1.

How does an intermediary such as MD International create value for the manufacturers
that use it to sell medical equipment in foreign markets? Why do they want to use MD
International rather than export directly themselves?

It is an advantage and creates value for the manufactures that use an intermediary such as MC
International because they are experts in their sector. They already have deep- knowledge of the
market, in this case of the Latin American market, since they work very closely with specialist in different
areas of medicine, so they understand the needs and what MD can do for them. Also, they are well
known as an intermediate which gives the company the position and the recognition so that
manufacturers trust them to do the transactions. Since they are a big business, is easier for them to
overcome barriers of entry. The problem for small manufacturers is that they can’t afford to sell directly
to the region because of the large marketing costs, a problem that MD can solve since they go into those
markets with a broad selection of products saving those costs using economies of scale, set up costs…
They also can sidestep intermediaries such as government rules and regulations as it is proven in
the text with the example of the shipment to Venezuela.

2.Why did MD International focus on Latin America? What are the benefits of this regional
approach? What are the potential drawbacks?

MD focuses on Latin America because, as mentioned before, the creator of the company had knowledge
on the market since he already had experience in. Also, Al Merritt saw a big opportunity because trade
barriers were not difficult to surpass since the Latin government was moving towards a more liberal
economic ideology. Also, as mentioned in the text, the local government realized the importance of
medicine and health care so they started investing and expanding their spending towards the medical
sector. So, some of the benefits is they know how to do business in this region, they can have access to
inside information and has the support of the U.S government in the Latin market. On the other hand,
the Latin market is very cyclical which means this is very sensitive to the business cycle and revenues are
high during periods of economic prosperity and expansion and are lower in periods of economic
downturn and contraction.

3. What would it take for MD International to start exporting to other regions such as Asia or
Europe? Given this, would you advise Al Merritt to continue his regional focus going forward
or to add other regions?

First of all, realize that the European or Asian market is not the same than the Latin market which
means MD would have to understand and acknowledge the characteristics, particularities and the
needs of the local market. This means they might need to study different portfolio of products and
see which is most adequate to each market. Overcome some differences as the culture and language is
also really important.
4.How important has government assistance been to MD International? Do you think helping
firms such as MD International represents good use of taxpayer money?
• Very Important!
• MD is leaning heavily on export assistance from the US
• US export assistance provides important applications to prevent problems at the border
• Helped MD through their financing through the Export-Import Bank
Good use of taxpayer money?
• Yes it does!
• Helping people in need
• Important after sales service
Creates more jobs in the US.