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Dollar Store in Mexico: Evaluate various exit strategies: e.g., divestiture of assets, handing over to joint venture partner, diversification, or shutting down operation, and contingencies for your global venture

A business venture : opening a dollar store in Mexico.

1. Examine the role of external governance and its impact to the
organization.

2. Make final recommendations about the feasibility of this global
venture.

3. Evaluate various exit strategies: e.g., divestiture of assets,
handing over to joint venture partner, diversification, or shutting down
operation, and contingencies for your global venture

Solution Preview

I need assistance in the following in regards to a business venture that is opening a dollar store in Mexico. Any help will be appreciated. Thanks

1. Examine the role of external governance and its impact to the organization.
The role of external governance is crucial as there are various political risk factors that could jeopardize business operation. Here if the political situation is unstable then the environment is unfavorable for the business. Similarly higher Government debt, Budget deficit or surplus is also unfavorable. The other factors are:

Tax Laws and other economic laws
Foreign trade regulations
Import tariffs and quotas
Restrictions on international financial flows
Environmental protection laws
Copyright and patent laws

All these have an impact. The more the transparency in the laws and less the regulations, the better it is for the business. On the other hand stringent and opaque regulations jeopardize the business opportunities. Moreover if there is political instability, inefficient governance and judiciary system also affect the business.
In Mexico 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, ...

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