Problem:
While traveling to Thailand on a vacation, you meet Ms. Jenny Chang, an Asian business executive, in the plane. She is happy to learn that you are the international business development consultant for a multinational company. She becomes interested in your expertise and asks you to work as her company's consultant for a project involving new business development in Pakistan. Her company has just invented a revolutionary new CAD system for designing and weaving wool carpets that can improve the design and manufacturing productivity significantly. Several patents protect the unique design of this technological system. The CEO has asked you to formulate a recommendation for how to expand into Pakistan. Your choices are (i) to export to Pakistan from the manufacturing plant in Singapore, (ii) to license a Pakistani firm to manufacture and market the computer system in Pakistan and elsewhere, and (iii) to set up a wholly owned subsidiary in Pakistan.
Select the best of the three choices for foreign investment decision for Ms. Jenny Chang. You must support your recommendation by first evaluating the pros and cons of each alternative for Chang's company.