Decision for taking Quattroporte Inc. Global Harvard Case Solution & Analysis

Decision for taking Quattroporte Inc. Global Case Solution

Introduction

It can be seen that in taking the company global in order to manage the increased international sales, the company is faced with a challenge of choosing an alternative from a variety of alternatives, which were offered by Merchant Account Provider. For setting up the subsidiary in England, the rates quoted by Merchant Provider for the processing of transaction were 1.75% to 2.25%. However, for the sales in other countries, the rates were 2.95% to 3.95%, which were very high. In addition to this, the company also has the opportunity to open a subsidiary in an offshore location, which includes British Virgin Island, Delaware (USA) or Isle of Man. These locations could provide various benefits for the overall growth of the company. After extensive analysis, some recommendation could be made.

Offshore Locations Profiles

British Virgin Island is a group of islands that consists of 40 islands, which were discovered by Columbus. The island is vastly considered as an attractive place for a large number of tourists. The overall population of the location is 31,912 and most of its citizens are mixed race. The official language of the island is English and the country deals in US dollar currency for its overall operations. It is considered as an offshore location for the reason that it could provide significant advantages for the companies to prosper right from its incorporation to the overall operations of the company very easily. It can be seen that the location is considered as a significant tax haven since its corporate taxation is nil and it does not require any filing of annual return as well.

Delaware (USA) is the least favorable option for companies to choose for going global. The total area of this location is 1982 square miles and stands at 49th position among the 50 states in United States. Despite of its small area, the location is highly recommended because of its tax benefits for non-residents. The location provides significant benefits for companies in terms of fast incorporation, reasonable cost associated with initial formation, and does not require any filing of accounts. The incorporation fee is approximately US$ 650 and the annual fees to be paid before 1st June is also the same.

Isle of Man is governed by Queen Elizabeth and is considered as an autonomous and an independent country. The total area of the location is 572 sq. miles (1481 sq. km). It comes under the membership of the British commonwealth but officially, it is not the part of United Kingdom. The official language of the location is English. The location follows the European Economic Area (EEA) guidelines because it is a certified member, but not a direct member of the EEA. There are no trade regulations such as any constraints or tariffs for member states of EEA. The Island is situated in the middle of British Isles, which lies in the middle of Irish Sea, between all of the four British Home Countries. This offshore location possesses its own currency called the Isle of Man Pounds and Pence.

Economy

British Virgin Island: In order to take Quattroporte Inc. global, the analysis of the economic factors is necessary to take into account in order to consider future economic growth. Since the location is highly attractive, the tourist industry generates significant portion of its income, which ultimately results in prosperous economy. Since its offering for the offshore companies in the year 1984, it can be seen that the acceptance level is huge because of number of benefits associated with this location. It can be seen that the financial sector of the location generates a significant amount of profits for the government to prosper and focus on other major investment projects. The outlook of the location in terms of benefits associated with off shoring is expected to increase to a new height, which could ultimately result in increased economic growth.........................

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