Business Opportunities in High Potential Developing Countries

Business Opportunities in High Potential Developing Countries

Summary

American Colonial Heritage (ACH), a US furniture manufacturing company has got an opportunity to put in a proposal to supply the US state government. If it grabs this opportunity, it would be the biggest of all its contracts so far. Since the US operations did not hold any potential to expand manufacturing, the international markets –China, India and Vietnam (Acquiring Quan Thanh Furniture or Greenfield option) are explored and the options of whether to expand or not ,are being evaluated.

Given the company’s concerns about quality, ethics, cost and future growth, it is recommended not to expand right now, however this should be a future course of action for the company.

Situation :

American Colonial Heritage (ACH) has got an opportunity to put in a proposal to supply the US state government. If it grabs this opportunity, it would be the biggest of all its contracts so far. Since the US operations did not hold any potential to expand their manufacturing facilities, the international markets –China, India and Vietnam are to be explored in order to grab the contract.

ACH is highly concerned about the high quality of products and ethical standards. Also cost, time and future growth, are areas of concern when planning to expand internationally. The fact that this opportunity has crop up before ACH is for the reason that the biggest furniture company of US, who won the $1 billion bid for this contract has been repeatedly late in delivering the products and the quality has also been declining. This again ensures that the quality and time are the areas of concern for the government as well.

As far as China is concerned, the Chinese government had been actively expanding industrial zones to support and expand production capacity and also it’s the largest furniture exporter to the US. However, US manufacturers had complained about dumping of products in the US market for...