Puerto Rico Case Study

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Puerto Rico is an island nation in the Caribbean Sea and the largest insular territory of The United States. As a territory of the U.S., Puerto Rico has many advantages for trade with the mainland while also posing complex challenges. As a territory of the United States, shipments between the two nations are free of import duties. The island has few natural resources and imports virtually all the raw material need to supports its manufacturing industry. In 2014, RB imported 186.7 tons of sugar and suga- based products (U.S. Trade With Puerto Rico and U.S. Possessions, 2014).
“CK Products is a wholesale distributor and manufacturer for the cake decorating, candy making, wedding cake, and kitchen supply industries. In addition to offering
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This and subsequent papers will explore the opportunities and challenges of expanding CK Products market in Puerto Rico with a physical presence in the county production traditional consumables. With exports already establish, the next step will be to decide on the type of presence for CK Products to have in Puerto Rico. With a wide manufacturing base already established, there are several options to consider for growing the company’s market. A joint venture is a likely candidate for Puerto Rico expansion. Existing manufacturing resources provide opportunities to partner with or acquire necessary expertise and operations capabilities to produce consumables locally while minimizing costs. Disadvantages of joint ventures are mitigated in this case because production of refined sugar products require few if any trade secrets and CK Products has little interest in further global expansion beyond Puerto …show more content…
CK Products is operations based in PR will also have the potential to sell to other Caribbean nations and territories. As a small-scale entrant, the company can limit exposure to loss and disadvantages usually associated with small scale entry can be mitigated. Since CK already imports its products, they can build upon those existing relationships to limit loss first-mover opportunities a larger scale entrant might realize.
CK Products has a significant advantage by already being in the Puerto Rican import market. By exploring a joint venture proposal in small scale, CK can quickly expand its presence and deliver confectionery goods fresh and efficiently while limiting its costs and exposure to loss. Because Puerto Rico is a U.S. territory, CK can benefit from no additional tax burden although tax benefits recently expired. The timing of entry is not as critical since first-mover advantages are already limited. Rather the advantage CK gains is the ability to deliver goods fresher and with greater quality

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