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Gerber Products Company Investing in the New Poland
Based on above analysis, we suggest that Gerber should stay in Alima. However, there are some problems that Gerber should have to solve. The most important one is taxation because it affects Alima's total long-term return directly. If Gerber can be granted the kind of tax credit that the polish government had initially offered, it would enhance the potential return of the Alima deal. The second one is uncertainty of political situation which become even worse as opposition to foreign investment arises outside of the government.
Therefore, in order to minimize the risks of potential changes from Poland government side, we think it is better for Gerber to maintain its bargaining power against Poland government.
Below are some ways we think could help Gerber to maintain or even increase its bargaining power:
(1)Continuous investment: Gerber may increase its annual budget for Alima to show its commitment to the investment.
(2)Bringing in new technology: Gerber could introduce advanced manufacturing technology or modern equipments to upgrade the aging Alima plant, thus helping the local industry to catch up with the Western standards.
(3) Increase more job opportunities in Poland: Because the unemployment rate in Poland at the time was relatively high (11.4%) 4 so this would be highly appreciated by the both the government as well as the Poles.
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