39. (Production and marketing environment) When it comes to tortillas, Americans and Mexicans have distinctly different tastes. Americans are content to purchase mass-produced, prepackaged tortillas from their local grocery stores. Regional and national brands dominate sales. In Mexico, more than 95 percent of all tortillas are sold in little shops licensed by the government. These outlets, many grinding tortillas on hand-powered conveyor belts, are virtual monopolies in their neighborhoods, with a captive market that so far has resisted modern sales efforts.

Assume that you are involved in developing a strategy for your employer, a U.S. food company, to produce tortillas. You are considering competing in both the United States and Mexico. Write a brief report recommending how your company should produce and market tortillas in each country. Also, describe the product costing system that you would recommend for each country.

SOURCE: Adapted from Joel Millman, “Mexican Tortilla Firms Stage U.S. Bake-Off,” The Wall Street Journal (May 10, 1996), p. A6.