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You are the international manager of a U.S. business that has just developed a revolutionary new...

You are the international manager of a U.S. business that has just developed a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design of this computer. Your CEO has asked you to formulate a recommendation for how to expand into western Europe. Your options are (a) to export from the United States, (b) to license a European firm to manufacture and market the computer in Europe, or (c) to set up a wholly owned subsidiary in Europe. Evaluate the pros and cons of each alternative, and suggest a course of action to your CEO.

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AnsbeY Civenthat (a) єх poting pros include the abiity tous e existing manu fackin Fac ilities and job For the nal-ive country. con include reluct ion OF pYofit margins due bvansportation costs and the Cost of tvade barr iers L-ICehsing P clude rot hauing to Spend tie. eor and mone creating o subsidary and not hauing to pay For transporbton. 工n addition trade barriers are bypassed. s ctude the loss of the technologicl advantage after the patent eypire and ot hain direct contval over the icensees actions c) setting up sulsidiary pros include not having bo pay for tvansportation, ơveromingtadebarriers, having direct contva,and not having to Fear the dicf usion of competitivc advantoge to possible Future compe litors Cons include having to spend the bime 、moneyl and eFfor t of seting up the su bsidiary

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