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You are an adviser to a multinational company in the textile industry. The company’s business model relies on manufacturing inexpensive pants and shirts that they sell in the United States and Canada. The manufacturing plant is located in Nicaragua and exports the clothes to various cities throughout both countries. The company has been doing very well in North America and has decided to expand into the southern part of South America or western Europe. More specifically, in South America and Europe, they are looking for options for setting up a manufacturing facility in Argentina, Chile, and Brazil. In Europe they are considering France, Germany and Belgium. They will set up the plant in the country and export to the other countries. For example, if the company selects Brazil for its manufacturing facility, it will sell the products in Brazil and export it to distributors and retailers in Argentina and Chile. If you select western Europe, please identify the country in which the manufacturing facility will be located and the two other countries to whom the products will be exported. For example, if you select western Europe as your region and France as the host country for the manufacturing facility, the company will export its clothes to Belgium and Germany.
Step 1: Should the company pick Western Europe or South America for its expansion?
Step 2: Having decided which region to which they will expand, please select the specific country within the region where they should establish manufacturing facilities. Here are some questions to ask and answer.
As a consultant to the management department, please assess the risk of setting up a facility in these three countries.
What are the economic upsides of investing in certain countries and exporting to others?
Step 3: Having selected the specific country for establishing a manufacturing facility, what can you recommend about the culture of doing business in the host country?
Overview of Different Variables (Data Points) and Relevant Data on SOME Websites
Remember- I am asking for a review of political, economic, and legal components of each country’s investment climate. Below I provide a breakdown of the legal factors and a few EXAMPLES of the variables in other categories. THIS IS NOT A COMPREHENSIVE LIST.
Legal systems: Common Law, Civil Law, Theocratic law
Examples of specific legal variables to look for: Property rights, Rule of Law, Foreign Direct Investment laws.
Political systems: Democracy vs. Tottalarianism
General variables: Political stability vs. Political Instability
Specific variables: Expropriation risk, Political Violence risk
https://www.credendo.com/country-risk (Links to an external site.)
Go to country risk and hit download data
Economic Risk Components
Command economy vs. market economy
General Variables: Economic instability
Specific Variables: GDP per capita, inflations rates
https://stats.oecd.org/ (Links to an external site.).
By keyword using “search” (e.g. GDP (Links to an external site.), FDI (Links to an external site.), Health (Links to an external site.), unemployment (Links to an external site.), income distribution (Links to an external site.), population (Links to an external site.), labour (Links to an external site.), education (Links to an external site.), trade (Links to an external site.), finance (Links to an external site.), prices (Links to an external site.)
http://www.cyborlink.com/ (Links to an external site.) (general areas of culture)
1) Reference Desk
2) Global resource directory
This is also helpful: https://theglobalobservatory.org/2012/09/indices/