Question

You are the President of a medium-sized manufacturing firm in the Midwest, making specialized parts for urban transportation systems. You have established a profitable subsidiary in Bosnia. Approximately 20% of your sales and 35% of your profits are generated by this operation. Now, you see the possibility that Bosnia may be integrated into the EU

What opportunities present themselves to you if this integration takes place? What threats will you face if this occurs? What should you do, as the head of your company, to respond to this proposed integration?

Answer 1

(i) Opportunities the company will have-

1. The company will have the opportunities of expansion and growth after the mergence with the EU.

2. It can reap the benefit of the increase in demand as after integration with EU, the company may have easy access to the various locations and countries of the continent.

(ii) As every decision comes with threats and opportunities, there can be threats which come along with the integration-

There is a possibility of stringent government policies which can adversely affect the production of the firm. For example- EU government plans to import the specialized parts because of the availability of cheap raw materials in other countries/continents.

(iii) As the President, my decision will depend upon the policies of the integration. The decision regarding future prospects lie with the mergence and its key parameters/aspects decided by the legislature and its execution.