Problem:
A small Canadian firm that has developed a set of valuable new medical products using its own unique biotechnology know-how is trying to decide how best to serve the European Community market. Its choices are as follows:
1) Manufacture the product at home and let foreign sales agents handle marketing.
2) Manufacture the products at home but set up a wholly owned subsidiary in Europe to handle marketing.
3) Enter into an strategic alliance with a large European pharmaceutical firm. The product would be manufactured in Europe by a 50/50 joint venture, and then marketed by the European firm. The cost of investment in manufacturing facilities is a major one for the Canadian firm - but it is not outside of the firm's reach.
If these are the firm's only options, what option would you advise it to choose, and why?
Why would you advise it against the other options?