RSA Manufacturer is a U.S based company with the supposition of theirtotal assets of only $200 million. Suppose, thecompany produces a single type of product, roller blades. Due to the booming roller blade market in the United States at the time of thecompany's establishment, RSAhas been quite successful. For example, in its first year of operation, it reported anet income of $3.5 million. Recently,however, the demand for RSA's "Speedos," the company's primary product in the United States, has been slowly tapering off, and companyhas not been performing well. Last year, it reported a return on assets of only 7 percent. In response to the company's annual report for its most recent year of operations, Company' shareholders have been pressuring the company to improve its performance; its stock price has fallen from a high of $20 per share three years ago to $12 last year. Companyproduces high-quality roller blades and employs a unique production process, but the prices it charges are among the top 5 percent in the industry. In light of these circumstances, Steven, the company's chief financial officer (CFO), is contemplating his alternatives for company'sfuture. There are no other cost-cutting measures that companycan implement in the United States without affecting the quality of its product. Also, production of alternative products would require major modifications to the existing plant setup. Furthermore, and because of these limitations, expansion within the United States at this time seems pointless.Stevenis considering the following: If Companycannot penetrate the U.S. market further or reduce costs here, why not import some parts from overseas and/or expand the company's sales to foreign countries? Similar strategies have proved successful for numerous companies that expanded into Asia in recent years to increase their profit margins. The CFO's initial focus is on Thailand. Thailand has recently experienced weak economic conditions, and Companycould purchase components there at a low cost. Stevenis aware that many of company competitors have begun importing production components from Thailand. Not only would this companybe able to reduce costs by importing rubber and/or plastic from Thailand due to the low costs of these inputs, but it might alsobe able to augment weak U.S. sales by exporting to Thailand, an economy still in its infancy and just beginning to appreciate leisure products such as roller blades. While several of companycompetitors import components from Thailand, few are exporting to the country. Long-term decisions would also eventually have to be made; maybe companycould establish a subsidiary in Thailand and gradually shift its focus away from the United States if its U.S. sales do not rebound. Establishing a subsidiary in Thailand would also make sense for the companydue to its superior production process. Steven is reasonably sure that Thai firms could not duplicate the high-quality production process employed by Comapny. Furthermore, if the company's initial approach of exporting works well, establishing a subsidiary in Thailand would preserve company'ssales before Thai competitors are able to penetrate the Thai market. As a financial analyst for Company,you are assigned to analyze international opportunities and risk resultingfrom international business. Your initial assessment should focus on the barriers and opportunities that international trade may offer. Stevenhas never been involved in international business in any form and is unfamiliar with any constraints that may inhibit his plan to export to and import from a foreign country. Mr. Steven has presented you with a list of initial questions you should answer. 1. What are the AdvantagesRSAcould gain from importing from and/or exporting to a foreign country such as Thailand? 2. What are some of the disadvantages RSAcould face as a result of foreign trade in the short run? In the long run? 3. Which theories of international business described in