Essay on "International Markets the Introduction of the CAD"

Essay 3 pages (1085 words) Sources: 3

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International Markets

The introduction of the CAD system for weaving in Pakistan from Singapore could assume three modes of business entry into the new market. The first option would be to export to Pakistan from the manufacturing plant in Singapore. This would meet challenges like the importation taxes and duties that will be leveled against the products. There would be again the problem of promotion and marketing the product in general as they would be viewed as foreign items by the locals hence those who are very particular about homegrown products will reject these as importations. There would also be the bulky cost of transportation since the importation will be in bulk as well hence may push the prices of these products up. This importation would however cut on the cost of setting up a new manufacturing firm in Pakistan and would not demand new expertise as the Singapore firm already has them.

The second option would be to license a Pakistani firm to manufacture and market the computer system in Pakistan and elsewhere. This is also referred to as franchising. This would have various challenges as well as the licensed company can end up using the technology to their own advantage hence Ms. Chang making massive losses on the brilliant technology they invented. The other challenge is that the management of the products will be largely controlled by the franchiser which may differ from the management style that the mother company in Singapore would have liked to see being used. The advantages are that the mother company shall have been spared the pains of setting up a new manufacturing firm. There would also be no hefty taxes that are faced by the mother company unlike the

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importation scenario.

The third option would be to set up a wholly owned subsidiary in Pakistan. This would come amidst vast challenges like the cost of setting up may be too exorbitant to be supported by the market size that exists there. The setting up of a firm could also prove expensive and time consuming such that the return on investment may take time to be realized, to the worst is that the technology may be copied and executed by another firm before they are fully functional hence denying the chance to enjoy the profits in an autonomous manner. The positives of having such an arrangement are that it would see the mother company expand its operations to Pakistan and cover the surrounding countries as well. It would be saved from the taxation will also be overcome and it would make management autonomous hence more effective than if the mother company has to do the management in the franchises in Pakistan.

The best option that Ms. Chang could go by in order to immediately start the investment in Pakistan is to license a Pakistani firm to manufacture and market the computer system in Pakistan. This is bearing several factors that would make it more viable for the Singapore Company to enter the Pakistan market more easily than the other two options.

Pakistan is a member of the WTO and as well as signatory to the Trade Related Aspects of Intellectual Property Rights ("TRIPs"). Meaning there is proper patent protection in Pakistan (Khursheed Khan & Associates,… READ MORE

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Quoted Instructions for "International Markets the Introduction of the CAD" Assignment:

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While traveling to Thailand on a vacation, you meet Ms. Jenny Chang, an Asian business executive, in the plane. She is happy to learn that you are the international business development consultant for a multinational company. She becomes interested in your expertise and asks you to work as her company*****'s consultant for a project involving new business development in Pakistan. Her company has just invented a revolutionary new CAD system for designing and weaving wool carpets that can improve the design and manufacturing productivity significantly. Several patents protect the unique design of this technological system. The CEO has asked you to formulate a recommendation for how to expand into Pakistan. Your choices are (i) to export to Pakistan from the manufacturing plant in Singapore, (ii) to license a Pakistani firm to manufacture and market the computer system in Pakistan and elsewhere, and (iii) to set up a wholly owned subsidiary in Pakistan.

Select the best of the three choices for Ms. Chang. Support your recommendation by first evaluating the pros and cons of each alternative for Chang*****'s company.

This assignment is analytical in nature. You are expected to demonstrate your ability to convert your theoretical understanding of the modes of international business entry into practical applications. Therefore, I would hope that you will relate all of your answers to the situation in the case or the scene presented and not provide generic text book answers.

Some factors that must be kept in mind to analyze the situation and make your recommendations look practical to your client. As a consultant, you can make some assumptions about the different aspects, such as:

1. What is the nature of the product: brand new high technology consisting of a computerized CAD system. The CAD system that this company wants to promote in Pakistan consists of two major parts: the hardware which is a sophisticated weaving machine, and the software that designs the carpets and runs the weaving machine. How important is it to protect patents and the technology from being copied illegally? How important is the firm*****'s intellectual property? How do transportation costs affect your decision?

2. Where is it being manufactured now: Singapore. What is the level of manufacturing sophistication in this country when compared with the target country?

3. What is the nature of the target market: What are the relative business barriers in the two countries? Demand? Economic development? Legal system for resolving disputes?

Patent protection laws or enforcement of the law? Availability of skilled engineers and workers? Availability of suitable agents or partners?

The consideration of the above factors will allow you to produce an excellent report for Ms. Chang.

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“International Markets the Introduction of the CAD.” A1-TermPaper.com, 2011, https://www.a1-termpaper.com/topics/essay/international-markets-introduction/7427934. Accessed 4 Oct 2024.

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