Project Part 5 Abby PDF

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Name: Abigail Carrillo Lopez Registration: 2686351 Name of the course: InternationalEnvironments and Business OperationsName of the professor: Alejandro José Jiménez Solano Module: 3, Lesson 10. “Internationalexpansion and foreign markets”Activity: Term Project part 5. Doing business abroad (Mexican...

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Name: Abigail Carrillo Lopez Name of the course: International

Registration: 2686351 Name of the professor: Alejandro José

Environments and Business Operations Module: 3, Lesson 10. “International

Jiménez Solano Activity: Term Project part 5. Doing business

expansion and foreign markets” Date: November 22nd, 2019 Bibliography:

abroad (Mexican expansion)

Hill, C.W. (2016). International Business: Competing in the Global Marketplace [Global Edition]. United States: McGraw Hill. My courses Tecmilenio, International environments and business operations, Module 3, Lesson 10: https://miscursos.tecmilenio.mx/ultra/courses/_160851_1/cl/outline

1. Start with a brainy business quote that is relevant to your particular project. [2 POINTS] - “A satisfied customer is the best business strategy of all” 2. Introduce yourself in order to generate empathy. [4 POINTS] 1. Who you are, who you work for (consultancy firm), what brought you here, what it means to you to work with them as a client. - Hello! My name is Abby Carrillo I work for Interglobal Solutions as a marketing and sales consultant. Working here it means a lot because you get to know different business environments thanks to our customers and that was one of the reasons that brought me here, so as the opportunity to provide solutions to big enterprises. 3. Go straight to your findings on the current business environments that prevail in the targeted country/region. [60 POINTS] 1. The relationship between demographics and purchasing power in that country. Is it favorable for the Mexican company? - Yes, it is in fact favorable for the Mexican company if they’re looking to expand themselves to that country, since the demographics on that country are high developed and with a high growth percentage, plus, the purchasing power also has been rising within the last years. 2. How their political system can help or undermine your client? - Because, they can get to decide what merchandise can pass through customs and this can represent an advantage for our client, because if they get to work together, they will get the approval to import/export goods in-between. 3. How the whole project will play out within the economic system of the targeted country? - It will benefit both countries, it will increase their commercialization levels, economy development and it will help to improve new trade agreements between the targeted country and Mexico. 4. How to use their legal system and relevant government regulations to your client’s favor? - It can be used as an advantage to get approval from customs department, governmental authorities or any other legal permission needed. 5. How do foreign direct investments work in that country, and if there any fiscal incentives for your client. - It generally consists on capital investment used for the development of new installations, (e.g. production plants) or even the creation of new products/services improvement on companies who are already established on that country.

6. How is the local currency doing? Include a snapshot of the current monetary trends around it. - Dollar’s value it can be applied on goods and services almost globally, because it comes to be the principal devise during any international transaction. Today’s dollar value against the Mexican peso, it is of $19.28, which represent a decrease of 0.10, even though the last couple of days it was increasing.

7. An insight on that country’s culture in the workplace: what the Mexican company will find and how to deal with it. - They manage an accelerated business rhythm, because they think of time as something very valuable, since they believe that “time is money”. They prefer a business treat to be practical, quick and direct, they also tend to be analytic and with a strong professional ethic. Alike Mexicans culture in workplace, they think punctuality it is very important and for the same reason, they consider money as a priority, not like Mexicans that consider always, family as a priority. The way that the Mexican company could deal with this, is to study first their culture, and adapt as much as possible to them, just in a way that it can be baneful for both parts. 8. How to comply with relevant fiscal and/or environmental regulations that apply directly to your client’s business. - By doing first all the necessary research work in order to understand which are the legal procedures, norms, regulations, restrictions and requirements needed to complete operations between those two countries, and also by receiving the accurate assistance from law expertise’s. Maintaining control and a good organization of accountings on each enterprise involved. 9. What to expect about local hiring practices, employment benefits, minimum wage standards, and the role of labor unions. - They have principles about honest well and hard work it receives good payment. Some of their employment benefits are: 1-2 paid vacations per year, with the right of an increase of up to 2 days per worked year after the first one, medium wage goes from $8 to $12 dollars per hour, the legal minimum is of $7 dollars in most of the states, bonuses, medical insurance, dental insurance, sight insurance, life insurance, pensions plan and death compensation in case of an accidental death or loss of a member. They also have the right of working in a safe environment. When it comes to hiring practices, what they look for is someone who it is a good representative for the enterprise, someone who accomplish with all of the needed skills and that could benefit the workplace. 10. Enlist relevant trade policy details between Mexico and the other country, in terms of signed free-trade agreements, tariffs, subsides, import quotas, antidumping duties, etc.

The most relevant trade agreements between these two countries are: NAFTA and Mexico-EU Free Trade Agreement. There are also existing licenses that need to be acquired/approved before importing or exporting merchandise between countries, also, there are certain sanitary permissions, ad-valorem tax payment and import quotas, all of this may vary depending on the material or merchandise to be traded. 4. Round up with your recommendations on which strategic decisions might bring success to the expansion effort. [30 POINTS] 1. Should your Mexican client enter the market in the targeted country? Yes, or no? - Yes, because it can benefit both countries. In case of Mexico, it will help to increase numbers in exportations, which consequently, be the key of the economic development and the rise of new industries or maybe the creation of new trade agreements and change or implementation of tariffs, quotas, etc. 2. If so, when should they start doing it? What are the costs? - They could start as soon as they gather all of the permissions needed and resources, taking into consideration previous analysis and budget. Costs may vary depending on the expected scope and involvement of stakeholders, whether it is only from the companies or also government entities or private organizations. 3. And to what scale? Should they enter the National market directly, or by internal regional markets instead? Why? - It would be more convenient to enter first by internal regional markets, in order to determine if the project is eligible to be expanded to a whole national market. 4. Among exporting, licensing, franchising, joint ventures and wholly owned subsidiaries, which entry mode is their best option? - It could be franchising and joint venture, as the project develops. 5. Are there any acquisitions or strategic alliances to be made in the targeted country? - They could go for a strategic alliance with different enterprises who are already established in that country, and also, with any other company who turns out to be a helpful resource for our customers. 5. Conclusions [4 POINTS] - With these findings, it could be understood the fact that every countries workplace culture it is different, and that it has more influence while doing business than what some may think. It is very important, when entering to a new market to have a previous understanding on these factors, because on they it depends a big part of the expansion process. Even though we might believe that it is enough to aim for the project’s success, in order to get that we must follow or accomplish certain “conditions” which are going to be explained on the projects strategic plan. This conditions consist on the entering mode decision, (joint venture, licensing, etc.) business strategy and resources. A good planning, analysis and organization can lead to any project’s success, even if it’s magnitude is as big as entering to a new country’s market. -...