Directorate of distance education

particular, the rebuilding of Eastern Europe offered a potentially lucrative 
power semiconductor market. OVM sales were expected to increase mod-
estly in 1993.
Future growth in Europe was threatened, however, by stagnant 
economies and the fear of “Fortress Europe.” In 1987 European leaders 
agreed, through the Single European Act, to create a single, integrated 
market. This borderless Europe opened protected markets, creating a large 
regional trading bloc. Some business analysts predicted that this trading 
bloc will erect trade barriers designed to protect European-domiciled 
companies, thus leading to a “fortress” mentality.
Troubled by such predictions abroad and eroding market share at 
home, ZEI sought the advice of an international consulting firm. In initial 
discussion with the consultants the Zwick brothers had underscored three 
primary objectives:
1. Maintain SEI’s access to international markets as regional trading 
blocs develop. The Zwick brothers believe that several of their 
products could attain substantial success abroad.
2. Increase international sales of SEI products at a greater pace than 
OVM had attained. SEI would like international sales to be 15 to 
20 percent of company sales by the year 2000. The Zwick brothers 
doubt a manufacturer’s representative will be able to produce that 
level of sales.
3. Find complementary product lines from overseas suppliers to add 
to ZEI’s United States product line. Product development costs 
hamper ZEI’s efforts to develop complete product lines in-house. 
Evidence suggests that ZEI is losing business to domestics and 
foreign competitors that offer more complete product lines. Many 
of those competitors enjoy substantially lower product development 
and production costs by developing and sourcing products from 
lower-cost countries. 

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Notes
181
As the dialogue with ZEI continued, the consultants identified 
several areas of concern. First, despite ZEI’s nearly five-year relationship 
with OVM, the level of international business “savvy” with SEI was quite 
low. Second, neither Zwick brother indicated any desire to relocate 
outside the United States. Third, the Zwick brothers were so accustomed 
to making their own decisions that consultants wondered how effectively 
they would work with an outside organization. Of course, the consultants 
also realized that foreign competition and sliding profits had convinced 
many7 American companies to reexamine the way they did business. With 
that in mind, the consulting firm has suggested that SEI consider, as one 
alternative, entering into a business relationship with either ABB Asea 
Brown Boveri (ABB) or Siements AG.