Question

You are the Director of Global Compliance for a U.S. company that just created a revolutionary new portable personal computer (PPC) that is half the size of a laptop, performs the same functions as existing laptop computers but costs only half as much to manufacture. Several patents were filed and approved protect the unique design of this computer. Your CEO asked you to formulate a recommendation for how to expand into South America. Evaluate the pros and cons if you were to set up a wholly owned subsidiary in South America.

Answer 1

Formulating and introducing new ideas and initiatives is one of the most important aspects in a business and without that it will be difficult for business to sustain and remain competitive in the environment. Once a new idea is successful the organization should also plan to implement the idea and carry it forward to different nations so that the product gets a global presence and while planning to invest in a different country there are some analysis, research and considerations that needs to be made which will give the organization and the product a better probability to succeed. In this case the advantages of setup up the business in south America are:

1. The level of competition is less.

2. Technology advancements are not at very high level on an average so introducing new products will help the business.

3. Majority of the countries do not have huge industries hence it will be easier to penetrate.

4. The organization will have huge exposure.

The disadvantages of the idea are:

1. The economy of most of the countries are not very healthy.

2. The organizations needs to have a proper plan in order to succeed or it will be difficult to handle various situations.

3. Attitude towards foreign organizations should be known and the organization should act accordingly to make the business a success.