Acme Inc. Company
The company concentrates on the sales of pajama. The United States branch boycotted Cuban suppliers and products due to the political differences prevalent between the two countries. This has affected the trade between these nations to an extent where the American companies turn down Cuban supplier’s offers. Due to the heightened rivalry, the United States based Acme Inc. Company persuaded the Canadian Acme to cut off its relations with Cuban traders as well as their products. Implementing this directive would be against trade agreements set between Canada and Cuba. Therefore, the Canadian company outsourced its pajamas from Cuba. There are decisions and plans that need to be carried out by the two institutions.
Acme U.S should engage in the following initiatives. First, develop policies that will discourage affiliated entities from establishing business deal with the Cuban companies. This policy will govern all subsidiaries in conducting businesses activities. Second, limit outsourcing to only the approved dealers/suppliers to ensure that the branches manufacture pajamas locally. Subsidiaries will become independent. Thus, government decisions to impose trade barriers on imported items will not affect the business. The reason the Canadian firm delegated its manufacturing duties is to reduce the cost involved in these activities. However, this had some effects on the quality of pajamas sold by the company. Lastly, the organizations can manufacture the goods and distribute to individual outlets. The move eliminates intermediaries. This increases the efficiency and effectiveness of the distribution channel (Gooch, 2011).
Acme Canada, on the other hand, is coupled with numerous decisions to make in regards to business transactions. First, the Canadian government is keen on promoting trade between its companies and citizens with the Cuban traders. Thus, boycotting the Cuban traders or goods will cause the company serious problems with the government. The only way out of this mess is to initiate internal processing programs that will reduce overreliance on imported pajamas. Eventually, the entity will demand less from companies abroad. Mastering the art of production reduces the operation costs. Import business comes in with added costs, such as import duties and administration/transportation costs. If products can be manufactured locally, the company is deemed to benefit from the endeavor. Second, complies with government directives to trade with foreign nations, such as Cuba. Adopting the United States decision to pull out all the Cuban brands from their shelves will negatively affect their financial status as well as market share. In cases where the supply of these products is cut, the consumers will move to competing businesses. Therefore, this organization will experience low traffic into its premises. However, proper plans should be implemented to reduce the amount of goods outsourced. Eventually, Acme Canada will be able to introduce its own brands into the market and substitute the Cuban brand dominating the market. These are the strategies to implement to avert the ordeal (In Jacques & In Kepos, 2012).
In conclusion, business strategies should be free from political influence. This is because the market of products depends on the forces of demand and supply. However, political factors that affect business environment should be considered in the decision making process. Political factors ensure that the business comply with the country’s law. Failures to honor the countries directive create a harsh environment for business operations
Gooch, J. W. (2011). Acme. Encyclopedic Dictionary of Polymers, 22(3), 871-871. doi:10.1007/978-1-4419-6247-8_13040
In Jacques, D., & In Kepos, P. (2012). International directory of company histories: Volume 132 (3rd ed.). Detroit, MI: St. James Press.