Transnational Corporations

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You are a consultant to a U.S. headquartered company. The company is suffering reduced profitability because of increasing domestic costs of production, and because its market share is declining. Price increases are not an option, since the competition is too intense - competitors have already moved some manufacturing capacity to maquiladora in Mexico, lowered their costs and reduced prices. Therefore, the company has asked you to research a Less Developed Country (LDC) to see whether investing there in a new manufacturing plant would be a good business decision, allowing the company to lower its overall production costs below those of the competition. [NOT Mexico, since that will only allow them to match their competitors' costs, not undercut them!] If you choose a real company for your paper, it must not already have a legal presence in the LDC you choose to research.

*This can be the company you work for, one you would like to work for, one in which you are interested in knowing more about, or one you 'made-up."

You have to present the results of your Transnational Corporations Research Paper to the company in two formats:

1. A report which outlines the investment options open to the company in a specific LDC, the 'incentives' offered by the country in question, legal and ethical issues of investing there, any financial risks, and your recommendations as to the form the company's investment should take;
2. A PowerPoint (or equivalent) presentation summarizing your findings and recommendations to the company.

You Need to Have:

1. A Written Report

Your 8 page (ca. 2,000 words) report NOT an essay for an English class!] should consist of:

• Ca. 400 words describing:

(a) The company, its products/services (150 words)
(b) A brief competitive analysis - why it needs to invest in new capacity off-shore (250 words)

• Ca. 1,600 words discussing:

1. Why you are choosing the particular LDC for your investment (showing that it is cheaper than Mexico);
2. The ease of investing in the chosen LDC, and any recent or new legislation that could change its investment climate;
3. Range of incentives being offered by the LDC government(s), national and local, to encourage FDI;
4. Any legal/ethical issues in the LDC relating to the proposed investment;
5. The financial risks to which the company will be exposed
6. How you propose the company should deal with these risk issues, in light of U.S. law (e.g. FCPA);
7. Your recommendations as to the kind of investment the company should make.

   All the above are to be presented from the standpoint of the decision-making process of the company - so cut out anything that is tangential to that process.

Also, this is not necessarily about offshore outsourcing - it could be new expansion that will increase the total production capacity of the company in a low-cost location, thus lowering its overall costs per unit produced and thereby improving its price competitiveness.

• Referencing style: APA format for Transnational Corporations Research Paper