Introduction
Charles Rivers Laboratory (CRL) that was founded in 1947 this corporation main business activity was the commercial production and supply of laboratory animal models for research and development of new pharmaceutical to biotechnological and medical companies (ALPES S.A., 2006). The company has been able to function as a profitable division because it has maintained and retained its market share in the supply of animal models to customers in over 15 countries worldwide. The senior vice president of corporate development Dennis Shaughnessy was to present a joint venture proposal to the board of directors to invest up to two million dollars in a small family owned company called ALPES that was the producer of state-of-the-art specific pathogen free (SFP) eggs in Mexico which can further help the company to achieve its long term strategic growth and also grow its existing businesses.
Key Issue
2.1 PESTEL
Political. Since the North American Free Trade Agreement allowed the free flow of goods and services in North America; it would have a positive effect on CRL and ALPES because the effect of political restriction can increase Mexico’s production in order to supply the U.S. and Canada. Meanwhile, ALPES will have more opportunity to gain more resources in other countries and also meet the increasing demand by increasing production. Economic. The joint venture is located in Mexico, where there is an uncertain and unstable market. The risk may influence the decision of the joint venture. In addition, although the industry has an excess demand of SPF eggs in the market, it would be affected by the economic slowdown. Social. Due to the industry mainly supporting research and development of pharmaceuticals and vaccines, there is a problem with pathogens carried by unvaccinated poultry because contaminated poultry increases human health risk (APLES S.A.,