Reference no: EM13586025

Following Coca-Cola's model, Ravi iand Keith want to standardize and centralize syrup production inthe U.S. for Zip-6 concentrate they will then ship to each bottling plant within each country. Zip-6management feels that this will be the best way to ensure consistency across different markets and better protect the firm's formulation.Accordingly, Zip-6 notified each government's trade authorities and received permissions from Korea and Mexico to import the syrup concentrate. To their surprise however, Brazil's Department of Foreign Trade (Carteira de Comércio Exterior--Cacex) has refused to approve the import of the concentrate, insisting that the ingredients available from Brazilian sources be used in the product that is sold within that country. An existing permission has allowed the importation of the herb ingredient. There exists within Brazil a difficult and time-consuming appeal process to the agency's ruling, within the Brazilian legal system.Ravi and Keith believe that centralizing this production would be in the best interests of Zip-6 but are hesitant to go forward without one of its biggest markets (Brazil). Based on your reading on pages204-220, respond to the following: Political Risk Factors according toHill,  refers to "The likelihood that political forces [or the government] will cause drastic changes in a country's business environment that will adversely affect goals of a business enterprise" . Checklist: Based on the political risk factor's definition above, what political risk factors to Zip-6 would be involved in adopting each of the following options: 1) appeal the decision, 2) treat Brazil as the central concentration site rather than the U.S., or 3) forget about adding in concentrateproduction to the existing operations in Brazil altogether. For each of the options above, how might each of these options affect them financially?