Jose Miguel Vienes Ms.

Maria Felisa Calicdan

BSBA-311

10 Quiz 1 (3)

Questions: (5 items x 5 points)

1. 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
market are given below. 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?
a. Manufacture the products at home, and let foreign sales agents handle marketing
b. Manufacture the products at home and set up a wholly owned subsidiary in Europe to handle
marketing.
c. 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.

Answer:

If there were no significant barriers to exporting, then option (c) would seem unnecessarily risky
and expensive. After all, the transportation costs required to ship drugs are small relative to the
value of the product. In the options A and B, it will expose the firm to have a less risk of
technological loss and will allow the firm to maintain the stronger control on the quality and costs
of the medical products. The only other reason to consider the option C it would be an existing
pharmaceutical firm also give it better access to the market and to have potential access to its
products and technology, also it is the same firm would insist on the 50-50 manufacturing joint
venture rather than approving to be a foreign sales agent. The choice of A and B will get to a
question of which way can be the most effective in tackling the market. If the foreign sales agent
have found that is already quite familiar with the market and who will be agree to determinedly
market the products, so that the agent may able to increase the market share and more quickly
than a completely owned marketing subsidiary that will take time to get going. On the long run the
firm will have knowledge/learn a great deal more about the market and will likely earn greater
profits if sets up its own sales force.

2. Considering the pros and cons of entering into a strategic alliance, would you go for it? Why or
why not? What factors would you consider?

PLUS
It allows all parties to reach their goals faster
and much easier to meet your metrics or reach
your goals when the resources of 2+ companies
are working together instead of one company
going alone. People are loyal to the brands that
they trust. Customers are always looking for the
best value possible. The positive brand
awareness actions that one company takes will
reflect on all other alliance members. Global
alliances provide new insights and ideas into
existing product lines or service opportunities. A
MINUS
One of the biggest disadvantages that occurs
within a global strategic alliance is the
crossover of employees. The companies work
together to bring new products or services to a
specific market, it sometimes creates conflict
with regards to who has the rights over the
product, the production sites, or the patents and
trademarks which are involved. Within a global
strategic alliance, it is common to saddle one
company with a greater share of alliance
 global strategic alliance may include financial
assistance for all parties involved or just one.
Depending on the home nation of the
companies involved, regulations may permit
companies with a proven global strategic
alliance to avoid the controls which are involved
in importing or exporting goods. Companies
prefer a global strategic alliance because it
doesn’t change the formal structure of the
individual agencies involved. A global strategic
alliance helps companies broaden their
networking base of contacts throughout the
world.  is intended to last. When companies partner up
expenses than others. Not every company is
willing to step up and help others out when the
time comes either, which may leave one
company experiencing only benefits and the
other fighting to stay profitable. If an agreement
is ambiguous, then it leaves everyone to
interpret what the wording means when it
comes time to implement a strategy. That can
create difficulties in what each company
believes is applicable to them. It can even lead
to disagreements over how long the partnership
and there are clear differences in culture, it can
create clashes between the two which are
sometimes difficult to overcome. Even the best
partnerships today experience problems with
implementation if they are unable to coordinate
their services effectively.

INTERESTING

In entering to a strategic alliance, the company should know the pros and cons that might happen
and to monitor their services. Also, to plan what are the company’s goal and work to attain them.
And this will help them to get the customer’s satisfaction if they produce a good quality services
that offers, also to manufacture a high quality of medical products using a advance biotechnology
to research and implement the medical products to the public. Also, to utilize the opportunities to
strengthen the position in the market, and it will increase the sales if they work efficiently in
producing medical products. Gain new skills and use advance technology to develop a new
medical product. The company must gain greater knowledge of international customs and culture
also to enhance their image and reputation in the world marketplace.

Decision
In my decision the small Canadian firm should avoid the entering into the strategic alliance were they are
large European pharmaceutical firm which they necessary risky and too expensive just to produce the
product that would be manufactured to the Europe. They should choose the manufacture of the products
and let them work or handle to the marketing which it will be a less expensive and less risky when there is
a technological loss when producing and developing the products also, the firm must assure and control
the quality and costs of the medical products. The firm should decide of which it gives a better access to
the market and helps to access to the products and technology, and they should insist in the
manufacturing. Also, to choose of which is the effective in penetrating the market. At the end the firm will
gain knowledge and clear define them about the market are usually earn greater profits in setting up their
sales force.