International business of ABC pharmaceutical firm.

1. Introduction.

ABC pharmaceutic starchy is a small Asian warm in China; the firm has its own factory which cc workers factory. The company currently developed some valuable tender medical point of intersections using its unique biotechnology expertness. The top managers of the firm want to expend the commercialise and decide how to best run the European Community market. The company has ternion options:

a. Manufacture the proceeds at floor and let foreign agents distribute and deceive the product in the European market;

b. Manufacture the product at home and set up a exclusively owned subsidiary in Europe;

c. Enter into a strategic alliance, that is a joint-venture with a large European pharmaceutical firm. The product would be manufactured in Europe by the 50/50 joint venture and distributed and marketed by the European firm.

Ultimately, they decided the first option, manufacture the product at home and let foreign agents distribute and sell the product in the European market.

As a new expansion company, doing exporting is lite and save cost. Furthermore the company manufacture the product at home can protect its unique biotechnology expertise and using European distributor can enter the market rapidly, save time and cost to build up exclusively owned subsidiary.

2.



Advantage and disadvantages of three entry modes

The above options be the three entry modes, below list out advantages and disadvantages of three entry modes:

Advantages/ Disadvantages

Exporting:

* It avoids the often-substantial costs of establishing manufacturing operations in the host country

* It whitethorn help a firm achieve experience curved shape and location economies

* It may realize substantial scale of economies from its world(a) sales volume

* When there are lower-cost locations for manufacturing the product abroad

* High acid costs

* Tariff barriers

* The local agent also doing business to another(prenominal) company

* The local...

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