Unlimited Trails Inc. Unlimited Trails Inc. (UTI) is a medium-sized public company located in Halifax, Nova Scotia. UTI was founded over 20 years ago by two friends. UTI's business plan was to use Canadian-made materials to manufacture a variety of Canadian-designed trail-running shoes with all the manufacturing done in Canada essentially an "all Canadian-made" running shoe. UTI became a success across Canada for several reasons. First, the "all Canadian-made" concept was embraced by Canadian consumers and in the last 10 years, UTI opened its own retail stores in all major Canadian cities. (UTI products continue to be sold in non-UTI retail stores across Canada.). Second, the unique design of the running shoes has proven to be a hit with the urban consumer, who purchases the shoes for the fashion statement they make. Since the demand from the urban consumer market was unexpected, UTI has still not incorporated this segment into its forecasts. About five years ago, a distributor approached UTI to purchase its products and sell them in the United States. Market surveys have concluded that while American consumers love the look and quality of the shoes, many of them refuse to buy products not made in the United States. Demand has been very erratic, and the distributor attributes this to how well the U.S. economy is doing at a particular point in time (for example, when there is good news about the U.S. economy, American consumers are more willing to purchase goods made outside of the United States). Sales projections for Canada are static, since the UTI brand has been around for over 20 years. Currently, UTI has two manufacturing plants, one located in Halifax and the other in Winnipeg, Manitoba. The Winnipeg plant was established about four years ago to meet the increased demands of the U.S. market and to service the stores in Western Canada. UTI chose Winnipeg for its second manufacturing plant, as it found a shoe-manufacturing plant that was closing its operations; thus, UTI managed to secure the plant at a bargain price. The main drawback was that this plant lacked a computerized inventory management system. Moreover, there is little coordination between the manufacturing activities of the Halifax and Winnipeg plants, often resulting in excessive stock of certain products in the Halifax plant and shortages of the same product in the Winnipeg plant, for example. While the UTI retail stores complain that their orders are not being filled in a timely manner, the plant managers complain that they have no current information on the inventory levels at the stores. Finally, due to the erratic demands of the U.S. market, many orders placed by the distributor had to go unfilled, since the Winnipeg plant did not have the products in stock. Extra staff was recently hired at the Winnipeg plant to address these inventory shortages.

In the past few months, the UTI senior management team has been examining the possibility of opening up a manufacturing plant in the Eastern United States in order to expand its presence in the United States, and to overcome the "all Canadian-made" challenge. By doing so, UTI would be able to appropriately label its running shoes as "assembled in the U.S.A." Market research indicates that this new label would likely increase sales at least threefold in the limited number of U.S. markets where UTI products are currently sold. As well, UTI's legal counsel has confirmed that this new labeling would meet all U.S. labeling requirements. After careful review, UTI's senior management and legal counsel also agreed that the best structure for establishing the U.S. manufacturing plant would be for UTI to incorporate a wholly owned U.S. subsidiary. You, a newly certified CPA, are UTI's controller overseeing the accounting, IT, and tax departments. In preparation for an upcoming board meeting, UTI's vice president of finance, Craig Thomas, has asked you to prepare a report addressing all the issues you see from your "controller's" perspective, including your overall opinion on the U.S. expansion being proposed (via risk assessment and SWOT analysis)

Please help me use a bullet point format to summarise the case issues shortly.