Technophar, a small but profitable manufacturer of hard gelatin capsule machines, was confronted with a potential default in its technology transfer agreement with a Vietnamese pharmaceutical firm. At issue is whether the company should pursue or terminate the Vietnam contract, particularly in light of potentially greater opportunities in neighbouring China. More fundamentally, Technophar needs to develop an international expansion strategy in terms of which markets to enter and how to determine market opportunities. This case should be used in an international business course to illustrate issues central to internationalization and the problems of a Stage I company progressing to Stage II, while competing in world markets.
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