Global-Management-Individual-Assignment.docx - Hult &...

Hult & Company - Global Management Individual Written Assignment
António Chagas, 12/11/2012
Executive Summary
The present report analyses the strengths and opportunities related to the
expansion of NATURE LAB in South America. One of the suggested countries
is Colombia. Colombia presents itself as a challenging and growing market
opportunity. It is a fast pace driven economy, with a young and rising middle-
income class, and strong predisposal for health care and beauty products.
However, there are some possible setbacks that the company should be aware
of, which will also be described. Therefore, Hult & Company will draw some
recommendations regarding the expansion market and the most suitable
strategic action.
Country Overview
Colombia is a rising global economy. With a warm climate, a diverse
geography, and a multiethnic population, Colombia is also one of the richest
countries in South America concerning natural resources such as petroleum,
coal, coffee and fruit. ‘Services’ is the leading sector, accounting 57% of the
Gross Domestic Product (GDP) between 2000 and 2005, and Oil is its major
industry[Car07].
In order to analyse the investment opportunity we will use the CAGE
framework to compare “distances” between Colombia and NATURE LAB’s
home base, France (see Exhibit 1):
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Hult & Company - Global Management Individual Written Assignment
António Chagas, 12/11/2012
1) Cultural Distance:
Colombian culture is very different in comparison with France. Besides the
language there is also a difference in the way business is done. According to
the Communicaid 2012 Report, three factors guide Colombia’s business
environment: family, indirect communication and time. Family is central in
Colombian society, many companies are family owned. In terms of indirect
communication, Colombian businesses role in an informal and subtle mater,
usually avoiding direct confrontations. Finally, within the Colombian society,
punctuality is not a priority and meetings usually last for several hours.
Colombia uses the same metric system but different voltage (the voltage is
110-120 Volts, same as U.S.).
In terms of values, norms and dispositions, there could be some similarity
because both cultures share their Roman Catholic heritage. But Colombia’s
culture also inputs a strong African and Amerindian influence.
Administrative Distance:
Historically, Colombia shares stronger ties with Spain, its former colonizer,
which can be positive, considering its proximity with France.
According to the French site ‘France Diplomatie’, the trading relations
between France and Colombia have been continuously rising since 2004 but it
is not a strong partner (4 th exporter in South America). France exports to
Colombia mainly automobiles, chemicals and pharmaceuticals and imports
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Hult & Company - Global Management Individual Written Assignment
António Chagas, 12/11/2012
mainly coal, ferro-nickel and agricultural products. But from Colombia’s
perspective France is a good financier, accounted as its 4 th largest investor.