IBUS 211 Semester Project
You are an attorney (“in-house counsel”) for a U.S. based company ready to expand into the international market. Your company will be doing business in a country of your choice. It is your job as in-house counsel to advise the company on legal issues, strategy, and risk management.
Create your own company/product/service (i.e. licensing intellectual property rights to use technology your company has created, or investing in a logging operation in Brazil for use of raw materials in your luxury boat company). See examples below.
Decide what methods your company will use to penetrate the international market –
- trade (import/export)
- licensing/franchising (IPRs)
- foreign direct investment (joint venture, merger/acquisition, wholly owned subsidiary)
You must combine at least two methods (i.e. trade and foreign direct investment; licensing and trade; franchising and foreign direct investment).
You are a U.S. company that builds luxury boats. Your company merges with a Brazilian firm to open a logging operation (foreign direct investment) in Brazil, managed by Americans and staffed by Brazilians. You export the raw materials from Brazil to the United States for processing and manufacturing.
You are a U.S. company that owns a patented technology for building personal space rockets. Your company licenses your patent rights to a factory in Germany to manufacture the rockets. Once built, you import the rockets back into the United States for use.
Please use single spacing with a double space between paragraphs. 12 pt font. Follow the outline below to format your paper.
Written Portion (180 points total)
***********You must cite your sources.*******************
Section I. INTRODUCTION (5 points)
The type of business/product proposed and a brief description, including logistics (i.e. method of transportation for goods (sea or air), staffing of employees in a manufacturing plant overseas, whatever is applicable). A brief description of the country proposed for business, identification of major existing tariff/non-tariff barriers, and the conclusion and rationale for selecting each business entry method.
Section II. ANALYSIS OF THE INTERNATIONAL BUSINESS RISKS AND BENEFITS: Legal, Political, and Economic analysis of United States and proposed trading country (50 points)
- Describe and provide an analysis of domestic (United States) laws and regulations that will likely apply to your business activities (i.e. UCC, import/export regulations, labor laws, restrictions on licensing intellectual property rights, consumer safety standards, etc.) This should include a brief overview of major treaties that may apply to your business (i.e. UNCITRAL treaties (includes CISG and COGSA) WIPO Conventions, etc.).
- Describe and provide an analysis of your chosen country’s legal system (common law, civil law, theocratic). How will this affect your business activities?
- Describe and provide an overview of major laws and regulations in your chosen country that will likely apply to your business activities (i.e. consumer protection laws, tariffs/non-tariff barriers, health and safety regulations, intellectual property protection laws (if applicable), trade laws, WTO rules] This should include a brief overview of major treaties your chosen country is party to that may apply to your business activities.
- Describe and provide an analysis of logistical issues your company will face. Are you shipping goods overseas via ocean or air transport? What kind of insurance will your company require (marine/air cargo/etc.)? Are you purchasing a factory abroad? What kind of payment terms and/or insurance should you have?
- Analyze the risk of being sued in your chosen country. Describe your chosen country’s trade area and cultural, including important geographic and demographic information, important customs and traditions, other pertinent cultural information, competitive advantages and disadvantages for company negotiations
Section III. STRATEGY, CONTROL, MARKETING, AND CORPORATE SOCIAL RESPONSIBILITY (50 points)
- Explain the business entry strategies you have selected for your target country. Why did you chose this particular strategy over other methods? (i.e. minimize cost, expand production overseas to avoid tariffs, etc.)
- Draft a mission statement for your business. The statement should identify why your business exists and what it strives to accomplish.
- Describe the methods of marketing/promotion for your business/product you believe would be the most successful. This should take into account the type of product/service and the current political/legal/economic/cultural environment your target country is in. Explain your reasons for choosing the methods you chose.
- Create a promotional tool for your business/product. This should be based on your analysis from the section above. (i.e. online ad, Groupon, website, billboard, radio ad, newspaper print ad, etc etc etc). This is what you will use for your “pitch” to the class.
- What are ways you can ensure that your company fulfills its social responsibility? Form a proposal for how your business will respond to the following concerns:
- Public Transparency
- Community Involvement
Section IV. LEGAL AND BUSINESS RECOMMENDATIONS (Business Hat and Lawyer Hat) (25 points)
Comparative Legal/Business Analysis of the overall risks and benefits of doing business in your chosen country. Based on such risks, and your chosen country’s legal, political, and economic environment, make recommendations and provide an analysis of negotiation points for the company (i.e. importance of choice of law, forum clauses, cultural influences, dispute resolution, etc.)
Section V. CONCLUSION AND APPLICATION (50 points)
Draft a contract to minimize your company’s overall risk for one of the methods you chose to conduct business (for example, if you chose to license a patent and export the goods, you can draft either a licensing agreement or a trade/sales agreement. Or if you chose to build a factory in a foreign country and import raw materials for production, you can draft a business contract or a sales agreement). Remember to consider:
- definite terms (who? What? How much? How many? How long?)
- responsibilities of parties
- choice of law clause
- forum/venue clause – dispute resolution clause
- what constitutes a fundamental breach
- allocation of risk (risk of loss) – insurance, cost, freight
- remedies, how to calculate damages