Problem:
As part of its international expansion program, Acme, a U.S. multinational enterprise (MNE), is currently in the planning stages of establishing a greenfield(see text glossary for definition) production facility overseas. You have been asked to present a proposal to the steering committee comparing the advantages and disadvantages of starting operations in one of two selected foreign countries.
The steering committee has determined that one alternative must be a member of the European Union (EU) while the other cannot be a member of the EU. Subject to these conditions, choose any two foreign countries, except China, for comparison. Include, among other topics, a discussion of the different countries' currencies, trade policies, and cultural variables that may affect operations and profitability in each country. conclude with a recommendation and supporting rationale as to which country should be selected for the new facility.
Discuss:
Acme has been in acquisition talks with two different European firms. JEL Industries is headquartered in a country that is part of the European Union while DBC Industries is headquartered in a European country that does not belong to the Union and does not use the Euro as their primary currency.
Based only on the knowledge of whether or not the firm is located in a country within or outside of the European Union, recommend one of the organizations and explain why you selected that organization. Describe the implications of running a business in a country that is within or outside of the European Union.
Q1. Describe the advantages and disadvantages of the choice
Q2. Would your decision change if the company you acquired primarily sold its products within all countries in Europe? Why or why not?
Q3. Would your decision change if the company you acquired primarily exported its products to Far East nations and the United States? Why or why not?