17-1 Global Expansion You’re the manager of global opportunities for a U. manufacturer, who is considering expanding sales into Europe.

17-1 Global ExpansionYou’re the manager of global opportunities for a U.S. manufacturer, who is considering expandingsales into Europe. Your market research has identified three potential market opportunities:England, France, and Germany. If you enter the English market, you have a 0.5 chance of bigsuccess (selling 100,000 units at a per-unit profit of $8), a 0.3 chance of moderate success (selling60,000 units at a per-unit profit of $6), and a 0.2 chance of failure (selling nothing). If you enterthe French market, you have a 0.4 chance of big success (selling 120,000 units at a per-unit profitof $9), a 0.4 chance of moderate success (selling 50,000 units at a per-unit profit of $6), and a 0.2chance of failure (selling nothing). If you enter the German market, you have a 0.2 chance ofhuge success (selling 150,000 units at a per-unit profit of $10), a 0.5 chance of moderate success(selling 70,000 units at a per-unit profit of $6), and a 0.3 chance of failure (selling nothing). If youcan enter only one market, and the cost of entering the market (regardless of which market youselect) is $250,000, should you enter one of the European markets? If so, which one? If you enter,what is your expected profit?

Join the Conversation

2 Comments

Leave a comment

Your email address will not be published.