INT 220 Module 3 Assignment

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INT 220 Module Three Assignment Economic and Political Environments Comparison Section One We are evaluating three countries in which to sell our cell phone cases. These countries have been identified as Mexico, Germany and South Africa. We’ve examined six categories outlined below in order to start our analysis on which country would be better to expand our sales of cell phone cases. The categories below represent areas of interest to our organization that will greatly dictate to varying degrees, our organization’s ability to succeed. Some categories should be weighed more heavily than others. Political systems, economic classifications and economic trade blocs will tell the story of what type of environment we are entering. As shown below, the three countries represented are all democratic political systems with mixed economies. This is good for our business as the government is not communistic or overly controlling of the market economies. It is easier for our organization to enter a market run by a democracy and a mixed economy versus a communist closed economy. Additionally, each of the three countries belong to at least two economic trade blocs of which the United States (US) is a member. This means that trade agreements are already established between all three of these countries and the US. We’ll be able to leverage those trade agreements to our advantage without having to start from scratch (Dunung, 2019). The last three categories; gross domestic product, purchasing power parity, and gross domestic product per capita also tell us a story, but is focused more on the financials of the countries as a whole and the individual household’s wealth, purchasing power and income. Of the six categories some can be weighed more heavily than others. For instance, while it is more desirable for a country to be a democracy with an open economy, we could still enter the market if it was a communist political system or a closed economy. It would just be more difficult and take a longer amount of time. The same can be said for the third category. It is advantageous for our organization that all three belong to economic trade blocs the US is a member of, but this also isn’t a deal breaker as we’d still be able to enter these markets without a trade agreement between our countries (Dunung, 2019). This leaves the last three categories; gross domestic product, purchasing power parity, and gross domestic product per capita. I believe these three categories should be weighed more heavily than the first three as these can be used to measure how much money the country and population can purchase and therefore spend on cell phone cases. Gross domestic product is the measure of a country’s economic health. It gives the world a measurement of the country’s output of goods and services (Dunung, 2019). Purchasing power parity is the measurement of the individual country’s currency and its overall strength or weakness when compared to other countries (Dunung, 2019). Gross domestic product per capita is a measurement of a given country’s household spend. The higher the number, the more income individuals have to spend on goods and services (Dunung, 2019). Because these three last categories directly relate to currency, overall country wealth, and individual household wealth, I feel it important to weight these last three categories more heavily than the first three categories for purposes of this analysis.

Section Two Category Mexico Germany South Africa Political System Presidential Republic Democracy Democratic Parliamentary Republic Constitutional Democracy Economic Classification Mixed Economy Mixed Economy Mixed Economy Economic Blocs Impacting Trade World Trade Organization, MERCOSUR & USMCA World Trade Organization and EU World Trade Organization & SACU Gross Domestic Product $1.3t $3.8t $108b Purchasing Power Parity 19.5 58.2 14.6 Gross Domestic Product Per Capita $9.5k $46.4k $7k Section Three Because Mexico, Germany and South Africa are equal in the first two categories, and similar in the economic trade bloc category, and taking into account that I’m weighing the last three categories heavier than the first three, it is evident the most appropriate market we should enter is Germany. Germany, across the board, has a higher gross domestic product (GDP), purchasing power parity (PPP), and gross domestic product per capita (GDPPC). This means their country is wealthier, their currency is stronger and their individual households will have more money to spend on cell phone cases. The only downside to expanding into Germany over the second choice, Mexico, is the logistical challenges in selling our cell phone cases across an ocean versus to a country in our hemisphere. Mexico is my second choice for global market entry. It has some pros over Germany, but if we look at it in simple economic terms, then Mexico is not as desirable as Germany to expand into. Mexico does have a logistical advantage from a geographical perspective and it also belongs to two different economic trade blocs of which the US is already a member of, however, their GDP, PPP, and GDPPC is less than half, and some instances a quarter of Germany’s statistics. Lastly, South Africa is the least appropriate market, when compared to Germany and Mexico, that we should expand into for the time being. Not only does it rank lowest in GDP, PPP, and GDPPC, they also present the largest logistical geographical challenges of the three. References

Dunung, S. P. (2019). Global business management V1.0: Textbook. FlatWorld. Retrieved September 13, 2021, from https://catalog.flatworldkno wledge.com/catalog/edition s/dunung_1-global- business. Sanjyot P. Dunung. (2019). Global Business Management. Boston, MA: FlatWorld Embassy, US (2019). Germany-Market Entry Strategy. Captured 17 March 2023 from: https://www.export.gov/apex/article2?idflGermany-Market-Entry-Strategy . United States Trade Representative (USTR) (2019). South Africa. Captured 17 March 2023 from: https://ustr.gov/countries-regions/africa/southern-africa/south-africa World Bank (2019. Captured 17 March 2023 from: https://www.worldbank.org/en/home

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