Imagine that you and your fellow MBA students in this class are a team of consultants hired by a company for the purposes of recommending a potential international strategy for a U.S. company. In the discussion forum, you will be discussing options for the client, "ABC Cabinet Company."
ABC Cabinet Company is a kitchen cabinet maker. The company makes semi-custom cabinets in their current factory in the U.S., then ships the cabinets directly to their customers' homes. The customers then install the cabinets themselves or hire a contractor for the installation. Most of their customers have been in the U.S., but the company has shipped cabinets to countries outside of the U.S. Demand in the new home sales market for your client's quality-made cabinets has been increasing, both in the U.S. and in other countries, particularly in parts of Central and South America, for example in Costa Rica and Colombia. The cabinet making process is labor-intensive and demand is quickly outpacing supply from their U.S.-based factory. The CEO is considering opening a new factory in a Central or South American country rather than expanding domestically.
Use the following questions to guide your discussion:
1. What is the main reason the company should decide to expand outside its domestic market?
2. Which option(s) should the company choose for entering into the international market? Why?
3. Should the company use a multidomestic, global, or transnational approach? Why?