Case Study: Riordan Manufacturing

Paper Summary:

This paper explains that, because Riordan is suffering from revenue erosion and a reduction in margins in its local U.S. market, it is seeking to expand into the Canadian market. The author points out that, as a U.S. company in Canada, the company can benefit from foreign exchange hedging strategies intended to repatriate funds across regions and markets, which is especially true of the North American Free Trade Agreement (NAFTA).The paper relates that one other potential trading bloc consideration for Riordan is possibly the Association of Southeast Nations (ASEAN) regional trading bloc by virtue of a Chinese operation. The paper concludes that association with NAFTA through additional location in Canada is the best trade association for Riordan.

Table of Contents:
Abstract
Overview
Trading Bloc Targets
Compliance Issues
Trade Transactions
Financing Organizations
Venture Capital
Joint Venture
Recommended Action

From the Paper:

"Until such antiquated protectionist policies are dismantled in the Canadian market, cultural integration between Riordan's Canadian operations and its U.S. headquarters will be more difficult than compliance with the actual regulations of NAFTA. NAFTA's trade structures are fairly well documented and the market advantages of operating in Canada provide Riordan with some benefits it cannot get by expanding in its home market. Additionally, should Riordan wish to expand in the future into Mexico, compliance with NAFTA regulations virtually assures it will have almost free market access to do so."

Sample of Sources Used:

• Flowers, E. B., Chen, T. P., & Shyu, J. P. (Eds.). (1999). Interlocking Global Business Systems: The Restructuring of Industries, Economies and Capital Markets. Westport, CT: Quorum Books.
• Fry, E. H., & Bybee, J. (2002). NAFTA 2002: A cost/benefit analysis for the United States, Canada, and Mexico. 1+.
• Golob, S. (2002). "North America beyond NAFTA? Sovereignty, Identity and Security in Canada-U.S. Relations." Canadian-American Public Policy, 1+.
• Jha, R. (2003). Macroeconomics for Developing Countries. London:
• Routledge. Kapstein, E. B. (1999). Distributing the gains: Justice and international trade. Journal of International Affairs, 52(2), p.533.

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