...Mexico: The Tequila Crisis 1994-1995 What Caused Mexico’s peso crisis of December 1994? Mexico, the Latin American country that survived the huge debt crisis in the 1980’s found itself amidst one of the most viral economic crises that it had ever encountered in its history. The crisis took place under President Zedillo; however, the causes of the crisis are usually linked to Carlos Salinas de Gortari and his outgoing administration. Gortari’s government currency policy put an unbelievable strain on the nation’s finances. In the early 1990’s, Mexico seemed to have established itself as a reformer and was establishing economic development. Domestic deregulation and privatization combined with liberalization of trade and investment led to rapid growth and massive inflow of direct and foreign investments. By May 1994 Mexico falsely believed that there was prosperity in the nation and that it in fact could be a first world nation. The Banks were just lending credit without conducting proper checks or having any accountability and it was widely known that the currency was overvalued and there was economic mismanagement taking place. The situation was not helped and led to a collapse in confidence by several political shocks that took place like the uprising in the South and the assassination of the leading presidential candidate (Gil-Diaz, the CATO journal vol.17 no 3). The government’s corruption caused the increased account deficit fostered by consumer binding and...
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...Assignment 5 Valerie Lagana Strayer University Eco550 – Economics for Managers September 5, 2011 Question: Describe the changing economic variables in China that influenced McDonald’s expansion strategies. The main changing economic variables in China that influenced McDonald’s Expansion were the increase in GDP and the economic stimulus package. In 2007, the increase in GDP showed a level of strong jobs in China as well as increase income for the Chinese (Farnham, 2010). This allowed the Chinese to spend more money on eating out at restaurants which gave McDonald’s a great opportunity for expansion. In addition, the Chinese government had a stimulus package after the economy dropped in 2008. The stimulus package included building more highways which allowed the Chinese to be accessible to the drive through window opportunity that McDonalds was able to offer as part of their expansion. Question: What factors led to the Mexican currency crisis and peso devaluation in 1994? The factors that led to the Mexican currency crisis and peso devaluation were the Appreciation of the exchange rate, falling interest rates, and the foreign savings. The appreciation of the exchange rate resulted in a decrease in savings with an increase in investment due to the expansion of credit without any federal regulations (Farnham, 2010). The falling interest rates were a result of the appreciation of the exchange rate attracting private capital via privatization of banks and free trade...
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...global environment, important risks should be considered. Those risks include foreign exchange risk, market risk, governmental and cultural threats while entering emerging markets, credit-risk exposure when financing its acquisitions with debt, and challenges to constantly produce the right efficiencies to maximize shareholders wealth. CEMEX next move was to continue with its acquisitions program by financing transactions through heavy debt issuing and entrusting (in my personal view, relying to much on it) its “CEMEX way” program in order to reduce costs and increase margins. CEMEX intended to repay its debt with flows that were supposed to produce a higher return than the hurdle rate of every investment. But, in the following years, the devaluation of the MXN to the USD, CEMEX’s hedging operations, and the increase of financial leverage for the 2007 acquisition of Rinker, an Australian cement maker, for USD$17,298 mm, increased its leverage issues. This increase combined with the credit crisis of 2008 resulted in a lack of solvency and a high level of indebtedness for CEMEX. The best way for CEMEX to translate its past success in an increasingly complex business environment is to modify its capital structure by refinancing debt, consolidating operations by reducing costs, expenses, and selling useless assets to increase efficiencies. CEMEX must also focus on its current operations in order to increase cash flows. In the long-term, once the prior issues are addressed, it must acquire...
