Cheas's A.: A Joint Venture Proposal

Words: 2011
Pages: 9



Part One
1. Key Issue
Charles Rivers Laboratories (CRL) is evaluating a joint venture proposal that a Mexican company creates a state-of-the-art specific pathogen-free (SPF) egg for the vaccine. If the proposal is approved, CRL is going to invest 2 million dollars to the Mexican company. However, CRL must consider the potential risks of cooperation.

Part Two
2.Internal Analysis: VRINE ANALYSIS
Charles River Laboratories has a large variety of customers more than 15 countries, which means CRL is already capable to expand overseas market. The demand of SPF eggs is very high due to making flu vaccine. More than 100 million
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Furthermore, IDISA has a chance to make capital and compete in different area in the industry due to the 4 different companies that make profit in different research areas. As a result rivalry degree is comparatively (low).

4.2 Threat of Substitutes
ALPES has the largest market comparing by other competitors in the same field. Actually, mice are the only threat they use, but this threat is has not too much influence and not strongly effective. Also, because of the expensive if this area buyers try to find another options. So, substitutes within the industry are (low).

4.3 Threat of New Entrants
The threat of substitutes degree is from (medium to low) because of the difficulty of success they face due to the specialized in pharmaceuticals. But expertise in this area can find some of the facilities in less expensive areas easily. Furthermore, it is hard to the new entrant getting into industry because that needs a very high level requirement. SPF has a small market share in pharmaceutical and the lack of facilities prevent agriculture company supporting. ALPES has large market share because it is a provider to the two largest producer of vaccine.

4.4 Bargaining Power of Buyers:
Power of buyers is low. Supplier of eggs has option to increase the prices due to the highly demands one of this demand is