Question

During the past year, Argentina has struggled with high inflation rates (~45%) and a depreciating currency, with the peso losing around 50% of its value vis a vis the US dollar. The central bank’s bench mark interest rate is currently 60%. Early data suggests that Argentinian real GDP growth will be negative in 2018. The CEO of a small Canadian company sees this economic crisis as a potential opportunity to expand into Argentina, by acquiring a local company at low cost, financed by borrowing in pesos. Knowing you have just completed an MBA economics class, she asks you what you think of the opportunities and threats the current economic conditions in Argentina might create for her plan. What would you tell her

Answer 1

The first will be to look at the SWOT analysis of the firm as it will derive the key to the performance of the company and its relevant particularly in the crisis down SWOT provides the road map to the business and plan for future.The financial crisis also will indicate some strength like having control over the expense,showing creativity of how to manage effectively,active in the market to bring a new product with confidence,fair pricing and providing quality products.when its the weakness it will focus on the lack of staying power in the economy where the trust is gone low and too much of debt.The opportunity has more fields to it such as opening up to new customer needs sell new products and services.some customers will turn to new products and services when they are not satisfied with the old products and services this is the time to fill the gap and create long term and short term opportunity.There are also threats in the market unwillingness of the customer to not buy the products is the most dangerous in the market as it causes financial crisis.hence pricing matters and it should be restructured to frame a new market for the users and make a Difference in the present market.