U.S. Auto – Problem Solution Paper
In many industries, cross border alliances have had a immense impact and direct correlation in dealing with expanding and increasing success and profitability. Because of inflated labor cost’s many companies who develop new products, build relationships and negotiate deals with foreign countries to manufacture products by low wage workers in assembly locations. This decrease’s overhead cost. These channels open doorways for these companies to gain access into foreign markets, facilitating rapid product distribution in those countries.
USAuto a fictitious car manufacturing company is struggling to keep pace with foreign car producers. There plant assets are outdated and labor costs are putting a huge damper on profitability. With obligations to its employees and stockholders, USAuto must remain competitive in the automobile industry and increase profits. The company has put research and developmental funds into producing and delivering a hybrid gas-electric engine. With this new technology USAuto plans to expand into Central and South America. In an attempt to meet these requirements the company enters into negotiations with AutoMex, a company that markets U.S. new and used automobiles in Central and South America. This partnership not only helps the distribution of the hopeful frontrunner but also helps overhead costs by using AutoMex’s low wage workers to assemble the remainder of the automobile parts. During the negotiation process many mistakes were made and the agreement was unsuccessful. In order for USAuto to move forward it must develop the skills and culture required for successful negotiations. In this text, I will describe what happened in the discussion between both party’s goals and issues. Giving solutions and explanations as to how things should have been handled with certain problems (University of Phoenix, 2009).
USAuto’s goals were to distribute the vehicle into Central and South America,...