A small Canadian firm that has developed some valuable new medical products u...
A small Canadian firm that has developed some valuable new medical products u...static/image/hrline/3.gif
Question:A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Community market. Its choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm's only options, which one would you advise it to choose? Why?Option 1: Manufacture the product at home and let foreign sales agents handle marketing.Option 2: Manufacture the products at home but set up a wholly owned subsidiary in Europe to handle marketing.Option 3: Enter into a strategic alliance with a large European pharmaceutical firm. The product would be manufactured in Europe by a 50/50 joint venture, and marketed by the European firm.
Business ExpansionBusiness expansion is a term that is defined as adding value to the current business by acquiring different business opportunities to sustain and maximize profits.
Answer and Explanation:Option 1 and 2 can be considered when the business must maintain its hold on the pricing policy and quality control of drugs. Moreover, if the firm is willing to own a subsidiary, it will be beneficial in the long run. In contrast, if the firm hires a foreign manager, he will acquire customers and expand the business.Option 3 can be considered when the firm needs to acquire foreign business opportunities and work as a joint venture. Moreover, the firm needs not hire a foreign agent for this.
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