INTERNATIONAL BUSINESS

ENVIORNMENT

CASE STUDY OF MEXICO

IBE
 The International Business Environment concentration provides a
“macro” view of markets and institutions in the global economy.

 Study of environmental factors such as Economic, Political,

Legal , Demographic and Cultural aspects.
Three equal vertical bands of green (hoist side), white, and red; the coat of arms (an
eagle with a snake in its beak perched on a cactus) is centered in the white band
PHYSICAL
 Location: Middle America, bordering the Caribbean Sea and the
Gulf of Mexico, between Belize and the US and bordering the
North Pacific Ocean, between Guatemala and the US

 Geographic coordinates:
23 00 N, 102 00 W

 Area:
total: 1,972,550 sq km
land: 1,923,040 sq km
water: 49,510 sq km
 Land boundaries:
total: 4,353 km
border countries: Belize 250 km, Guatemala 962 km, US 3,141 km

 Coastline:
9,330 km

 Elevation extremes:
lowest point: Laguna Salada -10 m
highest point: Volcan Pico de Orizaba 5,700 m

 Climate:
varies from tropical to desert
 Natural resources:
petroleum, silver, copper, gold, lead, zinc, natural gas, timber

 Irrigated land:
63,200 sq km (2003)

 Total renewable water resources:

457.2 cu km (2000)

 Freshwater withdrawal (domestic/industrial/agricultural):

total: 78.22 cu km/yr (17%/5%/77%)
per capita: 731 cu m/yr (2000)
Environment - current issues:
 Scarcity of hazardous waste disposal facilities

 Rural to urban migration

 Natural fresh water resources scarce

 Polluted in north, inaccessible and poor quality in center and extreme

southeast

 Raw sewage and industrial effluents polluting rivers in urban areas

 Deforestation , widespread erosion; desertification

 Serious air and water pollution in the national capital and urban centers
along US-Mexico border
DEMOGRAPHIC
 Population:
109,955,400 (July 2008 est.)
 Age structure:
0-14 years: 29.6%
(male 16,619,995/female
15,936,154)
15-64 years: 64.3% (male
34,179,440/female 36,530,154)
 Median age:
total: 26 years
male: 24.9 years
female: 27 years (2008 est.)
 Population growth rate:
1.142% (2008 est.)
 Birth rate:
20.04 births/1,000 population
(2008 est.)

65 years and over: 6.1% (male  Death rate:

3,023,185/female 3,666,472) 4.78 deaths/1,000 population
(2008 est.) (2008 est.)
 Sex ratio:  Infant mortality rate:
at birth: 1.05 male(s)/female total: 19.01 deaths/1,000 live
births
 under 15 years: 1.04
male(s)/female  male: 20.91 deaths/1,000 live
births
 15-64 years: 0.94
male(s)/female  female: 17.02 deaths/1,000 live
births (2008 est
 65 years and over: 0.82
male(s)/female
total population: 0.96
male(s)/female (2008 est.)
 Nationality:  Languages:
Mexican(s) Spanish only 92.7

 Ethnic groups:  Literacy:

mestizo (Amerindian- definition: age 15 and over can
Spanish) 60%, Amerindian or read and write
predominantly Amerindian total population: 91%
30%, white 9%, other 1% male: 92.4%
 Religions: female: 89.6% (2004 est.)
Roman Catholic 76.5%,
Protestant 6.3% (Pentecostal
1.4%, Jehovah's Witnesses
1.1%, other 3.8%), other 0.3%,
unspecified 13.8%, none 3.1%
(2000 census)
 CULTURE AND SOCIAL
ENVIRONMENT
Culture is communication. It is a way
people create, send, process and interpret
information. It influences how we act and
respond .
Mexico city
 Mexico is a culture based on dignity, diplomacy and courtesy.
 Official Language – Spanish
 Capital City – Mexico City
 Religion – Roman Catholic (Christianity)
 Music - Mariachi (It refers to musicians who dress and play in a
style typical of one of the state like jalisco and consists of 2
violins and one Spanish guitar and often more than 20
musician .)
Contd.
 Mexicans appreciate your
attempt to learn their
language.
 They are not very Time-
Oriented.
 They don’t have high
propensity for risk-taking.
 Relationships are very
important to them.
 Gestures, Body Language
plays a very important role in
business dealings .
 Blend of native American
traditions and Spanish
colonial influences.
 Mexican culture is known for
unified nature of the family
and family is their first
priority.
 Divorce Rate in Mexico is
lowest in the world (i,e.0.33
percent per 1000 population).
 Male Dominant society.
 Fatalistic outlook – As God
Wills.
Contd.
 They are very trustworthy.
 Conversational Space is much
closer .
 Very Nationalistic approach.
 Dress and Grooming are
considered to be status
symbol.
 Title and Position are
considered to be more
important than money.
 They tend to avoid personal
competition.
 Protocol is very important
while doing business with
Mexicans.
 Major Festivals – Days of the
Dead (Oct 31- Nov 2).
 Christmas (25 Dec).
 Cancun Jazz Festival (May 22 –
May 26).
Contd.
 Sports – Country's biggest
obsession.
 Major Sports- Football,
Wrestling, Bull Fighting.
 Other Sports include – Golf,
Tennis, Deep Sea Fishing.
 Cuisine – Diverse tastes. Rich in
protein, vitamins and minerals.
 They don’t make Eye Contact
 Good Conversational Topics
 Avoid discussions on topics
like Mexican-American War
 Refrain From using First
name
 Don’t use red ink for writing
someone’s name.
 POLITICAL AND LEGAL
ENVIRONMENT

