CNS Breath Right Strips: Going Global
Statement of Problem
There are various types of health issues around the world today and people continue to
actively seek information or remedy for their health issue. The health care industry is
expanding and constantly requires innovations, inventions, test and experiments to meet
the needs of every one. CNS Inc is amongst Hundreds of health care businesses that
provides care for breathing issues. One of their products for breathing is the breath Right
Strips which accounts for 90%of the nasal strip market (innovative problem page 4,
www.cns.com/search) Because of the success in United States; the company has gone
global within the last five years to capture the international market. However for the
company to have a positive bottom line they have to careful chose what country they will
operate and type of marketing they will implement .CNS Vice presidents for international
affairs said that “the real key to success in a market is a local partner that is
entrepreneurial and has an ability to execute in terms of achieving distribsution and
sales”(Marketing, Kerin, Roger A,Berkowitz,Eric 198)The company is at the mercy of
international government policies which adversely affect their business.
Summary of Facts
Breath Right products from CNS can be found in twenty seven countries around the
world. Below is a financial highlights for CNS copied from the financial page of the CNS
website.
Record Fiscal 2006
Net sales for the 2006 fourth quarter were $32.1 million, up 13 percent compared to
$28.4 million in the same period last year. Net income for the quarter grew 14 percent
to $4.7 million .
For the fiscal year, net sales grew to a record $112.6 million, up 20 percent from
$93.7 million in fiscal 2005. Net income rose 26 percent to $17.2 million, or $1.15 per
diluted share, compared to fiscal 2005 net income of $13.7 million, or $0.93 per diluted
share.
Breathe Right domestic sales grew 9%; Breathe Right international sales up 32%;
CNS relies on third-party manufacturers for breath right products. “Our Breathe Right
nasal strip is manufactured by a single-source manufacturer. The raw materials for our
Breathe Right nasal strip are being supplied by a single-source supplier. Any failure of
these parties to deliver our products or raw materials would cause delays, increase our
costs or prevent us from completing customer orders.”(CNS 2006 Annual Report)
Analysis
According to the 2006 financial report, Breath Right strip domestic sales grew 9%
and international sales grew by 32%. This implies that a higher percentage of the
business revenue is derived internationally. The business therefore has to have a plan
to retain its international customers, withstand competition in other to survive in the
market. The business started in the United States but is now financially skewed to the
international market. Going global exposes CNS to the following risks as stated in
their 2006 annual report:
• Foreign governments may impose tariffs, quotas and taxes;
• The demand for our products will depend, in part, on local economic health;
• Expense in developing advertising and marketing campaigns targeted to consumers in
foreign countries;
• Political and economic instability may reduce demand for our products;
• Potentially limited intellectual property protection in certain countries may limit our
recourse against infringing products or cause us to refrain from selling
our products in certain markets;
• Regulatory restrictions may require additional qualification or testing, resulting in
further cost and delay in reaching the related markets;
Not withstanding these odds, there are also some advantages involve in taking the
business global:

A wider customer base with an increase size of all market segments.

Reduction in operating cost. It can be relatively cheaper to pay an employee in
other countries than in America.

Increase customer count will result to increase sales and hence higher revenue.
With CNS using its three stage process to enter a new global market, they can minimize
some of the risks involve in going global. Going global should be a selective process not
random and by implementing the three stage process ,CNS can be certain of where the
target market is and what market segment they should focus on and also what type of
products should be introduce in that market. One disadvantage of this process is that it
can be costly and there is no guarantees that once the business is establish it will be 100%
successful. In most international market the political and economical atmosphere is
unpredictable.
Recommendation
According to CNS 2006 annual financial report,
The competitive strengths of CNS are as follows:

Development of strong brands between attractive niche categories

Proven ability to develop technologies and products

Efficient Operating Model

Experienced management Team
The market Segments are as follows:

Nasal Congestion market

Snoring Market

Improve Breathing for Consumers with Deviated Septa

Athletic Market.
I will recommend the following.
1. Before establishing in a country sign an agreement with the International government
for patent right protection.
2 Build upon their competitive strengths and credibility by creating a comprehensive
training program package for their international staff. Customer service should also be
part of the training. This can ensure that they have a cohesive team that can strongly react
and withstand any competition in the international market.
3 Constantly improve the quality and packaging of products and reflecting the culture of
the consumers on the product. This can be done by creating a special task force from the
international market to careful study the culture of the consumers and there regular
business practices.
4. Target the Nosing congestion market segment to enter a new market in the
international market. The climate in Asia, Africa and some part of Europe is tropical. The
weather changes from hot to cold continuously and there is a high percentage of people
suffering from nasal congestion. Snoring is not considered a health issue in Africa and
Asia or most developing countries.
5. Increase number of suppliers to ensure constant flow and maintain sales. Relying on
one supplier is a big risk.
Conclusion
I will strongly state that a timely implementation of all recommendations will produce a
fruitful results for CNS and all it’s stakeholders.
REFERENCES
www.cns.com