Mexico: Crisis and Competitiveness Case Study Solution
Technological:
Although, there had been spending on the infrastructure resulting in 5% increase in the GDP. Whereas, there is a need to invest more on the research and development strategies to bring out more innovative technologies in order to gain market share. It might require safeguards of intellectual property rights.
Legal:
The laws and regulations system of Mexico was considered as inefficient and slow. Though, recent changes and adaptations of laws, and policies adapted by the government has significantly improved the legal system of Mexico in terms of doing business and its investments.
Environmental:
Due to the complete reliance on Pemex – the oil reserves were used more than half. This resulted in the high cost, and less productivity. Hence, there is a need to invest more in order to explore about the natural resources reserves such as refineries. This is to be done to protect the natural resource from being exploited completely. (Unknown, 2017)
Comparative Advantage:
Trade Partner:
The three main trade partners of United States are Canada, China and Mexico. The trade relation between the Mexico and United States had grown with time. Its specifically grew more after the agreement Salinas proposed to George Bushed agreed on. Thus in 2009, the share of exports to United States from Mexico has raised from 7% to 11.3%.
Growth Share:
After the deep recession of 2001,the economy had started improving. The adaptation of growth strategy of export-led led in the development of high GDP. The high GDP was a result of increase in the exports of automobiles, electronics, textiles and many others.
Oil Exporter:
Mexico had the reserves of oil which was used as the key source as an exporting material for the economic growth. Mexico had been a manufacturer and the exporter of oil since 2000. Other than oil export, the export system of Mexico was considered more advance than some countries such as Chile and Argentina.
Exhibits:
Exhibit 1:
| Strength | Weakness |
| · Geographical location.
· Improved economic growth. · Infrastructure expenditures.
|
· Reliance on the Economy of United States.
· Poor System of education and health. · Complete reliance of export on oil. |
| Opportunities | Threats |
| · Expansion of business
· Enough investment fortourism. · Efficient use of resources.
|
· Worsen Financial Crisis.
· Lack of Data Security and Privacy as well as Intellectual Property rights. · Increase in the cost of labor. |
Exhibit 2:
| Political | Economic | Social | Technological | Legal | Environmental |
| Lower taxation policies lead in the development of high profits.
|
Devalued currency.
Increase in mortgage loans. |
Poor investment in education and healthcare.
Lower birth rate. Increased employment rate. |
More investment in research and development. | Improved legal system by adaptation of NAFTA. | Complete reliance on natural resources.
More investment needed. |
Exhibit 3:
Competitive Advantage:
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