You are an adviser to a multinational company in the textile industry. The company’s business model relies on
manufacturing inexpensive pants and shirts that they sell in the United States and Canada. The manufacturing
plant is located in Nicaragua and exports the clothes to various cities throughout both countries. The company
has been doing very well in North America and has decided to expand into the southern part of South America
or western Europe. More specifically, in South America and Europe, they are looking for options for setting up a
manufacturing facility in Argentina, Chile, and Brazil. In Europe they are considering France, Germany and
Belgium. They will set up the plant in the country and export to the other countries. For example, if the
company selects Brazil for its manufacturing facility, it will sell the products in Brazil and export it to distributors
and retailers in Argentina and Chile. If you select western Europe, please identify the country in which the
manufacturing facility will be located and the two other countries to whom the products will be exported. For
example, if you select western Europe as your region and France as the host country for the manufacturing
facility, the company will export its clothes to Belgium and Germany.
Step 1: Should the company pick Western Europe or South America for its expansion?
Step 2: Having decided which region to which they will expand, please select the specific country within the
region where they should establish manufacturing facilities. Here are some questions to ask and answer.
As a consultant to the management department, please assess the risk of setting up a facility in these three
countries.
What are the economic upsides of investing in certain countries and exporting to others?
Step 3: Having selected the specific country for establishing a manufacturing facility, what can you recommend
about the culture of doing business in the host country?