Question

Consider a study of doing business in Mexico. How do the economic, cultural, social, and political climates affect a business there? Describe Mexico’s form of government. How are business relations conducted there? Are they more or less formal than in other Western countries? Describe how Mexico’s policies toward trade and investment have changed over the years. Do you believe that Mexico provides a stable climate for trade and investment? What products or industries would seem to do well in the Mexican market?

Answer 1

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.