Question

Organic Towel Exports (Scenario)

The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's. Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
Which of the following most likely supports OTC exporting their towels to Earth Waves?
A) Domestic sales of OTC towels have dwindled, and a new market is needed.
B) Earth Waves is located in an excellent location in central Toronto.
C) OTC is an SME that can readily adapt to the demands of the Canadian market.
D) The founder of OTC has numerous contacts in Canada.

Answer 1

The option that most likely supports OTC exporting their towels to Earth Waves is:
A) Domestic sales of OTC towels have dwindled, and a new market is needed.

Step-by-step explanation:

This option suggests that OTC is facing a decline in domestic sales, making it necessary to explore new markets for their towels. Expanding to international markets like Canada, as indicated by the order from Earth Waves, can help OTC tap into a new customer base and potentially boost their sales. It implies that OTC is actively seeking opportunities for growth and is responsive to changing market conditions, which makes exporting to Earth Waves a strategic move to revitalize their business.

While the other options provide some relevant information, option A directly addresses the need for new markets due to declining domestic sales, making it the most compelling reason for OTC to consider exporting to Earth Waves.

Therefore, the option that most likely supports OTC exporting their towels to Earth Waves is:
A) Domestic sales of OTC towels have dwindled, and a new market is needed.