1.

A small Canadian firm that has developed Valuable new medical products using its unique
biotechnology know-how is trying to decide how best to serve the European Union 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?
a. Manufacture the products at home, and let foreign sales agents handle marketing.
b. Manufacture the products at home, and set up a wholly-owned subsidiary in Europe
to handle marketing.
c. Enter into an alliance with a large European pharmaceutical firm. The products would be
manufactured in Europe by the 50–50 joint venture and marketed by the European firm.

 I choose B, I manufacture the product in the United States and market it through a completely
owned subsidiary in Europe. Option B should be considered when a company needs to seek
out foreign trade prospects and collaborate with other companies. Furthermore, the company
does not need to hire an outside expert to do this.

2. Considering the pros and cons of entering into a strategic alliance, would you go for it? Why or
why not? What factors would you consider?

Plus Minus
 It can create a clash of cultures
 It gives you access to positive brand
awareness  It may stick one company with most
of the expenses
 It’s allowing all parties to reach their
goals faster  It may encourage good employees to
 It can improve the quality of individual cross over
products
 It can create conflicts in ownership
 It expands your customer base
claims
 It gives you access to greater levels of
 It can lead to discrepancies of
innovation
interpretation

Interesting
The intriguing thing about strategic alliances is that they allow a company to expand into a new
market, better their product line, or establish a competitive advantage over their competitors,
and help the firm to fulfill its goals, which will benefit the company.

DECISION
I choose plus because it helps company improvement and develop efficient and effective
process in the company. And the company will gain entry to a new industry and the company will share
the risk and cost of the major development project and other plan of company.