Chris Maxwell
MKT 682
Case Study
October 29, 2014

Circle Corporation

Circle Corporation is a small company that was started in 2001. The founder of the company is Yong Soo Kang, and he started this company with his own savings of $350,000. Before doing this he worked in Hyundai Motor Group where he started as a machinist but eventually managed the sheet metal forming processes. Circle Corporation is located in the southeastern part of Korea, in a city by the name of Busan. The company manufacturers various machine parts but specializes in mufflers and ferrules for automobile air conditioning, which helps to reduce the noise and increase the system reliability. Busan is the fifth largest seaport in the world, which helps this company out by being able to sell and trade these materials easily through ship transportation. The company is fairly small but does a lot of business with automotive companies. Its largest customer is Hyundai. Circle sold roughly 3.5 million ferrules and about 120,000 A/C’s every month by the end of 2010. In 2010 the company had revenue of about $6.2 million and buy the end of 2011 it was at $6.6 million. Their biggest jump was from 2007 to 2010. The company is now stuck and needs to bring in more revenue and is looking outside of Korea. With Circle wanting to branch out into further regions so that it can bring it more revenue it will have to deal with some competition. Right now there are a number of companies that they would have to go up against. Some of those would include Yam Corporation, which is also located in South Korea and Jiangtong Medical Group, which is located in China. There is also another major company located in Tennessee, which is called Power Press. These companies all sell most of the same things that Circle is trying to sell as well. Yam Corporation and Jiangtong will be Circles main competitors because they sell to majority of the same companies like Hyundai. Circle will really need to step its game up and produce better ferrules and A/C’s if they are hoping to compete.

Some of the factors to think about when considering a bid from a company would defiantly have to be the amount of revenue that would be coming in off of each of the products. Also another thing to think about would have to be the amount of money they are going to lose on the product after they make it and sell it. The last major thing to think about would have to be the automobile companies that they are going to sell to. Depending on the types of cars the companies sell to will determine if the air conditioning systems and ferrules will do well. I think that Circle Corporation should go for the AutoAc’s business, I think that it is the company that is most reasonable to the money they are trying to spend and that will also help with the revenue coming back in. They wont be losing much on the A/C’s they are building and selling and they will also get more revenue once they convince them to use the ferrules that they can make.