In the occasion that the Zip 6 management decides to appeal the decision, the company has to be ready to face some political risk factors. The likelihood of political forces causing drastic changes in a country’s business environment will, in turn adversely affect the goals of a business enterprise (Hill, 2011). The company stands to face a long and time-consuming process during the lawsuit. It might also prove to be a costly exercise that will incur enormous expenses. Moreover, this might also cause political implications between the two involved governments. At the same time, it is crucial to focus on the long term interests within the country. The company should not let this appeal prevent any long-term interests and future endeavors that they might have with the country.
If the company decides to treat Brazil as the central concentration area instead of the United States, certain factors will also arise. The company will end up spending a lot of money, which was not initially planned for in setting up a new concentration site in Brazil. Accordingly, the initial company’s goals would be adversely affected. This move is also likely to result to negative political consequences between the United States and Brazil after the concentration site has been moved. It could also lead to other governments’ trade authorities banning the importation of the syrup and demanding the same thing with Brazil.
Lastly, if the company decides to forget about adding the concentrate production to the existing operations in Brazil altogether, it would also affect the company negatively. The projected profit margins set by the company would not be met since they would have lost one of their largest markets. The existing businesses in the country would be at a risk since the attitude towards the products would change. Whatever option the company chooses, it will still affect it financially because there will be losses or large expenses incurred.
Hill, C. W. L. (2011). Global business today. New York: McGraw-Hill/Irwin.