Assuming today was 1st January 2019. You are the chief financial officer of a US-based company which manufactures and distributes office supplies. As the competition in local market was getting stiffer despite the companys strong customer base, the Board of Directors (the Board) is considering for the company to expand its international business by penetrating to either the Canadian market or Mexican market through exporting. The company anticipates strong demand for office supplies in these two markets.

A) You are responsible for developing contingency plan as the selected market will impose trade barriers over time. The board is in favour of establishing a subsidiary in the country of concern under such conditions. Argue whether this plan is reasonable. Are there obvious reasons for the plan to fail?

B) Instead of the board proposal as described in (A) that is establishing a subsidiary in either of these two markets, the company may establish a subsidiary in both markets given its capacity to obtain sufficient sources of financing from the public. Argue whether this option is better than A)