I. Summary of the Problem

Erika Graeper, an employee of DGG received a letter from Cecil Armstrong, the president of Queensland Office Supply Ltd., in Brisbane, Australia and the letter was supposed to be addressed to Herr Heinrich Dumart, the president of Luna, in Frankfurt Germany. In the letter, it was a complaint made by Armstrong on the difficulty in obtaining the Luna Pens for the retailers with whom he dealt. LUNA pens had been out of the business for years now. Also, Armstrong had also written that Mr. Alven Feng assures him that the manufacturing of the pens is being stepped up to meet the increase of demands but the deliveries are often late and is insufficient to satisfy the customers needs. Alven Feng is the Managing Director of Global Services. The company distributes the LUNA pens. In the letter that Cecil Armstrong sent, there was another letter attached to it that came from Alven Feng. It stated that Alven Feng promised new pens would be delivered shortly but also stated that while Luna was striving to meet the increased demand, it did not want to compromise he quality.DGG (Deutsche Grusskarte Gesellcraft) was a small greeting card company but throughout a series of acquisitions and mergers they become a stationery and then office products company. The company expanded beyond Germany and because of its fat earning statements (net earnings average 15% of revenue for the past five years.) the company has become the golden goose. Luna was a small company owned and operated by the Dumart family for almost 60 years. The annual revenues between 1994-2004 were approximately 21 million. In 2005, when the senior Dumart was approaching retirement age, he sold his firms stock to a larger stationery company although he stayed to manage the pen business. Three years later, DGG acquired that stationery company as a vehicle for manufacturing and marketing copy and printer paper. Luna was not actually central to the deal but DGG had made some effort to spin it off. With the death of Herr Dumart and the continuously annual losses of Luna, it became the least of their interest.Erika Graeper was tempted to respond to Armstrong and simply tell him that the Luna Pen has gone out of business for years now but still it felt confusing because Armstrongs company is still receiving supplies from Alven Feng of Global Feng. Instead of telling Armstrong that the pen had gone out of business, she acknowledged his letter and apologized for the delayed response. She also explained that the Luna had been acquired by DGG and that she had only recently assumed dome responsibilities. In Erikas trip to Malaysia, she saw a Luna Pen on a store and in that moment she realized that she was buying a counterfeit pen. Alven Feng or somebody behind him had used the name of Luna when DGG tore down the Luna Factory.When Erika returned from her trip, she immediately opened up the topic to her boss Wilhelm Mann about the Luna Pens. They were able to make two options in solving the case: 1. DGG could bring suit against Feng and Global to recover damages for past trademark violations; 2. It could negotiate some sort of settlement with Feng in respect to prior royalties and the right of the future of Luna name, either through some sort of on-going licensing arrangement or an outright sale; 3. DGG might find some other enterprise that would be interested in buying Lunas goodwill.The situation called for a serious negotiation with Alven Feng. Erika got the authorization from Mann to investigate Alven Feng and Global Service. She learned that Global Service is a legitimate company owned by the Feng family. It is a private company therefore financial information was not available but knowledgeable observers estimates that it trade activities are in excess of 43.7 million annually. Even though the profit figures were difficult to obtain, but the investigator suggested that the usual return for this type of firm was between 8% and 13% of revenues. The company acted as the middleman, distributing other companies products. One of its more lucrative activities was said to be the Asian distributorship of Luna pens, which it both manufactured and distributed, the investigator estimated that Luna pens and other Luna brand products accounted for approximately of Global sales. Erika Graeper will have to negotiate to Alven Feng on whether DGG will push through a lawsuit or suggest a joint venture since DGG is growing in Asia.

II. Problem StatementDUE TO THE DIFFERENCE IN CULTURES OF ALVEN FENG OF GLOBAL SERVICES AND ERIKA GRAEPER OF DGG, HOW AND WHAT WILL ERIKA GRAEPER NEGOTIATE TO ALVEN FENG ON THE ISSUE OF THE COUNTERFEITING OF LUNA PENS?III. Objectivesa. To give justice to the Luna Company that was indirectly acquired by DGG.b. To find a way to negotiate to Alven Feng on the issue of the counterfeiting of Luna pensc. To expand DGGs horizons in the Asian market.

IV. Risk AnalysisA. Identification of the Risks present on the case.a. Market RiskFountain pens are already out of the market because of ballpoint pens and there is no assurance that if Luna pens will out in the market again they will be saleable to everyone. If DGG will have a joint venture with Global Service in the selling of Luna pens, DGG must know first who to sell these pens. b. Strategic RiskSince Luna pens are out of the business plan of DGG, it would affect their business practice if they will insert the Luna pens in their business. Demands for fountains are not yet determined and there is no assurance that it would be a big boost to their companys revenues just like what it did to Global Service.c. Compliance RiskThere is a violation that was made by Global Service, which is a Trademark Violation. Even though DGG has indirectly shut down the Luna industry but still it didnt totally erase the name of Luna. The Luna company is still part of DGG although it is not part of the companys interest. Global Service didnt notify DGG that they will use the name of Luna as a trademark to their pens.

