- Review Merrill Lynch's 1997 reentry into the Japanese private client market (see the opening case for details). Pay close attention to the timing and scale of entry and the nature of the strategic commitments Merrill Lynch is making in Japan. What are the potential benefits associated with this strategy? What are the costs and risks? Do you think the trade-off between benefits and risks and costs makes sense? Why?
- Licensing proprietary technology to foreign competitors is the best way to give up a firm's competitive advantage. Discuss.
- What kinds of companies stand to gain the most from entering into strategic alliances with potential competitors? Why?
- Discuss how the need for control over foreign operations varies with firms' strategies and core competencies. What are the implications for the choice of entry mode?
- A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Community market. Its choices are:
- Manufacture the product 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 a strategic alliance with a large European pharmaceutical firm. The product would be manufactured in Europe by the 50/50 joint venture and marketed by the European firm.
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?
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