Question

Suppose you are a U.S. firm that produces consumer goods. Briefly describe one pro and one con of establishing a subsidiary in Africa.

Answer 1

1) one Pro of setting up business or subsidiary in South Africa is that you can always get to escape The tariffs set by the government of South Africa because you are actually producing the goods inside South Africa so that tariffs will not be applicable and this result in lowering the prices on the whole

2) one con of setting up of business in South Africa is that it can incur huge cost rather than exporting and if there is a political instability the chances of failing would be high as a result of which the cost might not be recovered or another words the risk is high