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Ab 220 Unit 8 Assignment

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AB 220 Unit 8 Assignment

Unit 8 Assignment
Name
AB220: Global Business
Professor
Kaplan University
8/5/14

Unit 8 Assignment

Zip-6 has a 7 year presence in Korea. They are now presented with some options to continue to play a role in this market. They can acquire the current firm that produces their product, repurchase their licensing agreement and sell it to another firm, or exporting the product to Korea. If Zip-6 acquires the Chang Dow Trading Company from Lotse Tsangsung, they will also gain some of the expertise that already exists at that firm. The current employees and management of the Chang Dow are familiar with the expectations of the Zip-6 product and the Korean market. There will be almost no training or equipment costs involved in this option. The Chang Dow may also present additional opportunities within the Korean market. The disadvantages to acquiring the Chang Dow are that Zip-6 will have to learn or hire a Korean expert to help ease the transition and communication between both firms. The cultural and language barriers will have to be overcome for this venture to be successful. Zip-6 will also have to learn the Korean market, and labor laws to ensure that everything can continue to run smoothly. Zip-6 can also buy their licensing agreement back and open their own plant in Korea. This will include a much higher start up and equipment cost that purchasing the Chang Dow. It will however give them their own presence in Korea, and not being tied to the reputation of another firm. If they decided to sell their licensing agreement to another firm, they would have to start all over in training and communication to get their product back into the market. There would also be conversion costs. It is my recommendation to acquire the Chang Dow as there are many resources that are already present there. There will be more advantages to

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