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    SuperLoud Headphones develops, markets and sells unique headphones in the United States utilizing its patented Deafening Technology. SuperLoud decides to have its headphones manufactured in China to reduce costs and increase the profit margin. What are the most significant legal and business implications in establishing a relationship with the Chinese manufacturer of its headphones? Why are these significant?


    Ouch Masks designs, markets, and sells hockey masks. Ouch is based in the United States, but the masks are all produced in China. One of Ouch’s biggest markets for the sale of its masks is in Canada. How and to what extent might the intergovernmental relationships between these countries influence Ouch’s business strategy and operations? Explain. What actions can Ouch take to offset any negative influences from these intergovernmental relationships? Explain.



Subject Business Pages 5 Style APA


Business law

Question 7a


When goods are manufactured in China there will be a reduction in cost and this automatically means that the profit margin will increase. Manufacturing in China is also generally good for business because they give better services and are said to be more accommodative towards start-ups as opposed to the factories in the US (Shugar, 2016).


There are various barriers that are experienced. One of them is with respect to language or communication. A lot of expense is also accrued when shipping and subsequently paying for duty.


When products are manufactured at a low cost, there is a greater chance that better sales will be realized (Shugar, 2016). This means that since the products are affordable, it will be easy to grow the clientele base. 


A major threat that accrues is with respect to intellectual property protection. It is argued that there is widespread violation and ineffective implementation of the law in China when it comes to intellectual property protection (Husch Blackwell, 2018).

Issue: how can intellectual property be protected when products belonging to a US company are manufactured in China?

Rule: Article 2(4) of the UN Charter requires member states to respect the sovereignty of other countries (UN Charter, Article 2). Further, matters to do with infringement of intellectual property are handled in the country where the IP protection was registered.

Analysis: This means that intellectual property matters in China are handled in China and the same applies to intellectual property matters in the US.NI

Conclusion: US companies that manufacture in China should register both the American and Chinese versions of the marks (Husch Blackwell, 2018).

Question 7b


There is a reduction in cost when goods are manufactured in China and this automatically means that the profit margin will increase. Further, when products are distributed in various parts of the world there will be a large client base this more sales will accrue.


Intergovernmental relationships between all these countries have the potential of adversely affecting the company. For instance, when there is no good working relationship between two countries, the sales tariff may be increased.




The company can experience tremendous growth when it casts its net wider and grows its clientele case across the world.


When there is an increase in export duty or sales tariff, the company may fail to realize the benefits of casting its net widely.


When there is political instability in one country, or when there is a major policy change in one country, the whole business will be affected. For instance, since the company relies on China for the manufacture of its goods if the Chinese government passes policy regarding increased levying for export products, Ouch’s business will be directly affected.


Economic changes in one country affect the entire business. For instance, during the period of the great recession, Chinese government mandated that manufacturing prices be significantly increased (Shugar, 2016).


The company has to consider the varying cultures and laws when setting shop in the different countries.



 Issues may arise with respect to technological integration and adaptation because when products such as hockey masks are newly introduced in a market, it may take time for the target population to understand its utility.


Husch Blackwell LLP. (2018). Top eight legal issues regarding entering the China market. Retrieved from


Shugar, G. (2016). The Pros and Cons of Manufacturing in China. ENTREPRENEUR. Retrieved from


United Nations. (1945). Charter of the United Nations and Statute of the International Court of Justice. New York: United Nations, Office of Public Information.


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