C & k Pharmaceutical Supplies plc

One of the explanations for the world's population explosion during the last hundred years has undoubtedly been the increasing availability and effectiveness of medicines. That, in turn, accounts for the growth of the modern pharmaceutics industry.

For C & K the story starts in 1902 when Kurt Krageloh left his native Bavaria to set up as an apothecary in the City of London. As well as selling his various medications and potions to the City gentlemen he began to provide them in bulk for others of his profession in the outlying districts. By the outbreak of war in 1914 he had switched completely to wholesale operations. It was then that the business faced its first major crisis, since a large part of its medical supplies came from Germany. Fortunately for Kurt his sister had married an American surgeon and when she heard of his predicament she was able to put him in touch with a New York merchant, Sam Cordle, who was able to bridge the gap in the supplies of vital medicines.

Subsequently, Sam Cordle visited England and, after lengthy discussions with Kurt, they agreed to set up a new company, Universal Medicines Ltd, in which Sam held the controlling interest. The objective of the new company was to act as the European distributing agent for the products of Cordle's firm in New York. Universal Medicines expanded steadily through the 1920s and 1930s, even after the death of the founders. In 1969 it changed its name to C & K Pharmaceutical Supplies and went public. Soon after that Sam's eldest son, Jim, bought out the interests of the Krageloh family and the company now functions as a wholly owned subsidiary of the Cordle Group.

Questions (answer in writing)

1. How might a war damage any company which conducts business overseas?

2. How did Kurt's sister come to his rescue in the C & K story?

3. What problems would you expect to emerge when a company like Cordle's, tries to exercise control over British (and European) subsidiaries?

4. Do you think a government should encourage or discourage overseas investments such as these?

5. How would you expect the operations of C & K to affect the UK balance of payments?

6. How do you view the contention that British companies should avoid trading with overseas companies as far as possible?

Section F. Summarising

Give the following passage an appropriate title and summarise it in Russian in about 150 words.

When a British marketing manager turns his attention to overseas markets one of the problems could be seen as communication in an unfamiliar environment. If we are attempting to penetrate an international market we first have to receive an accurate picture of that market. What is its nature and extent? How does it differ from our more familiar home market? The further afield we look, the more difficult it becomes to get an accurate picture. In brief, our market research becomes more difficult and less trustworthy.

In order to trade profitably overseas we have to select the right market or markets to enter. There is a temptation to try and sell in as many markets as possible, but that temptation should be resisted. By concentrating our resources on a few carefully selected areas, we can maximise total profit on sales rather than spread investment too thinly. Some information can be assembled without us moving from our desks. Our banks can help us with information on general economic and trading conditions, the sort of competition we might expect, and even the marketing methods which are most likely to succeed.

When we have identified our market, we will have to visit the country or countries concerned. We will have to make contact with potential customers whose very language is strange to us. Of course we have in our favour the fact that English is the international language, and certainly the language of commerce. Yet, in some ways, it is the overseas buyers who have the advantage. They know our language almost as well as theirs. Our handicap is that we know only our own language as we go about our task of persuading them to buy our products.

No doubt this is why British exporters are generally advised to avoid direct selling in a new export market. The best way to gain a foothold is through a local agent or distributor. Once again our bank can help in finding an agent in the overseas territory who is both reputable and effective.

Section G. Write a report

You are employed in the Exports Department of the Mediterranean Trading Corporation and your Manager, Denise Appleton, has asked you for a brief report (no more than 200 words) on the data shown in the accompanying pie-charts. She wants to know what these diagrams show with regard to Britain's trading patterns.