International expansion business venture Dissertation

To: Joaquin Armada, President of Caribbean Tile Company

From: Production and Warehouse Manager

Subject: Foreign expansion/production

Day: February 23, 2014

Mr. Armada,

Caribbean Tile Business has been working for over 20 years providing excellent and competitive products and rates in the development industry. A primary reason for this sort of success is the high demand for our products during the real estate boom and the competitive prices that our business was able to present. Today we could thankfully encountering another unforeseen demand for our products within an economy high are more corporations competing to get our business and providing similar high quality products to get lower prices. Our company has been forced to find alternatives to continue to supply the same top quality in our products and compete in offering the lowest prices in our industry. Therefore, it is that I suggest that our company consider expanding our production to Honduras, the place that the cost pertaining to labor is considerably less than our current cost here in the United States and doing so will offer us the chance to maximize revenue and improve the company's value. In commencing such opportunity, our company can undertake the other direct investment technique (FDI) in which we will sign up for one of Honduras' major ceramic tile producers, Leiva's Tiles Incorporation. and allow us to take part in the administration and expertise of the country's labor laws. Leiva's technological expertise within the manufacturing of the product can help us to enhance the effectiveness of our business growth and production. The benefit of the flexibility is directly associated the FDI technique because it gives production versatility that generates several bonuses for a organization that has geographically dispersed functions. The value of creation also increases due to switching the production processes between spots of two different countries (Tong & Reuer, 2007). In this particular case, increasing our...

Sources: Tong, T. W. & Reuer, T. J. (2007). Real alternatives in multinational corporations: organizational challenges and risk ramifications. Journal of International Organization Studies 32, 215-230



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