Ciao Manufacturing Location (Scenario)
An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility.
-Which of the following should be considered in the decision regarding where to build a new Ciao plant?
A) How many Ciao cars are sold in Italy and Spain each year?
B) What U.S. automakers are the biggest competitors of Ciao?
C) How politically stable are the governments of Russia and Canada?
D) How will Ciao managers handle the language barriers in foreign markets?

Question

Quizplus · Accepted Answer

Political stability is crucial for long-term investment decisions, as it affects the risk of doing business in a country.