Choose one of the newly industrializing countries mentioned in the text (p. 102 International Business)
Choose a product you think would be suitable to export to the country you chose based solely on that country's location, climate, topography, and natural resources.
What effect might the economic and socioeconomic forces within that country have on the product's potential? Explain the rationale behind your decisions.
I need some help getting started on this question. I was thinking of using Mexico due to the fact labor would be low, and quality would be high. As far as a product maybe something like clothing or textiles but I am not sure if I am heading in the right direction?
The industrializing countries on p. 102 include the four Asian tigers ( Taiwan, Hong Kong, Singapore, and South Korea), Brazil, Mexico and the three emerging NCI's- Malaysia, Thailand, and Chile
One should also be aware of foreign trade regulations, attitude towards foreign companies as the organization wants to aspire to be an apparel multinational company. It has to consider following factors:
* Political climate - amount of government activity
* Political stability and risk
* Government debt
* Budget deficit or surplus
* Corporate and personal tax laws
* Other economic laws
The last presidential election ended the 70 year one party rule (Wikipedia) which was due to the desire to regain national confidence avoiding another bloody revolution that over threw the government in 1917. The 70 year rule was marked by corruption, nepotism and lack of economic growth.
"On July 2, 2000, Vicente Fox Quesada of the opposition "Alliance for Change" coalition, headed by the National Action Party (PAN), was elected president, in what are considered to have been the freest and fairest elections in Mexico's history. Fox began his six-year term on December 1, 2000. His victory ended the Institutional Revolutionary Party's (PRI) 71-year hold on the presidency. "
Now " Felipe de Jesús Calderón Hinojosa (b. August 18, 1962 in Morelia, Michoacán) , Head of PAN is the President of Mexico" will serve a single six-year-term that began on December 1, 2006 and expires on November 30, 2012.
Thus now we can say that the Mexican governance is more fair and impartial which will have positive impact on our venture.
Mexico is a surprisingly strong economy. In terms of total GDP, the combination of a population of 100 million and a per capita GDP exceeding US$5,000, makes Mexico the ninth largest economy in the world. With US$232 Bn in trade for 2002, it is the US´s second trading partner (behind Canada), and far ahead from the third trading partner (Japan with US$184 Bn). The efforts by the Mexican government to liberalize trade have resulted in a dramatic transformation of both the quantity and structure of trade. In terms of quantity, exports have increased eight-fold, from 20 to 160 US$Bn, and imports have increased over 10 times, from 14.5 to 170 US$Bn. Currently, exports represent over 30% of GDP. There has been is the elimination of most tariffs on goods and services relative to cross border trade due to NAFTA pact. The opportunities under NAFTA and FDI expansion mirror low cost in capital expenditure planning, close proximity borders offer shipping ports like Veracruz in the Atlantic and Manzanillo in the Pacific.
The Mexican economy is having stable GDP growth of 4% which is average performance, its unemployment has declined marginally and inflation is stable and low.
But Mexico is also facing challenges in terms of Mexico as a third world developing country, external debt, political one party rule that is tied with massive political corruption, ...
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