Reference no: EM131199136

PowerPoint Presentations OF THE FOLLOWING PROJECT

Course Project

PART A

MAMADOU TRAORE

Based on is a recent development, For a long time, was controlled and governed by a single political party. So, the elections weren't very meaningful -- only one party had a chance of winning. This made Mexico undemocratic in many respects. That changed, and Mexico has improved its democracy, especially in accountability to the people, dramatically.

"The president is elected by plurality vote. In the 1988 and 1994 elections, the winner won about half of the votes cast, but in the 2000 election the winner, Vicente Fox, won only 42.5 per cent of the votes. Proposals exist to amend the constitution to introduce a run-off election between the two front-runners if no candidate wins an absolute majority in the first round. Their success will depend primarily on the electoral prospects of the major parties, as well as considerations of the cost of a second round.

The president is elected for a six-year term and can never be re-elected or reappointed. This prevents presidents from becoming entrenched in power, but it also diminishes their accountability because they never have to face the electorate again. Considering the ideological and symbolic roots behind the prohibition on presidential re-election (it was a focal point in the Mexican Revolution), it is unlikely that this clause will be repealed soon."

https://aceproject.org/ace-en/topics/es/esy/esy_mx

Gilbreth, Chris, and Gerardo Otero. "Democratization in Mexico: The Zapatista Uprising and Civil Society." Latin American Perspectives 28.4 (2001): 7-29. Web. 16 June 2011.

Mexico having opted for a democratic system, it is obvious that it opens its market to foreign investors, and that absolutely enhances international trade and diversity as integration in the global business world.

Is Mexico a stable country?

"Mexico is potentially on the brink of fast expansion, driven by several factors, such as those outlined above. The reforms in Mexico, if properly implemented (which is a big if), will bring about changes that will improve Mexico's competitiveness and ease of doing business. This will attract significant foreign direct investment.

Given the recent volatile swings in emerging market currencies, the stability of the Mexican peso is something investors should value. Additionally, Mexico's country rating was recently upgraded. This will allow the country to raise money for investment at a lower rate than before.

The U.S. is Mexico's largest trade partner. The potential of Mexico's geographical location can't be taken for granted. A boost in the U.S. economy will eventually reflect in the Mexican economy. The timing, though, isn't entirely certain since investors may continue to discount emerging markets in general, despite Mexico perhaps being undervalued relative to its potential.

While Mexico is likely a great long-term investment, investors should remain diversified and spread investments across markets. As mentioned above, the U.S. market still offers a possibly bullish outlook that can ultimately boost the Mexican economy."

By Larry Fink, Chairman and CEO

https://marketrealist.com/2014/07/millennials-try-luck-mexico/

There is no actual instability at the political level. So, business is not shaken at all by instability, whether at the local or international level.

3- Consider whether the economy is market based or a command economy

"Mexico has long been the most accessible Latin American market and nothing in the past decade has changed that. The local currency sovereign market is large and liquid, with no capital controls. Trades can be settled through Euroclear as well as locally, ensuring minimal hurdles for foreign buyers. Even more importantly, the government remains welcoming to foreign investors, with clear and transparent monetary and fiscal policy and no prospect of capital controls.

All this makes it the obvious destination for local currency bond managers to deploy much of the cash they are receiving from new investors. "We can be nimble in Mexico, going in and out," says Edwin Gutiérrez, a portfolio manager on the emerging markets debt team at Aberdeen Asset Management.

That puts Mexico in clear opposition to Brazil, which "says it would like to attract investment but sends mixed signals", through its imposition of the 6% IOF tax on foreign investments into government bonds.

The IOF tax means that despite offering some of the highest real yields available in fixed income, Brazil is now relatively unattractive for new money. Foreign participation in the local currency sovereign market is around 11% - largely unchanged since the point when the tax was introduced. There is no reason to take currently onshore capital out of the country, especially since it can be moved between different government instruments without penalty, says Gutiérrez.

But for new investments, Mexico offers much more flexibility.

While most debt managers view the IOF tax as a backwards step, conversely Brazil is the country that has clearly made the biggest improvements in its equity market. Where once the only investable options were unattractive state-owned firms, today investors can choose from hundreds of local companies, including whole sectors such as IT that barely existed a decade ago.

The direct cause of this was the stock exchange's decision to introduce the Novo Mercado board in 2000. Although this change took several years to build momentum, it has ultimately made a huge difference, says Fiona Manning, an investment manager on Aberdeen's global emerging markets team.

A listing on this board required higher standards of companies, such as a single share class with voting rights. Previously, listed shares were typically preference shares without voting rights, which resulted in easy abuse of minority shareholders."

INVESTMENT: Barriers to entry18/03/2012 | By Cris Sholto Heaton

https://www.emergingmarkets.org/Article/2996937/INVESTMENT-Barriers-to-entry.html

Mexico is not a command economy as it is open to foreign investment, thereby allowing investors from around the world, especially the United States to do business inside Mexico, and does not impose a deep government control on investments.

