Alpes Case

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Group Case
ALPES S.A.: A Joint Proposal

Table of Contents

Topic Page Problem Identification 1 External Analysis 1 Internal Analysis 3 Financial Analysis 5 Alternatives 5 Decision Criteria 6 Evaluation of Alternatives 6 Recommendation 6 Action Plan 7 Contingency Plan 7 Appendix 8

Key Problem Identification: The main issue in this case surrounds Dennis Shaughnessy, senior vice-president for Corporate Development and general counsel for Charles River Laboratories (CRL), and the CRL board of directors and CEO Jim Foster. Shaughnesssy has proposed that CRL undertake a $2,000,000 joint venture project with the Mexican-based company ALPES in the development of a new SPAFAS facility, which quantitatively appears to
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In this case, we do not think there are any other industries that could meet the unique product demand of this industry. This means that the threat to substitutes is very low.

Summary of Porter’s 5-Forces:
Porters’ five forces analysis provides important knowledge to Dennis Shaughnessy about the external environment of following the joint venture. The provided external analysis should be used when recommending the joint venture to the CEO and board of directors.

PESTEL Analysis
PESTEL analysis is widely used to better understand the external environment of the company. The acronym PESTEL stands for political, economic, sociocultural, technological, environmental, and legal factors. PESTEL analysis helps managers better understand the threats and opportunities a company faces.

Political: The free trade agreement (NAFTA) was created to eliminate trade barriers and supplement the growth of companies in North America. This is very beneficial to a US company like CRL when agreeing to invest in a neighboring country like Mexico. CRL must also pay attention to the working standards of Mexico. The US Department of Agriculture estimated four million illnesses and 3,000 deaths each year due to contamination of poultry. Working conditions in Mexico plants are unacceptable to the US standards, therefore CRL must be careful in joining hands with ALPES, unless they make significant changes in working conditions.

Economic: Limited information was provided about
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