Herb: That’s very true!

Gigi: Today, I would like to determine how government regulations currently affect Katrina’s Candies. I would also like to determine whether the direction Katrina’s is considering, expansion via capital investment or a merger, will comply with these government regulations.

Provide link for EU Publication found at:

·        http://export.gov/europeanunion/eustandardsandcertification/2010countrycommercialguide/index.asp

Gigi: I feel the same way.  Although my background and experience are in the management field, I never took the time to study or learn about federal laws that affect business operations.

Herb:   Well, I feel you’ve given us a good place to start, Gigi.  Let’s share the information we gathered about these regulations and decide what’s relevant and irrelevant.

Gigi:  I didn’t find any information that suggests that expanding Katrina’s Candies via capital investment will pose any regulatory issues.  Did you find anything?

Herb:   No, I didn’t find any information that suggests expanding a product line into international markets creates any regulatory issues. However, I did learn that the U.S. government has a new program to help expand U.S. exports.  This program is referred to as the National Export Initiative or N. E. I.  The N.E.I. program is ideal for Katrina’s Candies plan to expand exports, if we do indeed intend to expand into an E.U. country.

Gigi: E.U. country? What does this mean?

Herb: Sorry about that, I will explain. EU stands for European Union country.   The U.S. government established a special unit in the U.S. Mission to the E.U., referred to as The U.S. Commercial Service. This service is used to assist US businesses through the process of gaining access to or doing business in E.U. markets.

Gigi: Could you give me an example of something the U.S. Commercial Service does that would facilitate Katrina’s expansion efforts.

Herb:   For one thing, Katrina’s can get U.S. Commercial Services’ specialists to research and identify markets we might enter; or, Katrina’s Candies team can access and use research specialists’ posts on the Mission website.  We can also request assistance from specialists to help us understand E.U. regulatory requirements and so on.  Either of these services will save the company money because we would not need to hire international consultants or interpreters to implement our plan.

Gigi: Really! The Board and Ken will be thrilled to receive this information.  Any government service that             saves Katrina’s Candies money is a welcomed assistance!

Herb:   Yes, we can certainly use help to sort through the publication that explains how to do business in the E.U. I recall that the title of the publication is: Doing Business in the European Union:  2011 Country Commercial Guide for U.S. Companies and it’s available online.

Show link for http://buyusainfo.net/docs/x_8213360.pdf

Provide link for “Helping your business in the European Union section”

·        http://export.gov/europeanunion/index.asp

Herb:  I skimmed Chapter three. Selling U.S. Products and Services located at the following web address.  Chapter three explains the various ways a firm can enter a market.  For example, a firm could use either an agent, distributor or a firm can direct market its products or use franchise agreements.

Gigi:    Was there any information particularly useful to Katrina’s Candies?

Herb:  Yes, I saw lots of useful information; however, we don’t need to go through specifics until after Ken and the Board decides which of the options to implement in order to expand Katrina’s Candies.

Gigi: Was there anything else U.S. Commercial Services can do to assist Katrina’s?

Herb: I saw that there’s lots of other assistance Commercial Services provides.  For example, if a firm has problems implementing plans to penetrate one of the EU markets, Commercial Services will be an advocate on behalf of the firm. I also learned the E.U. provides grants to U.S. firms and other services to facilitate business expansions. You can review the list on the E.U. website, the list is located under the “Helping your business in the European Union section.” There are many other services that you can investigate on this website as well.

Herb: Wait, that’s not all. We can also contact staff at a U.S. Export Assistance Center.  Assistance centers are a part of the U.S. Small Business Administration or SBA. Katrina’s Candies is not a small business; however, we can probably get information about resources for firms in our size category.  I believe the U.S. Department of Commerce’s Trade Information Center, is another source for getting assistance. There is also another program that relates to Ken’s merger option.

Gigi: Another government source? I didn’t think the U.S. government assisted businesses in this way.  I originally thought that the government only regulated business activity?

Herb:          According to the material I read in preparation for our discussion, the U.S. Government can assist businesses as long as the assistance promotes competition.  Keep in mind that the government has always provided assistance to foreign companies entering U.S. markets. It seems that the government is now focusing more attention on U.S. firms.

Gigi: Oh, I understand.  Helping firms establish export business does promote competition in international markets as well as creates jobs within the U.S.

Herb:  Yes, that’s right. Now let me tell you about the other export assistance program which is the U.S. Department of Commerce’s “Look South Initiatives” program.

Gigi: Look South? Does that mean what I’m thinking? Does this program focus on exporting to countries south of the U.S. border?

Herb:  Yes, that’s the focus of the Look South program. There are eleven countries that have a focus and Mexico happens to be one of these countries.

Gigi: That’s fantastic news! This means we can contact Look South staff to discuss the merger option we        looked at last week.  Ken certainly wasn’t aware of this information when we met; otherwise, he would have shared it with our team.

