The report examines the political system of Mexico which consists of the head of state who is also the head of government. The government is federal and it is facing a challenge to upgrade infrastructure which is key to economic growth of any country. (James Huck 2008) In Mexico negotiations of business can be successfully carried out once one establishes a relationship first in order to gain trust. Managers prefer to be accorded respect and prefer to hold meetings with senior mangers other than with the junior staff.
(Glen Reed 2006) In order to do business in Mexico it is ideal for one to go through an agent or a distributor due to the high interest rates and inventories maintenance. Promotions are also very important. (Glen Reed 2006) Introduction This report is about the country of Mexico which is a Spanish speaking country. It is in North America and it borders the United States and is a federal constitutional republic. It is numbered 14 as the largest independent nation in the whole world. It is a federation which is composed of 31 states.
The government of Mexico is representative with a federation of the united Mexican states; however there is a gap in income equality with huge gaps between the rich and the poor and also between the rural and urban areas. The widely spoken language is Spanish and English is not widely spoken, only in some business meetings posing a communication challenge to do business in Mexico since one is advised to learn a little Spanish or to use an interpreter while conducting business there.
Mexico is in need of an upgraded infrastructure in order to make it accessible and as well to grow economically so as to be able bridge the huge gaps between the rich and the poor. Content General Demographics Population Climate Language Natural resources Industries Natural hazards Political system Government Administration Impact on business Business and social customs Language Office hours Business negotiations General demographics In his book Free Trade and Environment, Kevin Gallagher states that Population stands at 104 million. This makes it the most populous country in the world which is Spanish speaking.
Most of its population is urban with about 75% living in cities. It is ethnically diverse. Industries are tobacco, chemicals, iron and steel, petroleum, mining, food and beverages, tourism, motor vehicles and clothing. (Kevin Gallagher 2007) Imports consists of agricultural machinery, aircraft and aircraft parts, car parts for assembly, steel mill, electrical equipment, repair parts for motor vehicles and metal working machines. Export commodities consist of oil and oil products, vegetables, cotton, coffee, silver, fruits and manufactured goods.
In his book Free Trade and Environment, Kevin Gallagher states that the climate varies from tropical to desert with low coastal plains, high plateaus and rugged mountains. Its natural resources are gold, zinc, timber, natural gas, petroleum, silver, lead and copper. (Kevin Gallagher 2007) Mexico is not sufficient enough for a foreign business to start up there since it experiences natural hazards like destructive earthquakes at the south and center as well as volcanoes and tsunamis along the pacific coast.
Currently it’s experiencing rural urban migration, hazardous waste disposal facilities are scarce, natural fresh water resources are scarce, poor quality and inaccessible and are also polluted in the north. (Kevin Gallagher 2007) It’s also suffering deforestation, deterioration in agricultural land, serious water and air pollution in the national capital as well a in the urban centers with the government declaring deforestation and lack of clean water as national security issues.
(James Huck 2008) Political system and its impact on business According to the book a global studies handbook, James Huck states that the government is based on a congressional system. The president is both the head of state as well as the head of government with a multi party electoral system. Their constitution published in 1917 ensures that the government if federal and is divided into executive, legislative and judicial and it represents the united Mexican states. (James Huck 2008)
The administration faces economic challenges some of which are need to upgrade infrastructure, allow private investment in the energy sector and to modernize labor law, they also face a major challenge of creating jobs and reducing poverty. (James Huck 2008) Business and social customs According to the book Culture and Customs of Mexico (peter Standish), the northern states in Mexico are bilingual since English is not widely spoken hence to do business there one would need a translator.
Mexicans prefer doing business in the Spanish language. (Peter Standish 2006) According to the book, how to do business in Mexico, direct sales only do for customers with a limited number of consumers and retail and food service in Mexico do not import directly. In his the book, how to do business in Mexico, Glen Reed states that, Mexican consumers are motivated through promotion and advertising although personal contact in doing business there is quite important.
According to the book, how to do business in Mexico, in Mexico office hours are 8. 00 am to 6pm with a lunch break between 1pm and 3pm, 24 hours shift goes for the factories. Banks are open from 8 am to 7pm and 9am to 5pm and larger branches open on Saturdays. (Glen Reed 2006) The businesses in Mexico are hierarchical where status is important. High level managers deal with the same and not with lower level managers. The English language is widely spoken in business meetings though the official language Spanish. (Glen Reed 2006)
In doing business in Mexico to propose a negotiation a relationship should be developed first in order to have trust. Business negotiations center on first having a relationship. (Glen Reed 2007) Business and economic environment The social and economic concerns include under employment for a large segment of the population, low real wages as well as inequitable distribution of income. (James Huck 2008) Inflation in Mexico has reached a low 3. 3%, with its budget deficit reduced together with its foreign debt to less than 20% of the gross domestic product.
(Kevin Gallagher 2007) It is an upper middle income country with a free market mixed economy. In gross domestic product it the 11th largest economy with improved infrastructure thereby building a modern and diversified economy. (James Huck 2008) Oil is the largest source of foreign income and is the largest auto producing nation in North America though it is viewed as an emerging economy. Mexico has open competition in telecommunications, electricity generation, airports, natural gas distribution, rail roads and sea ports. (Kevin Gallagher 2007)
In approximation about 90% of Mexican trade is under free trade agreement with over 40 countries with North American free trade agreement being the most significant. 90% of its trade is done with the United States and Canada and it has tripled with the implementation of the North America free trade agreement. (Glen Reed 2006) Conclusions and recommendations: Due to the fact that the national language of Mexico is Spanish and English is not widely spoken this could be a hindrance to doing business there hence more investigations should be done in establishing about doing business in Mexico.
In his book Changing Structure of Mexico; Laura Randall states that, Mexico experiences natural hazards like destructive earthquakes at the south and center as well as volcanoes and tsunamis along the pacific coast. Currently it’s experiencing rural urban migration, hazardous waste disposal facilities are scarce, natural fresh water resources are scarce, poor quality and inaccessible and are also polluted in the north. (Laura Randall 2006) These reasons do not make it sufficient for investment and therefore these issues should be critically looked at if one wishes to do business there.
The government if facing the challenge of reducing poverty as well as upgrading its infrastructure therefore one should be able to investigate how accessible it is do business there at the moment and decide if they should wait for the upgrading of infrastructure to be undertaken. Instead of going about to get the logistics of Mexico one may go through an agent or an already established distributor in Mexico in order to become established in business in Mexico. This will also make it easier since one does not need to undergo inventories maintenance charges.