An English biotechnology company that has developed some valuable new medical products using its unique biotechnology know-how is trying to determine how to best serve the South-East Asian market. Its choices are:
To manufacture the products at home and let foreign sales agents handle marketing.
To manufacture the products at home and set up a wholly-owned subsidiary in South-East Asia to handle marketing.
To enter into an alliance with a South-East Asian biotechnology firm. The products would be manufactured in South-East Asia by the 50/50 joint venture and marketed by the South-East Asian firm.
Investing in manufacturing facilities will be a major cost for the English company but it is not outside its reach. Supposing these are the English company’s only options, which one would you advise it to choose? Why? Make sure to explain why you reject the other options.