This case tests financial modeling, strategic decision-making, and risk assessment for international manufacturing. The candidate must build a profitability framework comparing three locations, calculate revenues and costs across markets, and identify non-financial risks like export controls and geopolitical factors. The key insight is recognizing that despite Brazil's higher profit potential, critical risks around national security and political stability must be weighed against financial returns.
Our client is a US defense contractor and one of its divisions manufactures attack helicopters for military operations. The company is considering setting up a new plant to meet increasing demand in the attack helicopter space. These helicopters are fully equipped with guns and ammo when delivered to the end customer. Our client has considered three sites to setup operations: Brazil, France, and the US.
How would you make this decision, and where should our client set up the plant based on that analysis?