Negotiation - COUNTRY ANALYSIS How do countries vary on...

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COUNTRY ANALYSIS How do countries vary on relative attractiveness in this industry? 1. Paradiso is more focused on manufacturing and less on technology, and is better suited for mass production of components, while Tropicalia is heavily technology based and may want to focus more on building the microanalyzers. It may be possible that either country could produce fully, but the potential may be greater focusing on the specialized industries. 2. Both large emerging markets that other countries and companies wish to invest in due to the large amount of resources available. 3. Recent shift towards democratic government allows other governments and companies more peace of mind when investing in either country. What are the implications of market size, political risks, govt. policy towards FDI and trade for your negotiating strategy? Paradiso Need ministry approval for foreign investment, joint ventures, and licensing Transitioned to a democratic government with a socialist leader; however, over the past 10 years a shift towards privatization and free trade has taken place History a marred political unrest, such as military coups, could make investors uneasy. Recently reduced tariffs with the advent of the EXCOM current market agreement Any company with more than 49% share is considered foreign owned and all local benefits are lost Extremely high unemployment and decreasing inflation President Marino enjoyed early years of success but recently his administration has hit tough times with a slowed economy and possible corruption High manufacturing industries Tropicalia Due to political instability they have been unable easily implement economic reform. Very unstable political structure
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Economic cycle’s swings have taken a toll on the economy. They experience years of double digit growth and then sharp recessions and hyperinflation. An industrial power (automobiles and chemicals) and one of the largest emerging markets New president, Professor Suracho decided to peg the new currency Palma to the dollar, and privatize state enterprises and loosen import controls High unemployment, growing current account, history of heavy inflation Reduced control of state control of the economy In the past have had strong barriers against foreign investment but recently are trying to take a more open position They have to be improved by the foreign investment coordinating board (for foreign investments) Some MNCs were banned from certain sections of the economy such as transportation and publishing High technology industries 4. YOUR TEAM’S POSITION AND STRATEGY What alternatives do you have and what are the pros and cons of each? 1.
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This note was uploaded on 10/20/2010 for the course IBUS 160 taught by Professor Srividyajandhyala during the Spring '08 term at GWU.

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Negotiation - COUNTRY ANALYSIS How do countries vary on...

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