Pacific Market International: Case Study and Teaching Note

By Wark, John; Phillips, J. Mark | Journal of Business and Entrepreneurship, Spring 2013 | Go to article overview

Pacific Market International: Case Study and Teaching Note


Wark, John, Phillips, J. Mark, Journal of Business and Entrepreneurship


ABSTRACT

Rob Harris, the founder of Pacific Market International, suffered a breach of trust early in his career that not only inspired him to found an international manufacturing and design company, but also influenced the manner in which he dealt with his employees, suppliers and customers. This case provides a unique look at an American entrepreneur forging partnerships in several Pacific Nations despite a lack of language skills or financial resources. While building his company, Rob faces challenges that force him to reexamine his business model, chart new growth strategies, and revisit his long-professed loyalty to his workforce. Ultimately Rob faces the choice of selling his company, staying the course or charting yet another course of expansion.

INTRODUCTION

As he sat in his office in downtown Seattle and looked out at Elliott Bay just a couple of blocks downhill from his office, Rob Harris knew he needed to make some decisions. It was a time for transitions - the week of the 2000 presidential election. With a two-term incumbent leaving office, it meant a change in leadership. Rob wondered if that was an omen for what lay ahead for PMI.

Jerked Into Entrepreneurship

Rob Harris resigned his job as head of sales for a sheltered workshop in Seattle, WA in June, 1983. The workshop's Director had just proposed restructuring Rob's compensation. On joining the workshop in 1981, Rob had proposed taking a lower base salary and a greater commission on sales than had been offered by workshop leadership. They had been happy to agree to the proposed plan - lower fixed costs were always a good thing for a cash-strapped non-profit like the workshop. They had also agreed to Rob's proposal that his compensation plan be fixed for the next five years. A handshake sealed the deal.

Driven by Rob's success in sales, revenue at the 20 year-old sheltered workshop grew from approximately $500,000 to over $4,000,000 in 2 1/2 years. After his totally unexpected success, Rob was earning more than the workshop's Director. This could not stand, hence the proposal to renegotiate Rob's compensation, immediately followed by Rob's resignation. As Rob recalls, "It wasn't about the money, it was because I couldn't trust them any longer. I couldn't work with guys I couldn't trust. They jerked me around and broke our deal."

"When I left the workshop, I had no idea what I was going to do, but I knew I was going to start my own company," Rob recalls. That might not have seemed the most obvious answer. Rob had been in Seattle for less than three years. He grew up on the East Coast and had received a Master's Degree in Rehabilitation Counseling. After earning his master's degree, Rob had worked for a year at a short-term psychiatric hospital in New Jersey where he ran group therapy sessions and did individual therapy work. After a year or so of this, he decided that he wanted to live elsewhere and selected Seattle as his new home. Rob moved to Seattle and quickly found the sales position at the sheltered workshop. He says, "The workshop combined some of my interests. I had always been interested in business plus the sheltered workshop tapped into my interests in social service work and helping other people."

Looking For New Opportunities

Rob's success in growing the workshop was at least partially driven by his recognition of Seattle's role as an important port-of-entry for America's burgeoning trade with Asia. This created opportunities to provide light manufacturing, assembly and repackaging services to companies importing goods from Asia before those goods were routed to their ultimate destinations in the U.S. Rob made many contacts at the Port of Seattle, with importers, and with other organizations involved in Asian trade.

Rob knew the growing interest among American companies in sourcing products in Asia. He knew from his involvement in various international trade groups that everybody was talking about doing business in Asia but that very few knew how to do it.

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