Whelan Pharmaceuticals Case

261 Words2 Pages
Problem Identified: The Whelan Pharmaceuticals needs to determine an ideal location to manufacture their new product, Varex. However, there were different functional areas preferred different sites for Varex: In light of the high tax rate, from the purely financial point of view, Ireland is a better choice, but in light of the price negotiation with the European Countries, it seems that continental Europe will be a better choice. In addition the fact that the strategic objectives of the company are satisfied in selecting European mainland, this is likely to be choice of the committee. Manufacturing in Ireland would give the company a continuing tax savings of $35 million dollars a year by the fourth year that Varex is on the market. My Recommendation: Whelan should manufacture Varex in Continental Europe. Supporting Arguments: • The price negotiations with the continental Europe partners has been done successfully and is likely to have a salubrious effect on net income. • The strategic objectives of the company are likely to be achieved by locating the manufacturing facility in Europe since Europe remains the largest market as well as the fastest market for the company's products and the market is growing faster than the US market. • A strong move to remove double taxation in the Europe. • Europe headquarters in Switzerland has $200 million in cash, which can gainfully be used to set up the manufacturing facility. • Europe has the edge in local suppliers and technical people, even though the wages are slightly lower in Ireland. Tools / Techniques/ Approaches for Analysis: SWOT Analysis Return on Assets Break-even
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