POLITICAL STRUCTURE

LEGAL STRUUCTURE
 Independence:
16 September 1810 (declared); 27 September 1821 (recognized by
Spain)

 Legal system:
mixture of US constitutional theory and civil law system; judicial
review of legislative acts; accepts compulsory ICJ jurisdiction
with reservations

 Judicial branch: Supreme Court of Justice

POLITICAL STRUCTURE
 Government Type- FEDERAL
REPUBLIC
 Administrative Divisions- 31
states and 1 federal district.
 Administrative divisions: 31
states
 Executive branch:
chief of state: President Felipe de
Jesus CALDERON Hinojosa
(since 1 December 2006); note -
the president is both the chief of
state and head of government
 Head of government:
President Felipe de Jesus
CALDERON Hinojosa (since 1
December 2006)
 Cabinet: Cabinet appointed
by the president; note -
elections: president elected
by popular vote for a single
six-year term; election last
held on 2 July 2006 (next to be
held 1 July 2012)
President FELIPE CALDERON
Major Political Parties

 Convergence of Democracy (CD)

 Institutional Revolutionary Party (PRI)

 National Action Party (PAN)

 Party of the Democratic Revolution (PRD)

INTERNATIONAL ORGANIZATION PARTICIPATION
 APEC- American Petroleum Exporting Countries
 G-3, G-6, G-15, G-24
 UN, UNCTAD, UNESCO, WHO, NAFTA, NAM, ILO, IAEA, WTO
Interpol, etc.
 Doing Business In MEXICO

Starting Business :

country Procedure Duration Cost(% GNI Min.Capital

(no. of per capita) (% GNI per
days) capita)

MEXICO 8 27 14.2 12.5

INDIA 11 35 73.7 0.0

AUSTRALIA 2 2 1.8 0.0

AFGHANIST 3 8 67.4 0.0

AN
 Employing Workers :

country Diff. in Rigidity of Diff. in HIRING FIRING

hiring hours Firing COST COST
MEXICO 33 40 40 23.9 74.3

INDIA 33 20 70 16.8 55.9

AUSTRA 0 0 10 21.3 4.0

LIA
H.K. & 0 0 0 5.0 4.3
CHINA
AFGHAN 67 40 30 0.0 62.1
ISTAN
 ECONOMIC
ENVIRONMENT
Economy - overview
 Mexico has a free market economy in the trillion dollar class. It
contains a mixture of modern and outmoded industry and
agriculture, increasingly dominated by the private sector.
 GDP (purchasing power
parity):
$1.578 trillion (2008 est.)
 GDP (official exchange rate):
$1.143 trillion (2008 est.)
 GDP - real growth rate:
2% (2008 est.)
 GDP - per capita (PPP):
$14,400 (2008 est.)
 GDP - composition by sector:
agriculture: 3.7%
industry: 34.1%
services: 62.2% (2008 est.)
 Labor force:
45.5 million (2008 est.)
 Labor force - by occupation:
agriculture: 15.1%
industry: 25.7%
services: 59% (2005)
 Unemployment rate:
4.1% plus underemployment
of perhaps 25% (October
2008)
 Public debt:
20.3% of GDP (2008 est.)
 Inflation rate (consumer
prices):
6.2% (2008 est.)
 Exports:
$294 billion f.o.b. (2008 est.)
 Exports - commodities:
manufactured goods, oil and
oil products, silver, fruits,
vegetables, coffee, cotton
 Exports - partners:
US 82.2%, Canada 2.4%,
Germany 1.5% (2007)
 Imports:
$305.9 billion f.o.b. (2008 est.)
 Imports - commodities:
metalworking machines,
steel mill products,
agricultural machinery,
electrical equipment, car
parts for assembly, repair
parts for motor vehicles,
aircraft, and aircraft parts
 Imports - partners:
US 49.6%, China 10.5%, Japan
5.8%, South Korea 4.5% (2007)
LITERACY RATE ( 2004)
MEXICO INDIA

LITERACY RATE 92.2% 61.3%

YOUTH LITERACY 96% 73.3%

RATE (AGE 15-24)
TECHNOLOGICAL ENVIRONMENT
 It is a study of all those factors that involve scientific
knowledge,Innovation and inventions that result from research.

 IT AND TELECOMMUNICATION
 AVIATION
 AUTOMOTIVE MANUFACTURING INDUSTRY
IT AND TELECOMMUNICATIONS
 WIRELESS COMMUNICATION
 TELECOM SYSTEM
 INTERNET CONNECTIVITY
 ECOMMERCE
COMMUNICATIONS
 Telephones - main lines in use-  40 million mobile users
19.512 million (2005 )  VAS (Value added services
 Telephones - mobile cellular
will be the key to get new
-3.8million(2004)
subscribers
 INTERNET CONNECTIVITY  E-COMMERCE

 Internet hosts -2,026,633

 17 million regular Internet
users
 Internet users-16,995,400
 Travel Services and Specialty
Stores are the industries that
have developed online stores,
and are now the ones that
register the most online sales.
 AVIATION  Automotive Manufacturing
Industry
 Airports-1839(2006)
 1000 manufacturers and
 Helliport-1 70% of them subsidiaries of
foreign corporations,

 58% automobiles sold are

imported, of which, 75%
come from the United Sate
THANK YOU