Question

Prepare a Word document of the general background information regarding the country selected (Mexico) e.g., risk elements, with more emphasis on recent events.

In a minimum of 500 words, be sure to include the following:

1. regional transaction exposure and approach;
2. regional translation exposure and approach; and
3. regional operating exposure and other descriptive events or information.

Answer 1

For understanding the specific exposure and approach a regarding transaction and exposure approaches five forces analysis on Mexico can be carried out which would be very beneficial in terms of determining the best available possibilities for Mexico.

This analysis includes the risk elements and Emphasis of available possibilities for businesses which are assessing Mexico as a possible market place .

Five forces analysis on business environment of Mexico.

Political factors

From the political landscape Mexico has been a very critical location. It has faced major changes in its past as well as the changes have contributed in its current state of investment from different foreign countries. Mexico has verified availability of different businesses which requires further investment but the policy is and political instability affects the overall foreign investment in Mexico.

Economic factors

Mexico's economy is directly dependent on the America's economy this dependency on American economy has created a threat of vulnerable dependency on American economy. United States is 29% contributor of the total economy of Mexico which makes it more dependent on United States for revenue generation. Mexico is facing declining external demand which is resulting in reduced economic offence affecting the foreign direct investment in the country.

Social factors

Social demographics of Mexico has been changed a lot over the years. Mexico is not developing better education system for its citizens which is attracting new foreign investment as well as it is also creating positive impact on the external factors regarding investment in Mexico.

Technological factors

Mexico has been totally depending on United States of America for most of its technological advancements. This type of approach has reduced the overall availability of technological advancements for mexico. This is specific approach regarding technological advancement has reduced the foreign investment for Mexico and limited its foreign direct Investments.

Legal factors

Mexico has been fighting various issues in its structure. Their inequalities with America and aggressive nature of American side has been one of the hottest issues involved in the mexican society. These legal factors threaten the foreign direct investment of different countries and reduce the availability of trust as legal instability can cause huge damage on the foreign investment in Mexico.