B. Control/ Measure of Riska. In controlling Market Risk and Strategic RiskSince these risks involves the demands of current and future customers, DGG must first survey to people and ask if they are willing to buy fountain pens. The company must be able to determine their market if they will insert Luna pens on their business ventures.It is very risky to have a joint venture with Global Service for the Luna pen because it is just a memory to some people and trying to make it saleable again might be difficult because new types of pens such as ballpoint pens are already in the market and it is more convenient that those fountain pens. Fountain pens might only be saleable to artists, stenographers or people who would want a souvenir from the past.b. In controlling Compliance RiskSince the Global Service had a Trademark Violation, they might experience law suit against DGG because Luna is still indirectly part of DGG although they have already shutdown the factory but the company is still on DGGs ownership. To control this risk, the legal adviser of the company must meet up with Alven Feng and tell him about the violation and the possible consequence that they might face. It is important to notify Alven Feng of this matter because they need to be aware about the ownership of the name of the pen. Even though the Luna pen is the least of the interest of DGG, it is still part of the companys acquisition of the stationery company.

V. S.W.O.T ANALYSISa. STRENGHTS i. DGG has a good reputation in the industry. With the revenue of the company being impressive, they are one of the top industries for office supplies.ii. Erika Graepers knowledge on the non-European cultures. With her knowledge on other cultures, she can adapt to the environment that she will face when meeting with Alven Feng. Her communication skills will help her in the negotiation with Alven Feng.iii. Global Service has also a good reputation in the Asian industry. The Luna pens compose a big portion of their revenues.b. WEAKNESSESi. Undetermined Demand for the pens in the non-Asian countries. Since in Asian countries there are already some damns of the Luna pens because of its presence due to Global Service, if DGG will have a joint venture there is no assurance that it will be a trend to non-Asian countries as well. Also Luna pens are the least of DGGs main interest since they already voluntarily left the market.ii. Erika Graepers lack of experience. She is still new to the company and if she is going to negotiate with Alven Feng there is no 100% assurance that it would be a success.iii. Global Services trademark violation. They might be sued for the violation and might cause them to shut down if they will lose the case.c. Opportunitiesi. Possible partnership with Global Services. If Erika Graeper will negotiate with Alven Feng by hinting a joint venture with then DGG will have a possible higher revenues because of the addition of investments.ii. DGG expands it horizons to Asian countries. DGG will have the opportunity to explore other countries and their interests and with this DGG can also find ways to innovate its products.iii. Both companies, Global Service and DGG, will be able to expand their interests on different countries.d. THREATSi. Because of the trademark violation, Alven Feng and Global Sevice might experience law suit against DGG. DGG still owns Luna indirectly because of its acquisition of the stationery company that acquired Luna and they didnt formally dissolve the Luna firm, the reality was it has been out of business for years.VI. S.W.O.T Grid Analysis and Possible AlternativesSWOT Grid AnalysisPossible Alternatives

S.1+W.1+O.1The company can have a joint venture with Global Service for increase in revenues.

S.2+W.2+O.2Through Erika Graeper, there will be a negotiation on the possible future of Luna future expanisions of Global Service as well as DGG. It is just the same as the first alternative.

S.3+W.3+T.1DGG will file a law suit against Alven Feng and Global Service because of Trademark Violation.

VII. Recommendationsa. Erika Graeper will negotiate with Alven Feng about a possible joint venture with DGG.i. Pros1. DGG will expand its horizons and they will be able to earn more because of the addition of possible market.2. A partnership with Global Service. In the negotiation process that will be held by Erika Graeper, it is a good opportunity to open up on a possible partnership so that both companies will help each other in attaining a good reputation not only in one country but possibly worldwide.3. New possible market for both companies. If DGG will approve of a joint venture, Luna pens might be on trend again since people will be curious on such product.ii. Cons1. Luna pens is the least of DGGs interest. They main focus is on office supplies.2. Erika Graeper might not pull off a successful negotiation. It will also depend on how she will address the negotiation; if its aggressive or conciliatory.b. File a lawsuit against Global Service because of Trademark Violation.i. Pros1. Luna Company is still part of DGG and this means that DGG still owns the company even if it has been out of business. They never have formally dissolved the company.2. Possible punitive damages that might be won.ii. Cons1. In a typical trademark violation, the complaining party measure its damages in terms of lost market share and tarnished reputation. DGG had voluntarily left the market, therefore there wasnt any loss.2. Prosecuting a suit would be very expensive.3. And should DGG not prevail in court the company might be liable to pay legal costs of the winning parties. Threat of litigation might be the only way possible to bringing Feng in the bargaining table.VIII. Best Alternative/ RecommendationThe best alternative is to NEGOTIATE WITH ALVEN FENG IN A CONCILIATORY MANNER ON POSSIBLE JOINT VENTURE. But before Erika Graeper will open up the topic on joint venture, she should notify Alven Feng on the Luna Company that is still in the ownership of DGG. After notifying Alven Feng she can give him a hint about a possible joint venture. With this recommendation, DGG might be able to expand its horizons and its interests. Although Luna Pens are the least of their concern but it might help them in having a higher percentage of returns and revenue.IX. Action PlanSince Erika Graeper already have a scheduled one week trip to Taipei, she can already have a meeting within that week with Alven Feng regarding the issue of the Luna. If this case will be seal the deal then Erika Graper will be making a good impression to her boss.