Country Factor Analysis (Essay Sample)

Country Factor Analysis
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Introduction
Country factor analysis is very essential for a business development manager to determine whether expanding business in another country is a positive move or not. Australia has its own cultural, economic, political and legal factors that different businesses operate in order to succeed. It is important to compare all this factors in relation to the country you plan to invest in. Columbia’s culture, economic capability, legal structures and political situation is very different from that of Australia hence need to analyze these factors in-depth in order to make an informed decision of whether to expand a company to Australia or not.
Columbia is still an emerging country and its economic growth is enormous. Emerging economies like Columbia have experienced an enormous growth in their economies compared to developed countries. The resilience expressed by Columbia during the global depression places it at a better position for investment. The countries trade volumes and GDP in general remained equally the same even during the global distress experienced by other countries. Columbia’s GDP has been on the rise at the same level as that of developed countries. Its location in South America gives it an upper hand as the backbone of the global economy is now fully dependant on the south-American countries like Argentina, Brazil and Columbia (Bender, 2012).
Most businesses are likely to succeed in emerging markets such as Columbia because they have kept their spending power as low as possible as compared to countries like Brazil and India who are expected to triple their expenditure by 2018. As Columbia continued to grow economically, she underwent an economic transformation experienced by developed countries after the Second World War. Their growth is accelerated by the advanced growth in technology, good policy making structures and their increased efforts to reduce the poverty index by establishing good health, education and normal social reforms. Succeeding in Columbia is so easy especially if you are going their as a pioneer, just like Colgate did many years back. The only trick is to maintain consistency in management, have persistency, be ready to endure the ups and downs and above all have a long-term vision (Bender, 2012).
Consumers buying power in Columbia is very positive. The country citizen trust buying goods that have been manufactured in the country as compared to those that have been imported. Even though in the first years, the consumers have a low purchasing power, they trust your products most as compared to those imported from developed countries. Studies show that there is an increasing level of consumer availability in emerging markets like Columbia; as a result most companies need to come up with great strategies on how to enter these markets and succeed in the long term. Imports from developed countries are a not really appreciated in the country unless the companies are established in Columbia (Bender, 2012).
Due to the measures aimed at curbing poverty levels in Columbia, through provision of better health and social services, most citizens are moving from the lower class to the middle class level. It is the middle class level that companies intending to invest in Columbia should target, for they are the potential customers.
Over the past 20 years Columbia’s infrastructure has expanded rapidly. Infrastructure includes the road system, Airports and the railway systems. We cannot ignore the rapid internet expansion in Columbia. The strong internet connections help them hide the few flaws they experience in other areas of infrastructure. This is so because most companies wanting to invest in Columbia use the social media, like facebook and twitter to test their products and gradually introduce new products in Columbian market. This is made possible by the excellent and speedy internet connection in the whole country. To be able to invest in Columbia on a long term basis, focus should be put on the youths in the country and their education level and how you can combine the two to achieve success. This will help us have an excellent workforce. With an internet penetration rate of more than 50%, and a larger middle class population, we will most suddenly succeed especially on online trading.
The open political structures in Columbia have helped minimize the risk of corruption and bad business practice. This has been boosted by the rapid growth in the economy and very stringent laws to curb corruption. Columbian press has liberty and there is a lot of democracy in terms of one expressing his thoughts. After all is said and done it is important to, however understand that as a new entrant, these problems will be experienced especially if such companies are dealing directly with the government agencies or the municipalities around. But the high levels of democracy and the improved economic systems will help Columbia largely in preventing such vices.
Columbia has set up structures to track corruption and give severe punishment to offenders. It is, however, important to note that the government of Columbia can only do much, but it is the responsibility of the companies investing in the country to stick to rules and regulations set. They should always practice impeccable ethics when it comes to their business to avoid being caught on the wrong side of the law (Mulaik, 2013).
The Columbian culture is also receptive of foreign businesses. Most population speaks Spanish followed by about 500,000 people who speak American English. Spanish is a universal language that can be learnt by many people, hence not difficult to do business there. However, it can provide a great challenge if not carefully researched on and effective strategies developed to remove any obstacles. Strategies need to be developed to ensure all the staff are familiar with the language if not they are being trained to understand and communicate well. Moreover the acceptance of Catholic Church in the country makes it easy to do business. This is so because, the Catholic Church has impressed education, modernization, social welfare and even union organization which are the similar practices experienced in Australia (Bender, 2012).
The legal structure of Columbia should be well understood before venturing in their market. During recent years Columbia has reformed their legal structures to encourage profitability by investing and accelerating growth in their economy. She has enhanced her political and economic growth by making sure that the security is perfect. Columbia has corporate structures that provide an opportunity to do business in a legal way. This depends on the type of business one is running whether corporate or retail. No special conditions are imposed on foreign investors giving them a level playing field with the nationals. The country also allows foreigners to invest in almost all the areas of the economy with the exception of the defense sector which deals with the security of the country.
The lack of special authorization to trade in the country allow for less expensive and process of establishing business in Columbia. Unless you are in the mining, oil and gas business starting business in Columbia is not such a hectic process. The stability in the country allows for reimbursement of foreigners investment and the remittance of any profit available to the investor at the time of registration of the business (Tucker & Mac callum, 2010).
The country also provides an opportunity to register your investment. Doing so gives you an advantage, as you are allowed to reinvest the profits or keep them as surplus and transfer them whenever you are feel like. Foreign companies also have a chance to remit net ...