international business enviornment

8/14/2019 International Business Enviornment

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NTERNATIONAL BUSINESSNTERNATIONAL BUSINESSENVIORNMENTNVIORNMENT

CASE STUDY OF MEXICO


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IBEThe International Business Environment concentrationprovides a macro view of markets and institutions inthe global economy.

Study of environmental factors such as Economic,Political, Legal , Demographic and Cultural aspects.


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( ), , ;Th ree e q u al ve rticalb an d s of g ree n h oist sid e w h ite an d red th e( )coa t o f a rm s a n e ag le w ith a sn a ke in its be a k p e rch e d o n a ca ctu s is

ce n te re d in th e w h ite b a n d


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PHYSICALLocation:Middle America, bordering the CaribbeanSea and the Gulf of Mexico, between Belize and theUS and bordering the North Pacific Ocean, betweenGuatemala and the US

Geographic coordinates:

23 00 N, 102 00 W

Area:total: 1,972,550 sq km

land: 1,923,040 sq kmwater: 49,510 sq km


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Land boundaries:total: 4,353 kmborder countries: Belize 250 km, Guatemala 962 km,US 3,141 km

Coastline:9,330 km

Elevation extremes:lowest point: Laguna Salada -10 m

highest point: Volcan Pico de Orizaba 5,700 mClimate:

varies from tropical to desert


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Natural resources:petroleum, silver, copper, gold, lead, zinc, naturalgas, timber

Irrigated land:63,200 sq km (2003)

Total renewable water resources:

457.2 cu km (2000)

Freshwater withdrawal(domestic/industrial/agricultural):total: 78.22 cu km/yr (17%/5%/77%)

per capita: 731 cu m/yr (2000)


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Environment - current issues: Scarcity of hazardous waste disposal facilities Rural to urban migration

Natural fresh water resources scarce Polluted in north, inaccessible and poor quality in center and

extreme southeast

Raw sewage and industrial effluents polluting rivers in urban

areas Deforestation , widespread erosion; desertification Serious air and water pollution in the national capital and urban

centers along US-Mexico border


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DEMOGRAPHICPopulation:109,955,400 (July 2008est.)

Age structure:0-14 years: 29.6%

(male 16,619,995/female15,936,154)

15-64 years: 64.3%(male 34,179,440/female36,530,154)

65 years and over: 6.1%(male 3,023,185/female

3,666,472) (2008 est.)

Median age:total: 26 yearsmale: 24.9 yearsfemale: 27 years (2008est.)

Population growth rate:

1.142% (2008 est.)Birth rate:

20.04 births/1,000population (2008 est.)

Death rate:

4.78 deaths/1,000population (2008 est.)


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Sex ratio:at birth: 1.05male(s)/female

under 15 years: 1.04male(s)/female

15-64 years: 0.94male(s)/female

65 years and over: 0.82male(s)/femaletotal population: 0.96male(s)/female (2008est.)

Infant mortality rate:total: 19.01deaths/1,000 live births

male: 20.91 deaths/1,000live births

female: 17.02

deaths/1,000 live births(2008 est


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Nationality:Mexican(s)

Ethnic groups:mestizo (Amerindian-Spanish) 60%,Amerindian orpredominantlyAmerindian 30%, white9%, other 1%

Religions:Roman Catholic 76.5%,Protestant 6.3%(Pentecostal 1.4%,

Jehovah's Witnesses1.1%, other 3.8%),other 0.3%, unspecified

Languages:Spanish only 92.7

Literacy:

definition: age 15 andover can read and write

total population: 91%male: 92.4%female: 89.6% (2004est.)


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ULTURE AND SOCIALULTURE AND SOCIALENVIRONMENTENVIRONMENTCulture is communication. It is away people create, send, process

and interpret information. Itinfluences how we act and respond

.


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Mexico city


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Mexico is a culture based on dignity, diplomacy andcourtesy.

Official Language Spanish

Capital City Mexico CityReligion Roman Catholic (Christianity)

Music - Mariachi (It refers to musicians who dress andplay in a style typical of one of the state like jaliscoand consists of 2 violins and one Spanish guitar andoften more than 20 musician .)


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Contd.Mexicans appreciate yourattempt to learn theirlanguage.

They are not very Time-Oriented.

They dont have highpropensity for risk-taking.

Relationships are veryimportant to them.

Gestures, Body Languageplays a very importantrole in businessdealings .

Blend of native Americantraditions and Spanishcolonial influences.

Mexican culture is knownfor unified nature of thefamily and family istheir first priority.

Divorce Rate in Mexico islowest in the world(i,e.0.33 percent per1000 population).

Male Dominant society.Fatalistic outlook As

God Wills.


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Contd.They are verytrustworthy.

Conversational Space ismuch closer .

Very Nationalisticapproach.

Dress and Grooming areconsidered to be statussymbol.

Title and Position areconsidered to be moreimportant than money.

They tend to avoidpersonal competition.

Protocol is very importantwhile doing businesswith Mexicans.

Major Festivals Days ofthe Dead (Oct 31- Nov2).

Christmas (25 Dec).

Cancun Jazz Festival (May22 May 26).


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Contd. Sports Country's biggestobsession.

Major Sports- Football,Wrestling, Bull Fighting.

Other Sports include Golf,Tennis, Deep Sea Fishing.

Cuisine Diverse tastes.Rich in protein, vitaminsand minerals.