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...China, Japan and South Korea are the big three in Asia in terms of steel industry. Since 2008 these three East Asian steel giants have accounted for over half of global steel consumption and supplied over half the world's steel. According to the China Iron & Steel Association, China produces about half the world’s steel and exports are on pace to exceed 80 million tons this year Competition between these countries is very tough right now due to the devaluation of the yuan and it will cause the disruption of the steel exports of Japan and South Korea. This is a great move for the Chinese steel exporters because this will increase the export percentage of China for it will lower the price of the Chinese steel which will intensify its demand and supply. Also Japan, South Korea and other countries are worrying about their sales because of the dominance of China. If I am a businessman I would prefer the steel which were from China because I will save more money since the value of the yuan is devaluating and I will grab this opportunity to buy in glut so that I will not have a hard time if I will be needing more steel. As what Tatsuro Kano had stated it could affect the Japanese market in terms of imports from China because more businessmen will patronize the steel from China since it’s cheaper than any other steel. In my own opinion, I think there are some points to consider; First, for me it is a very strategic move of China to defeat it competitors because the value of their...
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...a House? Mr. Zou, who did not get married until he bought a house when he was 35 years old, sold his house last year and earned an extra profit about 200,000 RMB. In China, much more men did not get married because they did not own a house; however, housing price keeps soaring. According to National Bureau of Statistics of China, from 2001 to 2011, during the 10 years, the average selling price of commercialized buildings in China has increased 147% from 2170RMB to 5357RMB per square meter, especially in metropolitan cities like Beijing, Shanghai which increased 243% and 310% respectively. Nowadays, most youth and their parents in China are concerned about the price of apartment and hesitate to buy it; however, during the hesitation, the price has reached a high record. In my opinion, Chinese men should not only buy a house but purchase it as soon as possible because of the impact of traditional custom, fierce marriage market and the best investment strategy. To begin with, if people especially men want to get married; they would better possess a house at first because of the traditional customs. Confucius, who was born in 2500 years ago, was a philosopher of the Spring and Autumn period of Chinese history. The philosophy of Confucius has a great, deep and persistent impact on each generation in China until now. One of his most famous proverbs is “to rightly govern the state, it is necessary first to regulate one's own family” (Dawson, 1915) which in Chinese, means the man...
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...able to buy her every single Barbie she wants. We’d like to make fun with her adult-like behaviors and of course are not very serious about what she is really saying. However, children don’t tell lies. What she has said reflects a devaluation of marriage in Chinese society. Marriage should be a pure love match; however, it has somehow become an artifice of gaining wealth. Through the tabloid culture, such as the Chinese reality televisions dating show “If You’re the One”, our moral judgment has been imperceptibly influenced because of media’s lack of social responsibilities. Does wealth really place a better role in a relationship than happiness? The answer is definitely negative. We have a long history of arguing what marriage really means to human beings. “In most culture of the past, marriage wasn’t about the happiness of two individuals – it was a political and economic arrangement between two families. Marriage was a way of consolidating wealth, merging resources, forgoing political alliances, and even concluding peace treaties” (Cherlin, Andrew). As time pass by, the rise of individualism changes our view of marriage. We expect the fairness and pleasure in our marriages. It is a huge advancement in human right progress. In China, however, people still consider the economic status as an important part of choosing their partners. The traditional idea of marriage tends to hold people back. Media, as the major influential power in the modern society, should lead...
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...bronze and the vase was covered with dragons and toads. A long medal pendulum hung inside the vase. On the outside it had eight dragon heads; each was mounted onto its sides. Each dragon had a ball in its mouth and the dragon’s head was mounted onto its side as well. The pendulum swung in the direction in which the earthquake occurred. The pendulum would strike a rod inside the vase, the rod would then knock a ball out of the dragon’s mouth, and then it would drop into the toads’ mouth. The direction, in which the earthquake was going, was the direction the ball would come out in. The Chinese needed this invention because China had experienced a lot of devastating earthquakes. The Chinese provided help to the victims of the earthquake if they were able to tell the direction that they should go with the supplies. During the time period of Ancient China, there...
