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Introduction
In order to provide effective anti-virus protection VMTEC Sys must think globally. With cyber crime on the rise, no country should be overlooked as the next viable source of a computer virus (Muncaster, 2009). Because China has the most economic opportunities and presents the greatest threat to the personal and small business computer VMTECH Sys has identified a strategic need to establish a research and development division to be physically located in China. This research paper will analyze and review the economic opportunities and threats that VMTECH R&D can expect to encounter as well as other market conditions which will affect the operations of a division located within China.
Market Entry Method It is essential for VMTEC Sys to establish a presence in China. Rather than trying to import goods or services to sell, the company has chosen to establish a research and development division in China. VMTEC Sys will form a corporative joint venture known as VMTEC R&D, which will operate as a division of VMTEC Sys. The parent company will provide capital funds to entice participation of a local owner who will provide labor and manage the research and development division. In a recent article, written by a CPA, there are several reasons for establishing a business in China: Lower labor costs, opportunities for growth, and access to highly motivated and educated workforce (Rowbotham, 2009). By forming a corporative joint venture, the company will be able to enjoy the benefits of lower labor costs, establish a base for growth opportunities, and have direct access to highly motivated and educated workers. The corporate joint venture will be formed according to the legal entity concept where the entity pays corporate taxes in its own name in order to avoid a double taxation event.
Foreign Market Environment External factors can influence

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