Herb:  I don’t think Ken was aware of this program because the program was just announced recently.  Also, when I looked through the website, I didn’t see that merger was an option the program addressed.  I did, however, see that the program offers the same services as the U.S. Commercial Services.

Gigi: Herb, it seems that we need to contact the Look South office to learn whether the program assists firms who want to merge with firms in the Look South group of countries.

Provide link to FTC website.

·        http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/mergers/premerger-notification-and-merger

Herb:  That’s great! Please go over your findings!

Gigi: I started off by going to the Federal Trade Commission Mergers website to gather information. I noticed that a merger with Katrina’s and another company does not interfere with competition or create a monopoly in the U.S. market, the merger would not violate Section seven of the Clayton Act.  However, since Katrina’s and another company could be considered direct competitors, or companies that market to the same type of customers, we may run into problems. Also keep in mind that the Hart-Scott-Rodino Act requires firms to submit notification of a proposed merger. So, we need to begin working on this now.

Herb: How do we submit this notification?  Is there a link on the FTC website?

Gigi: Great question! There’s a premerger and notification process that requires submission of paper work and a payment of a filing fee that ranges between forty-five thousand dollars and one hundred and seventy-nine thousand dollars depending upon the value of the merger. Here is the link to the FTC website so you can access the information we need.

Gigi: I think that’s a good plan! Let’s get this information to the legal unit as soon as possible so you have enough time to make your final recommendation.

Herb:  Good, should we also give the legal team information about the government’s new export expansion initiatives?

Gigi:    I believe so! Let’s give the legal team as much information as possible so they can begin thinking how to support whichever decision The Board and Ken choose.  Is there anything else we need to consider before we conclude our meeting?

Herb:  I don’t think so; we have covered everything we needed to go over.

Gigi: Fantastic! Before we adjourn today’s meeting I think it would be best if we did a review since we covered so many new topics today. Therefore, I would like for you to participate in a review activity I put together based on the key items we discussed.

Create a interactive interface that contains links to the following resources (Items will be played from within Scenario via embedding)

·        United States Mission to  The European Union.

o   http://useu.usmission.gov/doing-business-local.html

·        Chapter 3. Selling U.S. Products and Services

o   http://buyusainfo.net/docs/x_8213360.pdf

·        U.S. Export Assistance Centers.

o   http://www.sba.gov/content/us-export-assistance-centers

·        Helping your business in the European Union. 

o   http://export.gov/europeanunion/index.asp

·        Look South Initiatives . U.S. Department of Commerce.

o   http://export.gov/tradeamericas/looksouth/

·        Mergers

o   http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/mergers/premerger-notification-and-merger

·        E.U- Funded Grant Programs.

o   http://export.gov/europeanunion/grantstendersandfinancing/eu-fundedprogramsgrants/index.asp

Question: Which antitrust act was passed to combat mergers that threatened competition?

Answers:

1. The Clayton Act
2. The Federal Trade Commission Act
3. The Sherman Act
4. The Robinson-Patman Act

Feedback:

a.      The Clayton Act

Correct:  The Clayton Act made it illegal for any company to engage in non-competitive behavior; no matter the company’s size. This act strengthened the Sherman Act which only outlawed monopolies. 

b.      The Federal Trade Commission Act
Incorrect:  The primary purpose of the Federal Trade Commission Act was to make “trusts” unlawful.

c.       The Sherman Act

Incorrect:  The Sherman Act illegalized only monopolies or monopolistic behavior.

d.      The Robinson-Patman Act

Incorrect:   This act made it unlawful for sellers to engage in certain types of price discrimination.

Concluding scene taking place in the conference room.

Provide clickable objects where students can view videos.

·        What are antitrust Laws.

o   http://www.youtube.com/watch?v=9Chz37Fn1-A
 

·        What is antitrust?  Why is it important?

o   http://www.youtube.com/watch?v=E7IrRCh4mfk

Herb: They were great, Gigi! Thank you for sharing these review materials with me; they were a great review tool. Can we now complete a review of what we accomplished today so I can be prepared for my next meeting with Ken?

Gigi: Sure thing! We first talked about government regulations and addressed some different types of initiatives that exist.

Herb: We later talked about the European Union and viewed a publication dealing with U.S. Companies and their E.U. business dealings.

Gigi: Lastly, we talked about merger regulations Katrina’s Candies would need to observe. During this discussion we took a close look at the Federal Trade Commission Merger regulations and processes.

Herb:  Thank you for the review, Gigi! I feel very prepared for my next meeting with Ken.

Gigi: You are quite welcome Herb! Before you go to meet with Ken, I would like for you to take a look at two videos I have found. I feel they will really solidify today’s discussion and may be of some use to you during your meeting with Ken. Take care Herb and until we meet again; don’t forget to complete your weekly threaded discussions based on the key concepts we covered this week.