THE IMPACT OF GALAWI'S DEVELOPMENT POLICY

THE IMPACT OF GALAWI'S DEVELOPMENT POLICY

Armando Suarez, CEO of Industrias Globales, and Pedro Garcia, the firm's director of international operations, are discussing a statement made today by the secretary of the treasury in Galawi.

Suarez: Pedro, did you listen to the secretary's comments today about the proposed change in development strategy?

Garcia: Yes, I did, and I'm concerned. We have spent considerable time and money planning our entry into the Galawi market, and if the government proceeds with the new economic strategy, we've got to change our plant design, plan to produce different product lines, and completely change our marketing plans.

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Suarez: This apparently is more serious than I thought. How can a change in their development strategy from import substitution to export promotion affect us?

Garcia: Hang on to your chair, Chief, and I'll explain each strategy and how the change will affect our entire start-up program in Galawi. Oh, and by the way, our Galawi competitors are going to have to make changes, too.

Questions

Imagine you are Pedro Garcia.

1. Describe the two strategies for the CEO.

2. Explain how the change in development strategy will affect the firm in many ways.

3. What changes in its entry plans will the firm have to make?