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...mid-twenties, Sears switched its target focus from “only the farmer” to “both the farmer and city population”. The reason is that the low-income groups desired to buy the same goods as the middle and upper class. The country was becoming one big homogeneous market. And Sears noticed the trend and was aware of the consumer shopping habits, so they made changes accordingly. This strategy made me think of Starbucks in China. The consumer of Starbucks in America is almost for everyone, but in China, the target consumer is mostly for the wealthy upper and middle class. College students won’t pay 30 yuan for a cup of coffee because they can buy 6 bottles of CocaCola instead. Starbucks was really smart when they decided their target consumer in China. Since coffee is still not a common drink for Chinese, carrying a cup of expensive Starbucks is seen as a symbol of success or some little personal luxury for the middle class. Starbucks premium pricing strategy fits the market demand very well because the middle class and affluent consumers are growing, which means the market of Starbucks in China will be huge in...
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...CIS610-Foundations of Management Information Systems Case: Netflix Leading with Data: The Emergence of Data-Driven Video Question: What advice would you give to the CEO of Netflix? Ruohua Cui, Yang Cheng, Tien-Ni Kuo, Yitian Ren Digital distribution market is undoubtedly the future of the video rental industry. Netflix has already taken a good lead in it but must have fresh ideas to keep its advantage in the industry. Beating its competitors in the domestic market is important, however, Netflix should jump out of its own circle into a new market to gain the first mover advantage. Looking at the global market, China is a good choice for Netflix’s next station. Using the Porter’s Five Forces model, Netflix can examine its advantages and disadvantages see whether entering China is good choice: * Bargaining power of customers China has a growing economy with a large group of new middle-class, who are able and willing to consume on entertainment. Nowadays, Chinese usually watch films on free websites with a low picture quality and slow Internet speed. While the number of people watching films are increasing, the picture quality is becoming more important for the viewing experience. Providing a fast, flexible and high-quality service, Netflix can persuade many customers into its subscription model. * Bargaining power of suppliers: China’s film and TV show makers have been facing a major problem: plagiarizing (including unpaid online watching), which substantially...
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...Sabrin Zawahrah Professor Hamai English 101 1 July 2013 Fight Back Tradition, culture, respect and honor are the ideals that shape the Chinese civilization. Coming from a Chinese immigrant family whilst living an Americanized life, Kingston reveals the idea of gender being an important role in both cultures. In her story "No Name Woman" the author describes some of the gender roles and expectations both woman and men had to abide. Kingston uses a unique story told by her mother as an example. As she begins her article the author dives right into the story. Kingston retells only the information she is passed down secretly by her mother. Although the author is a Chinese-American she does not know the culture or what comes with it. To learn about the woman her aunt was, Kingston had to make due with her mother's words. The author begins to pick apart the story to find out just who her aunt was and what drove her to her demise. Because Kingston cannot ask about her unnamed aunt, she invents her own fantasies about why her aunt gave in to her forbidden passions. In the passage Kingston establishes realities between being a woman, displays the oppression of the male dominance the culture embodies, and the struggles that women have to go through to fight back against subjugation in all forms. To learn who her aunt was, Kingston must first learn what was the standard held by Chinese women at the time. From the beginning of "No Name Woman" the author depicts...
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...Singapore is the district that most of its Chinese residents that use Chinese language as a second language. And there must be some differences between the two Country’s Chinese Curriculum. But after several comparisons, the author found that there is no much difference between the two Countries of its general objective of Chinese Curriculum. They not only put more attentions on the language basic skills training but also lay stress on critical thinking/moral values/Chinese quality and Chinese culture. Therefore, in this dissertation I will analyze part of the language phenomenon in the Singapore Chinese textbook and its arrangement as the starting point. And put them in comparison to find out the similarities and differences. Keywords: China；Singapore；Primary School Chinese Textbook；Comparison 引言...