GDP and GDP growth rate of Mexico

"Mexico is the second largest economy in Latin America. After the Peso Crisis in 1994, Mexico returned to steady growth rates, expanding on average 0.76 percent from 1996 to 2012 on a quarter over quarter basis. Mexico has an export-oriented economy: more than 90 percent of trade is under free trade agreements. In recent years, exports of manufactured products have been expanding more than 10 percent per year, mostly due to the increase in car production. Nevertheless, in order to keep the current pace of growth the country needs to reduce its dependence on the United States; increase its tax base and open the state-controlled energy sector. This page provides - Mexico GDP Growth Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - Mexico GDP Growth Rate - was last refreshed on Wednesday, September 9, 2015.

The gross domestic product (GDP) in Mexico expanded 0.50 percent in the second quarter of 2015 over the previous quarter. GDP growth rate in Mexico averaged 0.64 percent from 1993 until 2015, reaching an all time high of 2.90 percent in the first quarter of 1996 and a record low of -6.60 percent in the first quarter of 2009. GDP growth rate in Mexico is reported by the instituto nacional de estadística y geografía (inegi)."

https://www.tradingeconomics.com/mexico/gdp-growth

Part B

1) Consider common and expected business practices

2) Students should look at average number of days to set up a business. They should look at the level of corruption (will bribes be a required practice?). Transparency internationally ranks in the Corruption Perception Index (cpi.transparency.org/cpi2011).

3) Consider common and expected hiring practice.

4) As mentioned above, what are the employment laws? Are there minimum wage laws, and are there penalties for firing employees?

5) Consider crime rates

6) Consider demographics.

References:

1. Ghemawat, P. (2001). Distance still matters. Harvard business review, 79(8), 137-147.

2. Kelley, L., Whatley, A., & Worthley, R. (1987). Assessing the effects of culture on managerial attitudes: A three-culture test. Journal of International Business Studies, 17-31.

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning.

Part C

INTRODUCTION

Comparison and research conducted between the two countries Mexico and China mainly focusing on its licensing policies, franchising policies, equity joint ventures and wholly owned subsidiaries.

1. Country Facts - Mexico belongs to North America continent. The main language which is spoken here is Spanish. Mexican Peso is known to be the currency of Mexico. Mexico city is known to be the capital city of Mexico. Federal Government is present in Mexico. China belongs to Asia continent. The main language spoken here is Chinese. Chinese Yuan is the main currency of China. Beijing is known to be the capital of China. Shanghai is known to the largest city. They have more of a communist type of government.

2. Cost of living expenses - Cost of living expenses are more in China than in Mexico. Consumer prices, rent prices, restaurant prices, grocery prices and local purchasing power is more in China than in Mexico.

3. Area of Manufacturing - Mexico mainly focuses on the following type of industry namely Aerospace, Automotive, Medical devices, Data management, Repair and maintenance and high end consumer electronics. Mexico mainly focuses on the production of customized things which incur lower shipping costs and lead times. China on the other side focuses on the following mentioned type of industry namely Footwear, Toys, furniture, Textile, Apparels, Information technology and small appliances. Earlier Mexico ruled in the global manufacturing market in spite of the global competition. Mexico always attempted to cut the labor costs and maintain standards of quality and efficiency governed by U.S. In 1990's, FDI was attracted to Mexico because of the Free trade agreement of North America. In 2001, things took a U turn where China became a member in the WTO. Since then, China has topped the charts in manufacturing numbers. China mainly focuses on products which require more labor because of the lower labor costs. China ranks in high volume production and low mix manufacturing operations.

Both the country's top the chart for foreign direct investment by U.S.

4. Wage comparison - $ 0.90 is the Direct labor wages in China on per hour basis which would include room and board. Mexico direct wages is $2.50 per hour including meal, tax, transport, medical benefits. Per capita GDP - In Mexico it is $7,467 and in China it is $1240. Mexico is six times more than China.

5. Workers Strengths - Workers are more skilled in Mexico than in China. They are more technology savvy also in Mexico than in China. Researches show that there are 220 cell phone and 62 computers per 1000 people in China whereas in Mexico for 1000 people 600 cell phones and 228 computers.

6. Bilateral trade and investment - Some of the figures of China and Mexico are shown here. The exports of China to Mexico accounted for 12.30 billion of USD.China's imports from Mexico increased to US$ 3.88 billion. China ran a surplus of 8.42 billion of US$ with Mexico in the year 2009. There is a list of products which China exports to Mexico which include items like electronics, audio-video equipments, mechanical spare parts , children's products like toys, and games and sports facilities. China also imports from Mexico products like base metal and its products, plastic, rubber, minerals, leather, chemicals, transport materials. Mexico invested in 12 projects in China totaling 910,000 of US $ in actual used amount.

7. Economy conditions in brief - In Mexico, there is a direct elected president who is on a six year team and cannot be reelected. It is ranked 15th in the world as per the records in the year 2014. China is ranked as a world's second largest economy but still it's a developing nation. China was earlier known to be centrally planned but now it has moved to market based economy. This has shown the nation a boom and rapid economic and social development. Their millennium development goals are achieved. Mexico was earlier considered to be highly protected economy but now it is into liberalization and it has become an open market for free trade.

