njsue Posted September 26, 2004 Posted September 26, 2004 You are the international manager of a US business that has just developed a revolutionary new personal computer that can perform the same functions as IBM and Apple computers and their clones but costs only half as much to manufacture. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe. Your options are (i) to export from the United States, (ii) to license a European Firm to manufacture and market the computer in Europe and (iii) to set up a wholly owned subsidiary in Europe. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO. Thank you all for your help
aussiew Posted September 27, 2004 Posted September 27, 2004 You're reminding me of why I didn't go back for my masters degree Sue. In this excercise, are you allowed to consider anywhere in the world as a place to manufacture the product? Or are you restricted to US vs. Western Europe?
PastaJoe Posted September 27, 2004 Posted September 27, 2004 Some issues to consider i) Pro-Maintain close control of technology and production process, create American jobs which enhances image domestically, and potentially receive tax breaks. Con-Possibly higher labor costs, shipping and distribution costs, import taxes or penalties entering European market, market penetration costs. ii) Pro-Less startup costs working with existing manufacturer, possibly avoid taxes/penalties associated with imports, possibly take advantage of name recognition and market knowledge. Con-Less control over manufacturing process and quality, have to share technology, less productive workforce. iii) Pro-Maintain close control of technology and production process, possibly avoid taxes/penalties associated with imports. Con-Have to startup both manufacturing and marketing in new territory, may generate negative image in U.S. by creating new jobs overseas instead of domestically. Given the limited information, the best option would be ii, liscensing. You would be working with a company that is assumed knowledgable in the market, and if the venture didn't work out as planned the investment in physical manufacturing infrastructure would be minimal compared to the other options.
VABills Posted September 27, 2004 Posted September 27, 2004 Some issues to consider i) Pro-Maintain close control of technology and production process, create American jobs which enhances image domestically, and potentially receive tax breaks. Con-Possibly higher labor costs, shipping and distribution costs, import taxes or penalties entering European market, market penetration costs. ii) Pro-Less startup costs working with existing manufacturer, possibly avoid taxes/penalties associated with imports, possibly take advantage of name recognition and market knowledge. Con-Less control over manufacturing process and quality, have to share technology, less productive workforce. iii) Pro-Maintain close control of technology and production process, possibly avoid taxes/penalties associated with imports. Con-Have to startup both manufacturing and marketing in new territory, may generate negative image in U.S. by creating new jobs overseas instead of domestically. Given the limited information, the best option would be ii, liscensing. You would be working with a company that is assumed knowledgable in the market, and if the venture didn't work out as planned the investment in physical manufacturing infrastructure would be minimal compared to the other options. 46708[/snapback] You forgot that costs will increase as you have to include profits for the manufacturer. True there isn't startup factory costs as in #3, but those costs can usually be offset by tax breaks and government contribution to build in a given local. Third party profits tend to really be a drain on long term profit margins. Of course you could invade the country take over control of their plants and it may potentially be cheaper.
TPS Posted September 27, 2004 Posted September 27, 2004 You're reminding me of why I didn't go back for my masters degree Sue. In this excercise, are you allowed to consider anywhere in the world as a place to manufacture the product? Or are you restricted to US vs. Western Europe? 46648[/snapback] You also need to consider exchange rate risk if you are going to manufacture in the US and primarily sell in Europe (part i).
njsue Posted September 27, 2004 Author Posted September 27, 2004 Thank you all for your help. I understand the material a little better.
erynthered Posted September 27, 2004 Posted September 27, 2004 Thank you all for your help. I understand the material a little better. 46907[/snapback] Did you ever think to ask your teacher for help?
stuckincincy Posted September 27, 2004 Posted September 27, 2004 Did you ever think to ask your teacher for help? 47192[/snapback] G*d help us. These people will get medical degrees...
Paco Posted September 27, 2004 Posted September 27, 2004 Just curious about something; when you get your degree, does everyone here get to put it on their resume?
