Question

4. A small Canadian company 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? 1.Manufacture the products at home and let foreign sales agents handle marketing. 2.Manufacture the products at home and set up a wholly owned subsidiary in Europe to handle marketing. 3.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. Your answer should be no less than 300 words.

Answer 1

Total word count is 322. Please leave a like, it really helps me. Thank you.

The small Canadian firm has developed new medical products and wants to enter the European market for marketing and selling the products.

I would advise the Canadian firm to enter into an alliance with a big European pharmaceutical firm and manufacture the product by the joint venture in Europe. Further, the products would also be marketed by the European firm itself.

The reason for choosing this option is it will prove to be beneficial for the Canadian firm. The firm will gain a new client base. Also, an alliance with a big pharmaceutical firm will improve the image of the firm. Customers will trust the brand because they will be aware of the association of the brand with the one that is already known to them. Further, the products will be marketed by the European firm so the Canadian firm will not have to dig deeper to gain an insight into local cultures and traditions for the marketing purpose.

The Canadian firm is not suggested to manufacture the medical products at home and give the responsibility of marketing to the foreign sales agent.

It is not a good option because when the firm will do so it will not have full control over the products once they are given to the foreign sales agent. The foreign sales agent can poorly treat customers and can damage the reputation of the firm.

The Canadian firm is also not advised to manufacture the medical products at home country and setting a wholly-owned subsidiary company in Europe for handling marketing.

This is so because setting up a wholly-owned subsidiary in Europe will be costly for the Canadian firm. It can be risky too because the firm will have to pay the expenses incurred in setting up the wholly-owned subsidiary and the expenses incurred in operating it. The firm alone will have to bear the entire losses in the case of the failure of its foreign operation.