8. Business Models for Manufacturing -OEMs can operate both in China and Mexico. They can choose anything from these three options . Either the OEM establishes its production facility or unit in the country by being wholly owned subsidiary or OEM can also partner with other partners to set up a unit of manufacturing in that country which is known as a joint venture. It can also outsource some of the processes as well. There is also a facility called Mexico manufacturing Shelter where the foreign manufacturers can operate quickly without more legislations, rules and legal presence.

CONCLUSION

China and Mexico are on the path of becoming a global entrepreneur. China and Mexico seek out and conduct new and innovative business across national borders. China and Mexico are into exporting, licensing, joint venture. Licensing mainly means that a permission is granted to the licensee that they can make use of licensor's intellectual property rights under predefined and certain norms and conditions. A joint ventureA contractual strategic partnership between two or more separate business entities to pursue a business opportunity together; each partner contributes capital and resources in exchange for an equity stake and share in any resulting profits. is a partnership where two or more business entities come together and do business. Franchising is another way to become a global entrepreneur where MNC'sgrants rights to foreign entities on its intangible property for a specified period of time and earns a royalty in return of that. A wholly owned subsidiary mainly applies to those firms which might want to have direct operating presence in foreign country and want to have direct control over it by purchasing the entity.

Part D

We know the fact that, culture and food habits will be different in each country. Most of people have giving more importance to the food items, and they are searching for hotels and restaurants which provides quality products with less cost. While analyzing the local foods in the countries China and Mexico we can able to understand that each countries provides different varieties in food. Now we can analyze the infrastructural facilities and local foods in China and Mexico.

Popular local foods in china

Sweet and Sour Pork

Sweet and sour pork can be called as famous local food in china, in which most of the people are interested to eat this local food. The dish will be orange color and it includes both sweet and sour taste

Major Ingredients

• Salt
• Vinegar
• Cooking wine
• Starch and tomatoes
• sugar, and coriander

Gong Bao Chicken

Gong Bao Chicken, famous local dish in china, the dish is prepared based on Sichuan-style. It is the easy to make Sichuan-style Gong Bao Chicken

Major ingredients

• Diced chicken,
• Dried chili
• Fried peanuts

Ma Po Tofu

Ma Po Tofu can be called as the traditional dish of china, the demand for this food is very high and in most of local restaurants and hotels this food is served as the major dish

Major ingredients

• White bean curd
• Red beef and green scallion

Infrastructural facilities in China

Road and railways

• Railway network : 90,000 km
• Paved road network: 108,000 km the country is providing effective services to the business people and people for managing their travels in an effective way (Zeng, G. 2003).

Airports and water ways

• Airports: total paved runways 403

• Water ways: 110,000 kilometers china also provides great airport and water ways for the people for managing their business and personal objectives and goals (Savenije 2008).

Communication services

The country is also providing effective telecommunication services to the people and the demand for the services is very high. Hi-speed internet services are also provided by the country and TV and radio networks are highly effective for the people for getting various information.

Popular local foods in Mexico

Chilaquiles

Chilaquiles can be called as the famous food item in Mexico, in which it provides an energy and health for the people.

Major ingredients

• Fried corn tortillas
• Red salsa
• Fried eggs and pulled chicken

Pozole

Pozole can be called as an traditional food item in which most of Mexican people and foreigners are interested to eat this food. This food item is available in all the local food restaurants and hotels.

Major ingredients

• Chicken
• Pork
• Onion
• Lime and chilli

Infrastructural facilities

Road and railways

• Railway network : 85000 km

• Paved road network: 116,802 km the from time to time the country is making changes to the road and railway system for managing the traffic issues in an effective way.

Airports and water ways

• Airports: total paved runways 395 total 1835 airports

• Water ways: 100,300 kilometers china also provides great airport and water ways for the people for managing their business and personal objectives and goals (Trejo 1999).

Communication services

The country is also providing effective communication services to the people and speed internet services. Most of the people are employed in telecommunication services (Torres 2003).

Reaction of the locals to a B-B-Q store

Most of the people are interested with the B-B-Q store, the varieties and services provided in the B-B-Q store are highly helpful for the people to manage their basic needs.

While analyzing all these aspects we can able to understand that, in order for attracting more people for the local food items we have to include special dishes which is attract all kinds of customers, foreigners and local people. Mix of south Indian and European dishes wil provide an new market for the country.

References

Liu, J., & Savenije, H. H. (2008). Food consumption patterns and their effect on water requirement in China.Hydrology and Earth System Sciences Discussions, 12(3), 887-898.

Torres, R. (2003). Linkages between tourism and agriculture in Mexico. Annals of Tourism Research, 30(3), 546-566.

Mendoza, A., Gil, C., & Trejo, J. (1999). Multiproduct network analysis of freight land transport between Mexico and the United States. Transportation Research Record: Journal of the Transportation Research Board, (1653), 69-78.

Wang, F. H., Jin, F. J., & Zeng, G. (2003). Geographic Patterns of Air Passenger Transport in China. Scientia Geographica Sinica, 23(5), 519-525.