Question 2: A small Canadian firm that has developed valuable new medical products using

its unique biotechnology know-how is trying to decide how best to serve the European Union

market. Its choices are given below. 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 firms only

options, which one would you advise it to choose? Why?

a. Manufacture the products at home, and let foreign sales agents handle marketing.

b. Manufacture the products at home, and set up a wholly owned subsidiary in Europe

to handle marketing.

c. Enter into an alliance with a large European pharmaceutical firm. The products

would be manufactured in Europe by the 5050 joint venture and marketed by the

European firm.