Bus 1602 - Global Business and Sustainability

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Subject Code: BUSI 1602

Subject Title: Global Business and Sustainability

Program me: UOG-MBA

SEGI ID: SC-KL-00044643

UOG ID: 000858488

STUDENT NAME: Xing Jie

Lecturer Name: Mr. Vicky

Learning Center: SEGI COLLEGE KUALA LUMPUR

Submission Data: 13/9/2015

目录

1.0 Introduction        

2.0 Entry decision and country selection        

2.1 Venezuela        

2.2 Joint Venture        

2.3 Mexico        

2.4 Contract Manufacturing        

2.5 Criteria        

3.0 10 years enter plan        

4.0 Product Challenges        

5.0 Recommendation        

6.0 Reference        

1.0 Introduction

Latin America is American mainland market addition to the US and Canadian, Latin American countries with higher economic level in developing countries, abundant natural resources and huge development potential. With the establishment of a free trade zone in Latin America and economic integration process, Latin America continued its steady economic growth [4]. On the other hand, Latin America's weak economic base, technological backwardness, industrial products uncompetitive in the international market, the vast Latin American market has great survival and development space [3].

ALLSTAR decided to replace the OTC toothpaste into the Latin American market is a very wise decision. Toothpaste does not belong to OTC, but toothpaste has its own advantages. First, the toothpaste as daily necessities that easier access to markets. Second, the Latin American countries for the control toothpaste is looser than OTC, this policy regarding Latin American countries.  Finally, toothpaste more likely to be people admitted. Latin American countries are not developed, backward technology and a huge market potential. ALLSTAR toothpaste into the Latin American market, through its own technological superiority, and developed brand advantage, so have the opportunity to grow and develop itself.

2.0 Entry decision and country selection

2.1 Venezuela

Latin American market complex, each country has its own advantages and disadvantages, and Venezuela has the incomparable advantage of other countries. Venezuela is one of the countries more economically developed in Latin America, It is an important producer and exporter of oil in the world, at the same time dependent on imports of food and household items [6]. The United States is Venezuela's largest trading exporter, and Venezuela's economic ties. Venezuela actively develop relations with the United States and the Caribbean countries, advocates speeding up the integration process in Latin America. Supply of drugs and medical supplies shortages. Patients are increasingly need to rely on family and friends to help to search for drugs, maintenance therapy. Venezuelans living in severely affected. In addition, rich human resources, cheap labor, developed by air [7].

2.2 Joint Venture

We believe that the joint venture will be based in the Venezuelan market, the best choice. With lower world crude oil prices, Venezuela's economy appeared sluggish. In fact, this is a good news, because we will work with the Venezuelan negotiations occupy more weight. Select joint venture to enter Venezuela can work effectively with the local middle class, and middle class support the local of the opposition coming to power. A joint venture to enter can effectively prevent local protectionism persecution. Through the appointment of local employees and increase the employment rate will be welcomed by the Government of Venezuela.

2.3 Mexico

Mexico is Latin America's most economically developed countries. Mexican economy has been able to maintain a smooth operation, mainly due to the North American Free Trade Agreement and the international market price of crude oil continues to climb. North American Free Trade Agreement on January 1, 1994 came into effect. By the United States, Canada, Mexico Three, whose purpose is to set up: the abolition of trade barriers, and create the conditions for fair competition, increase investment opportunities, provide adequate protection for intellectual property rights, the establishment and effective implementation of the Agreement dispute settlement procedures, and to promote trilateral , regional and multilateral cooperation. Mexico is both a mineral and is a large agricultural country, resource production in the world [5]. And transport more developed, mainly by road traffic and shipping. These provide a solid foundation for the development of the Mexican market. In addition, Mexico's dependence on the US deep, US economic situation often determines the economic development of Mexico, It also determines the US companies will not be marginalized, open up the Mexican market are safe and secure[1].

2.4 Contract Manufacturing

Through the survey, we decided to use contract manufacturing into Mexico as a choice. The main reason is because there is good economic policy in Mexico, the Mexican government will be through some form of tax relief, which is an important measure to attract investment to improve their economy [2]. North American Free Trade Agreement (NAFTA) is a trade agreement the United States, Canada and Mexico between the three countries, trade flows between the three countries mutual tariff reductions, raw materials trading only need to pay import tariffs once, for example: raw materials Canada to Mexico, and then shipped back to Canada without having to impose tariff treatment. Mexico also has cheap labor and low cost of raw materials, the biggest advantage comes from Mexico has signed free trade agreements with a wide range of countries, other countries, so the contract manufacturing is the best choice for the quick and easy to enter the Mexican market.

2.5 Criteria

For the countries selected to enter our survey reference price、purchasing power、population and effect. We believe that no matter how the economy of this country, every country has its own advantages. Through the investigation we found that the cost of production and prices are the decisive factor. Costs include raw material costs, transportation costs, and staff costs. Try to reduce cost and improve price to get the maximum profit. The price is set by the local economic level, purchasing power decisions. Mexico and Venezuela is the Latin American region economically more developed countries, and cheap labor, transport facilities, economic stability, growth potential is considerable. So we decided to choose to enter Mexico and Venezuela.