They dont make EyeContact

Good ConversationalTopics

Avoid discussions ontopics like Mexican-American War

Refrain From using Firstname

Dont use red ink forwriting someonesname.


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OLITICAL AND LEGALOLITICAL AND LEGALENVIRONMENTNVIRONMENT

lPOLITICAL STRUCTURE

ll

lLEGAL STRUUCTURE


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Independence:16 September 1810 (declared); 27 September 1821(recognized by Spain)

Legal system:mixture of US constitutional theory and civil lawsystem; judicial review of legislative acts; acceptscompulsory ICJ jurisdiction with reservations

Judicial branch: Supreme Court of Justice


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POLITICAL STRUCTURE Government Type- FEDERALREPUBLIC

Administrative Divisions- 31states and 1 federal

district.

Administrative divisions: 31states

Executive branch:chief of state: PresidentFelipe de Jesus CALDERONHinojosa (since 1December 2006); note -the president is both the

chief of state and head ofgovernment

Head of government:President Felipe de

Jesus CALDERONHinojosa (since 1

December 2006)

Cabinet: Cabinetappointed by thepresident; note -

elections: presidentelected by popular votefor a single six-yearterm; election last heldon 2 July 2006 (next to

be held 1 July 2012)


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President FELIPE CALDERON


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Major Political PartiesConvergence of Democracy (CD)

Institutional Revolutionary Party (PRI)

National Action Party (PAN)

Party of the Democratic Revolution (PRD)


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INTERNATIONAL ORGANIZATION PARTICIPATIONAPEC- American Petroleum Exporting Countries

G-3, G-6, G-15, G-24

UN, UNCTAD, UNESCO, WHO, NAFTA, NAM, ILO, IAEA,WTO Interpol, etc.


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Doing Business In MEXICO

Starting Business :

country Procedure Duration(no. of days)

Cost(% GNIper capita)

Min.Capital(% GNI percapita)

MEXICO 8 27 14.2 12.5

INDIA 11 35 73.7 0.0

AUSTRALIA 2 2 1.8 0.0

AFGHANISTAN

3 8 67.4 0.0


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EmployingWorkers :

country Diff. in

hiring

Rigidity of

hours

Diff. in

Firing

HIRING

COST

FIRING

COST

MEXICO 33 40 40 23.9 74.3

INDIA 33 20 70 16.8 55.9

AUSTRALIA

0 0 10 21.3 4.0

H.K. &CHINA

0 0 0 5.0 4.3

AFGHANISTAN

67 40 30 0.0 62.1


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CONOMICCONOMICENVIRONMENTNVIRONMENT


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Economy - overviewMexico has a free market economy in the trillion dollar

class. It contains a mixture of modern and outmodedindustry and agriculture, increasingly dominated bythe private sector.


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GDP (purchasing powerparity):$1.578 trillion (2008est.)

GDP (official exchangerate):$1.143 trillion (2008est.)

GDP - real growth rate:

2% (2008 est.)

GDP - per capita (PPP):

$14,400 (2008 est.)GDP - composition by

sector:agriculture: 3.7%industry: 34.1%services: 62.2% (2008

Labor force:45.5 million (2008 est.)

Labor force - byoccupation:agriculture: 15.1%industry: 25.7%services: 59% (2005)

Unemployment rate:4.1% plusunderemployment ofperhaps 25% (October

2008)Public debt:20.3% of GDP (2008est.)

Inflation rate (consumerprices):6.2% (2008 est.)


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Exports:$294 billion f.o.b. (2008est.)

Exports - commodities:manufactured goods,

oil and oil products,silver, fruits,vegetables, coffee,cotton

Exports - partners:US 82.2%, Canada2.4%, Germany 1.5%(2007)

Imports:$305.9 billion f.o.b.(2008 est.)

Imports - commodities:metalworkingmachines, steel millproducts, agriculturalmachinery, electricalequipment, car partsfor assembly, repairparts for motorvehicles, aircraft, andaircraft parts

Imports - partners:US 49.6%, China 10.5%,

Japan 5.8%, SouthKorea 4.5% (2007)


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LITERACY RATE ( 2004)

MEXICO INDIA

LITERACY RATE 92.2% 61.3%

YOUTH LITERACYRATE (AGE 15-24)

96% 73.3%


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TECHNOLOGICALENVIRONMENT It is a study of all those factors that involve scientificknowledge,Innovation and inventions that resultfrom research.

IT AND TELECOMMUNICATION

AVIATION

AUTOMOTIVE MANUFACTURING INDUSTRY


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ITAND

TELECOMMUNICATIONSWIRELESS COMMUNICATIONTELECOM SYSTEM

INTERNET CONNECTIVITY

ECOMMERCE


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COMMUNICATIONS Telephones - main lines inuse-19.512 million (2005 )

Telephones - mobile cellular-3.8million(2004)

40 million mobileusers

VAS (Value addedservices will be

the key to getnew subscribers


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INTERNET CONNECTIVITY

Internet hosts -2,026,633

Internet users-16,995,400

E-COMMERCE

17 million regularInternet users

Travel Services andSpecialty Stores are the

industries that havedeveloped onlinestores, and are now theones that register themost online sales.


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AVIATION

Airports-1839(2006)

Helliport-1

AutomotiveManufacturingIndustry

1000 manufacturers and70% of themsubsidiaries of foreigncorporations,

58% automobiles sold areimported, of which,75% come from theUnited Sate


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THANK YOU

international business enviornment

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