Global Business Today 8th Edition by Charles Hill

Exercise 2

A small Canadian firm 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 here. 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?
• Manufacture the products at home and let foreign sales agents handle marketing.
• Manufacture the products at home and set up a wholly owned subsidiary in Europe to handle marketing.
• 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.