were stalled in customs?" and "Why didn't Jetro tell Downey that they needed a local partner to sell food products in Japan?"

This case provides an excellent example of how a seemingly promising export opportunity can go astray. To avoid the type of problems that Downey experienced, first-time exporters are often advised to hire an export management company to help them get off the ground. As described in the textbook, EMCs are export specialists that can provide assistance, training, and a variety of other services to first-time exporters. The following are the website addresses for three export management companies based in the U.S.: Spend some time navigating these websites and then address the following questions. First, what are the primary services offered by export management companies? Second, does it make sense for a first-time exporter like Downey Foods to utilize the services of an export management company? Finally, do you think that Downey could have avoided some of the mistakes that it made if it had retained an export management company familiar with the Japanese market? Why or why not?




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