Deal Making in China and Asia: Risks and Strategies

Deal Making in China and Asia
Question 1
1. Firestone Tire and Rubber tire technology is one of the most superior ones in the globe,
and the current technology is among the recent innovations for China and Asia. For this
reason, the product will provide an unbeatable tire technology for the company,
compared to its competitors.
2. Firestone is also willing to buy back every year a certain volume of tires that met
international standards. In turn, this will provide the client with a market and a source of
income in the future to help them recover from the initial investment of 30 million US
dollars.
3. Firestone Tire and Rubber has an impeccable reputation of quality across the globe. It has
a lifelong history of producing and selling quality products with the latest technology
trends and, is therefore a good choice for the client.
4. Firestone is willing to recall back any products that do not perform according to the
expectations of the client and the promise made by the company on the technology’s
ability to meet the requirements of its target market.
5. The company’s product not only guarantees high quality products for the client, but it
also guarantees safety of the products.
Question 2
Modern
1. At the moment, the Lombok region is still a rural area, and therefore land and property
are still low, and may take a long time before the property value appreciates. For this

reason, it is only fair for the investor to pay a reasonable entry price that is concurrent to
the current market prices of the property.
2. There is also a significant completion risk of the construction of the hotel at Lombok.
Although Modern will issue a completion guarantee to the lenders, it is not insurance
enough that the project will see completion. For this reason, it is only fair for the investor
to pay a fair market entry price for the venture.
Le Meridian
1. At the moment, there is a country risk associated with investing in Indonesia. As such,
the nation is yet to obtain a long term political stability. In turn, this may affect the
overall profitability of the venture. For this reason, the investor should pay a fair market
entry price as the rest of the stakeholders.
2. The venture is also associated with an economic risk. As such, Indonesia is prone to
recession and other unfavorable economic conditions that may negatively impact on
demand for the resort facilities. For this reason, the investor should pay a fair price that
takes into account the uncertainties.
Question 3
Part A
1. Siam Commercial Bank should not invest in the in the deal because the investment is
prone to significant risks. In turn, this may substantially affect the project’s ability to
repay the bank the loan.