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You are the Vice-President for International Development of a small U.S. pharmaceutical company (located in Emeryville, California) which specializes in the development of new medical vaccines using unique biotechnological know-how. Until now, the company has only achieved small successes in limited markets. Recently, however, the company developed a vaccine to protect humans against the MERS virus. According to the World Health Organization, this virus has already been identified in Europe and the Arabian peninsula, two areas where the need for a vaccine is urgent and immediate. The virus is not yet a major problem in South America, North America or Asia. The company has limited manufacturing capability; if the MERS virus reaches epidemic proportions in Europe and the Arabian peninsula, it will not have the capability to supply large enough quantities to meet demand. The company wants to determine the best way it should supply the markets where the virus is currently a problem and which entry mode or modes it should use. The possibilities are: a) Manufacture the product at home and export to the European markets and the Arabian peninsula b) License the formula out to a company already established in each of these two regions c) Enter into a strategic alliance with a large pharmaceutical company and establish a 50/50 joint venture company which would manufacture and market the product in these two regions) d) Establish wholly owned subsidiaries in the afflicted areas e) another alternative you might identify. As the Vice-President, you must make some strategic decisions:
a) Which entry mode or modes (entry strategy/strategies) would you follow in Europe and the Arabian peninsula?
b) Why would you choose this strategy or strategies instead of the other alternatives? Explain what the advantages are of the entry more or modes you are recommending and what the disadvantages of the other modes are.
c) What entry mode would you use in those regions where MERS is not yet a major threat and demand is not as urgent (South America, North America, Asia)? Why would you recommend this entry mode or modes?
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