You are the CEO of a chemical company that produces sulphuric acid, an acid that is used as an input in a wide variety of industrial products. The company has a good reputation in the U.S. and has started venturing out successfully into the international market by exporting to Asia and South America. The product is a commodity so there is intense competition on price. The product has a low value to weight ratio and trade barriers are moderate but there is an expectation that they will increase. A manufacturing plant costs about $20 million to build and requires a moderately skilled workforce. Your current plant can supply the U.S. market and some volume of export business but will need to be enlarged or supplemented by additional plant or plants in order to keep up with demand. The total value of the world market is expected to reach $20-30 billion. As the CEO, you must make some decisions-
a) Based on the above, which of the four basic strategies in international business do you think your company should pursue? Why would you make this choice to organize and align your company to this particular strategy?
b) Should your company follow a plan of concentrated manufacturing or decentralized manufacturing? Explain why.
c) What types of factors would you look for when you are deciding on a location or locations for the company's plant or plants?