Mexico Swot Analysis

SWOT ANALYSIS

Strengths

Mexico is enjoying a growing economy that is currently ranked 12th in the world according to the CIA facto book. The country has boosted trade significantly by signing Free Trade agreements with the United States such as NAFTA. Mexico is also a source of cheap labor despite regions of corrupt labor union practices.

Acme is a large and powerful brand with a positive reputation in the United States thus adding legitimacy when conducting business abroad. The company buys in large bulk quantities from its suppliers that allow it to offer products at low prices, which will appeal to the Mexico’s growing middle class – which also has a fondness for American consumerism. Mexico is also investing heavily in its industries, and therefore has a heavy demand for construction components and tools.

Weaknesses:

Mexico is not an optimal business environment. Decades of statism have left a heavy practice of corruption that has impacted the socio-economic climate. Regulation is confusing and cumbersome, with rules and procedures operating inconsistently and arbitrarily. The bureaucracy is equally burdensome and is filled with practices of bribery. Licensing costs are also extremely high, plenty of non-competitive laws are still in place, and recently reform legislation resulted in heavy union favoritism. The rule of law has further deteriorated as drug trafficking continues on a rampage. Mexico’s business professionals originate from a small pool of elites that do not have the standard business training and experience that their US counterparts have. These business leaders and managers operated behind protection from the government in entities that originated or grew to become statewide monopolies. Therefore, it is reasonable to deduce the availability of capable managers is scarce while those devoid of corrupt practices even more so.

Because of the constant shipments of products in and out of the department store from its suppliers, Acme could...