International Business Planning:

Entering the Chinese market

COMMODITY
PRODUCTION WITH
CURRENCY
CONVERSION PLAN.

A specialty commodity firm saw an opportunity to set up a joint venture with the People’s Republic of China. The company knew how it wanted to approach this opportunity but didn’t have staff with the expertise or time to develop a business plan and proposal for the Chinese.

Given the newness of these possible relationships, senior management and Ms. Cassidy spoke at length and decided to use cost information from rural Mexico as a surrogate for processing costs in China. We proposed a sister-company relationship, one of which would manufacture product and the other would market and distribute the commodity, thereby creating a currency conversion mechanism as the Chinese Renminbi was not then readily traded. We conducted market research about the world supplies of product and guided the company through its negotiations.