American Radiator Supply Company (ARS) is a small firm focused on managing its costs, but more is going on with this small U.S. manufacturer. It is facing hidden challenges as it tries to operate in global emerging markets. As the company considers an international acquisition, it must create a business plan. While ARS needs to calculate labor costs, payback periods, and return on investment, it also needs to assess the risks of this potential international venture and how to succeed if the acquisition proceeds. This case is adapted from the real story of a U.S. business seeking to expand operations into Estonia following the collapse of the Soviet Union and resulting reforms in Eastern Europe. The case presents students with the combined challenges of small firm operations, international expansion, and emerging market risk. The key decision point in the case is whether to move forward with a foreign acquisition, given the management team's knowledge and previous international experience
