Dennis Shaughnessy is the senior vice-president for corporate development and Charles River Laboratories (CRL). He prepared a presentation to the company’s board of directors which request to invest up to $2 million in a Mexican joint venture (JV). They need to decide whether to do a joint venture between ALPES and CRL. Some other issues came out at the same time, Jim Foster, the CEO viewed the proposed joint venture as a potential distraction as his company continues to expand rapidly in the United States. Another issue Jim was worried about is that there are risks of investing in a country like Mexico which has an uncertainty market. Furthermore, he concerned about plan to partner with a small, family-owned company since it was not making new investment of their own but relied on CRL.
Internal Analysis
VRINE Model
Value
A joint venture with ALPES can be seen as highly valuable. Currently, on an international scale there is a high level of demand for SPF eggs. In fact, demand is actually exceeding supply and thus allowing the suppliers of SPF eggs charge a premium. Moreover, it is expected that this demand is sustainable and will actually increase over time. ALPES is a family run entity that places a high burden on trust and quality; they are currently the superior SPF egg producer in Mexico and Latin America further emphasizing their value.
Rare
This joint venture would prove to be quite rare in the essence that most manufactures of the influenza vaccine are currently not using SPF eggs. Rather they relied on a less expensive standard egg. On the other hand, what makes this venture rare is the relation between the two entities. Many firms have been reluctant to invest in Mexican business opportunities due to high political corruption, a weak currency, and the fact that economically Mexico has relied heavily on the tourism rather than exports. However, the North American Free Trade Agreement has been implemented to