Xerox Essay, Research Paper

COUNTRY ISSUES

Culture, Social, and Demographics:

When analyzing any company and their possible enlargement into new markets you must first analyze the civilization, societal, and demographic issues impacting foreign concerns. The Colombian civilization has begun to demo a prejudice towards American merchandises every bit late as 1998. As written in Carol Casper s New York Times article, There is a batch of involvement in U.S. constructs and merchandises & # 8230 ; in non merely Colombia but besides all of Latin America. The involvement has caused more American houses to get down to see these developing attitudes and expand their concerns into Latin America. For Xerox to besides take portion in this enlargement they would be able to take advantage of the new involvement.

Colombians, although, are non welcoming these companies with unfastened weaponries. There is an involvement in the U.S. concerns but as Dianna Jean Schemo studies ; it is non uncommon to be threatened by the trusts of Colombia. These trusts want in on the influx of money and will acquire involved in snatchs and liquidator if they see it necessary. In 1996, the last twelvemonth these figures are available, the Federal Bureau of Investigation reported 19,645 homicides while in Colombia there were 26,627. For the fright of being on the incorrect terminal of such cases American concerns need to be excess careful when seeking to perforate the Colombian market place. Xerox would non be as impacted by the menace of trust intervention. The trusts become more involved with eating houses and oil companies that have developed in Colombia. They have non developed any involvement in the engineering industry as of yet.

Colombia has a population of 37 million Spanish-speaking people. The one-year growing rate is 1.7 % and 95 % of the population is Roman Catholic. In the urban countries a 93 % literacy rate was found, as opposed to a 67 % literacy rate in rural countries. This is due to the fact that merely five old ages of primary school are offered in rural countries. This information sing the population is promoting. Although the rural population s literacy rate is low, the urban rate is rather high for a Latin American state. This rate leads me to believe that for Xerox to spread out in this market with its technology/communication equipment would non be a job. The bulk of the targeted population where Xerox would be selling their merchandises could understand the benefits of their merchandise and would desire to buy Xerox merchandises.

Political/Governmental Concerns:

Colombia has both political and economic stableness that is uncommon to Latin American states. Colombia besides enjoys low rising prices as compared to other South American states. The authorities of Colombia is a unitary democracy, made up of an executive subdivision, National Congress, and Constitutional Court.

The authorities creates economic and societal development programs yearly. The executive subdivision of the authorities is responsible for organizing the programs in item. There is a trade barrier that must be registered with Incomex ( official foreign trade establishment ) . Payments of unseeable imports such as acquisition of engineering must be paid to them. The interaction of the authorities with economic and societal issues will assist Photocopy to spread out into this state. By Colombia holding an Americanized authorities system in topographic point that has become stable, it will greatly assist foreign states to go interested and to put in this state.

Colombia attempts to besides keep and promote foreign investing. The regulative clime consists of National Planning Department, Central Bank, Ministry of Mines and Energy, Banking Superintendency, and Securities Superintendency. Foreign investing is permitted in all economic activities except those related to defences or national security, and unsafe garbage. This deficiency of limitations enables Xerox to freely travel in and set up itself in Colombia.

Restrictions on goods imported to Colombia are minimum. The procedure involves fixing a pro forma bill, set uping an import enrollment at Incomex, transporting the goods with a concluding bill, chlorine

earing imposts, and remittal of payment on the currency of the exporter or in U.S. dollars through an authorised exchange mediator. Again the deficiency of limitations would let Xerox to come in the Colombian market with few barriers.

Macroeconomic issues:

In Colombia there are macroeconomic conditions that could impact Xerox and our determination to spread out to the state. Since 1995 Colombia s GDP growing per centum has plummeted. In 1995 it was 5.7, down to 2.1 in 1996 and in 1997 it fell farther to 2.0. This tendency is rather dismaying for non merely Xerox but besides other states that wish to spread out their market to Colombia.

Colombia besides has an unemployment, which has steadily risen since 1995. The unemployment rate was 9.5 % in 1995 so 11.3 % in 1996 and eventually 12.2 % in 1997. This happened while the labour force rose in these old ages by 366,000. This will assist us to be able to happen workers but whether or non they are capable employees in the engineering industry is yet to be seen. If the employment has occurred in the agribusiness instead so in the urban country there is a better opportunity that the unemployed could be illiterate.

Ad is besides an interesting topic. At least 50 % of programmed advertisement wide dramatis personae on telecasting must hold local content. It is besides required to hold usage of a Colombian hallmark in order to exert hallmark protection in Colombia. These policies seem antiquated as compared to those of the United States and should decidedly be addressed. As a company Xerox must find whether they can acquire a Colombian hallmark foremost and so whether they can publicize while affecting local content. Ad is a cardinal portion of our success in Colombia so these factors are of cardinal importance.

Exchange Ratess:

The Colombian Peso has remained comparatively stable in the past few old ages. This historic stableness has been highlighted late by a strengthening of the U.S. dollar every bit compared to the Colombian Peso. At the terminal of March 1998 the period chief exchange rate was 1,358.03 Colombian Pesos equal $ 1. This figure has systematically been increasing since early 1997. This is appealing for us as a possible investor. With our U.S. dollars we can acquire more Colombian Pesos for our money. From past informations it merely seems that this tendency will merely go on so investing with respects to interchange rate issues is assuring.

FIRM & amp ; INDUSTRY ISSUES

Firm s Current Financial Condition:

As Xerox we have developed from the Copier Company to the Document Company. This transition has taken us into newer and expanded markets. At year-end of 1998 our gross was $ 19.4 billion. Of this gross the United States accounted for $ 10.1 billion, Europe and other states accounted for $ 5.8 billion and Latin America and Canada accounted for $ 3.5 billion. These Numberss show the international involvement that Xerox has pursued late. In this chase, nevertheless, Xerox has maintained its strategic purpose in being the leader in the planetary papers market, and supplying document solutions that enhance our clients concern productiveness. We plan on making this by supplying planetary papers solutions that bring together our leading-edge engineering, the widest array of digital hardware in the industry, sophisticated package, services, squads of industry-focused gross revenues representatives and advisers, and a turning web of indirect gross revenues channels.

Demand conditions:

Current Rivals in the Industry:

Production Costss for the Industry:

Duties and Trade Restrictions particular to the Industry:

Xerox is forced to cover with Colombia s trade limitations if we want to spread out to this state. Colombia imposes a 7 % revenue enhancement on merchandises other than nutrients and basic medicines, along with a revenue enhancement on income unless it stays in Colombia. The blunt of Colombian limitations on imports, nevertheless, lies on the agricultural terminal. Due to this Xerox after registering with the authorities can have comparatively small opposition from the Colombian authorities to put in the state.

312