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...How should you handle the introduction, greeting, and handshaking? The female boss should enter the room followed by myself. We will both be wearing neutral colored conservative dresses with flat shoes. The Chinese businessman will introduce himself whom my boss will respond to with “Hello, we are pleased to meet you” and begin to formally introduce herself as Manager Johnson and myself as Mrs. Fowler. I will not attempt to introduce myself as it would be considered rude. We will wait for him to initiate a handshake at which time my boss will first shake his hand gently and then myself. How do you exchange business cards? Following the introduction it is expected exchange of business cards. It is important to have business cards that are printed on sides; one in English, the other in Chinese. These should include: Company Name, Personal name, title, fax and email. They should be clean, neat and printed in gold lettering. The exchange will occur one at a time standing up and holding the card on the corners with both hands with the Chinese side up. You will hand your card carefully showing him respect, you will show the same respect when accepting his card. Once I receive the card I will need to study it prior putting it on the table, showing interest by reading the details; if I had collected more than one business card, I would line them up in vertically in order of seniority going down on the table (NBC Universal, Inc, 2008). The culture coach informs me that they should...
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...Tang, and Song Dynasty. Well during the period of the dynasty that China was unified again when Young Jian a member of aristocratic family from northern china founded a new dynasty known as Sui. The Sui dynasty started 581 and ended 618bit was founded by Sui Wendi or Yang Jian. The major changes that occurred were reduce the rich-poor social gap, enhanced agricultural productivity, equalization system and have the governmental power centralized. The defense was improve and great was expanded and Buddhism was spread. When Yangdi took over the throne he didn’t seek to gain support from nomads. He restored Confucian education and examination system of bureaucrats. Yangdi lost support of nomads by supporting educational forms. Yangdi start expensive construction work. Yangdi luxury expense lost him public support and he was assassinated by his minister, but the biggest factor that led to the down fall was invadation of Goguryeo. Li Yuan took advantage of the situation and declared a new foundation dynasty known as Tang. The Tang dynasty started from 618 and ended 907 it was founded by Li family who gain power during the collapse of Sui Dynasty. According to Chinese history records The Tang dynasty was the greatest historic period in China. During this time period the economy, politics, culture and military strength reached an unparalleled advanced level. Tang dynasty experience a wonder of change in China culture by modern feel that era represents the apogee of Chinese creativity...
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...Case Analysis: DMG- Shanghai GM598ON Spring A 1. It is obvious why guanxi and guanxiwang are so important in China. The people are very focused on connections, and building relationships with people. When you have a culture that is that focused on that, it would be illogical not to. I was always brought up to never burn bridges and build good professional relationships, because you never know when you might need a favor. By building the relationships they did, they were able to film in the Forbidden City. That was all due to the fact that the company respected the Chinese culture and religious beliefs. That would have never happened, had they not been sensitive to those aspects. Building relationships is essential to operating a successful business. I know when I sold advertising I would have never had repeat clients had I not taken the time to build good respectful relationships with them. 2. If a company was to go in to China and try to obey all of the rules and regulations they would be eaten alive. There is no way they would be successful. It seems like the only real rule that has to be followed is guanxi. Rules and regulations can be bent when there is a great working relationship and respect from both parties. Obviously, the company is very attentive to that and takes it very seriously. If a company came in worried only about the rules and not the people they are interacting with, they would essentially be booted out of the country. 3. I would think that...
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...VanillaLemon Article Review and Analysis ----The Secret of Starbucks’ Success in China The current event article I found tells about the successful marketing strategies that the Starbucks Corporation takes to enter into the market of China, and simultaneously the problems and difficulties it has in the process of market expanding. The Starbucks Corporation is the global leader in specialty coffee consumption. Arising almost overnight from a market in Seattle, Washington, the company today provides quality premium coffees with a superior level of customer service and at a premium price, around the globe. Starbucks is an excellent example of a company that has successfully embraced a differentiation focus strategy tailored to providing a high quality, focused product, of which, for the company customers, price is in essence, no object (Isidro, 2004). Based on the stateside success, Starbucks begins to expand its international market. Additionally, the current coffee consumption of China is much lower than the average level in the world, therefore a huge commercial space existing there. Starbucks realizes this great development potential, hence it hopes to make China becomes the largest international market except U.S. in the future. However, this is a big challenge for Starbucks Corporation, and therefore the article analyzes the SWOT and 4Ps strategies of Starbucks by taking this entering into China’s market as an example. Besides, the article also summarizes the major problems...
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