_BiB_ Posted September 27, 2004 Posted September 27, 2004 Well, truth of the matter is that real life rarely resembles the classroom, so it's pretty well moot if someone elects to take a class that they don't even understand the questions in.
Paco Posted September 27, 2004 Posted September 27, 2004 I've always felt like is exactly like a classroom. Three quarters of the people have no idea what the hell is going on, the other fourth are convinced they're smarter than the person leading them...and half of those people are probably right.
erynthered Posted September 27, 2004 Posted September 27, 2004 Well, truth of the matter is that real life rarely resembles the classroom, so it's pretty well moot if someone elects to take a class that they don't even understand the questions in. 47209[/snapback] The steps it takes to find the answers is life experience. She needs to do the work herself. I'll agree that the class may be moot. BUT, if she gets a job that she has to research something on.......yada yada yada........
njsue Posted September 27, 2004 Author Posted September 27, 2004 You ask someone for help, but you get IGNORANT REMARKS. erynthered are you such a genius or a lazy highschool kid. :I starred in Brokeback Mountain: PACO. I know what you got your small education in being a totally IDIOT. Next time someone on this board asking for the help of another TBD'er STAY THE HELL AWAY. Thanks to you BIB for helping me understand it better.
_BiB_ Posted September 27, 2004 Posted September 27, 2004 You ask someone for help, but you get IGNORANT REMARKS. erynthered are you such a genius or a lazy highschool kid. :I starred in Brokeback Mountain: PACO. I know what you got your small education in being a totally IDIOT. Next time someone on this board asking for the help of another TBD'er STAY THE HELL AWAY. Thanks to you BIB for helping me understand it better. 47271[/snapback] Sue, if you follow my advice you run a good chance of getting indicted. That's why it's a good idea to do homework.
njsue Posted September 27, 2004 Author Posted September 27, 2004 There are something that are easy to me. There are some things that I could read 10 million times and still not get it. Oh they book makes my head spin. So I go to askjeeves.com to ask the ? and sometimes there is easier information about the subject.
erynthered Posted September 27, 2004 Posted September 27, 2004 You ask someone for help, but you get IGNORANT REMARKS. erynthered are you such a genius or a lazy highschool kid. :I starred in Brokeback Mountain: PACO. I know what you got your small education in being a totally IDIOT. Next time someone on this board asking for the help of another TBD'er STAY THE HELL AWAY. Thanks to you BIB for helping me understand it better. 47271[/snapback] So it's ignorant to tell you to do your own homework? Or to tell you to ask your teacher for help? Will the PPP board or the Wall be in the room with you when you take your final? Lighten up Sue.
njsue Posted September 27, 2004 Author Posted September 27, 2004 I thought I could ask some people on this board, whom I considered friends to help me out. But, guess I was wrong.
George Washington Posted May 20, 2005 Posted May 20, 2005 You are the international manager of a US business that has just developed a revolutionary new personal computer that can perform the same functions as IBM and Apple computers and their clones but costs only half as much to manufacture. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe. Your options are (i) to export from the United States, (ii) to license a European Firm to manufacture and market the computer in Europe and (iii) to set up a wholly owned subsidiary in Europe. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO. Thank you all for your help 45886[/snapback] I prepared an answer, but it takes up more space than is allowed on this board.
erynthered Posted May 20, 2005 Posted May 20, 2005 Sue, if you choose to go with production in Europe you should consider labor costs and access to EU. The Economist's country fact sheets are helpful: http://www.economist.com/countries/ 341436[/snapback] Did you notice her question was asked almost 9 months ago? She's probably flunked out by now, where have you been?
Reuben Gant Posted May 20, 2005 Posted May 20, 2005 Did you notice her question was asked almost 9 months ago? She's probably flunked out by now, where have you been? 341445[/snapback] Whoooaa!! she failed because you never helped her!!! Missed that.
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