Reference no: EM131755975

Question: You decide to sell to the German company at 150 percent of your production costs. The German company is extremely satisfied with the quality of the Whatchamacallits it receives, and word spreads to its competitors.

Before you know it, you are flooded with orders from many companies in Germany, and throughout the European Union, more orders than you can supply with your existing plant capacity in Connecticut.

You consider different options.

(a) expand your Connecticut plant, doubling its capacity, and continue to export to the European Union;

(b) enter into a cooperative agreement with a European manufacturer to produce and ship Whatchamacallits to your European customers, and

(c) launch a branch of your company in Germany to serve the European Union market for Whatchamacallits.

Discuss the advantages and disadvantages of each option.