The Anticipated Revenues, Net Income and Growth Rate after Entering the Chilean Market - Case Study Example

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The author of the paper "The Anticipated Revenues, Net Income and Growth Rate after Entering the Chilean Market" states that initiating CVS Pharmacy in Chile is the most favorable choice. In comparison to Brazil and Mexico, Chile’s democracy is rather high, thus, reducing the business’ barriers to entry…
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The Anticipated Revenues, Net Income and Growth Rate after Entering the Chilean Market
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Download file to see previous pages Our focus is laid on introducing an integrated pharmacy service provider to a potential foreign market. The purpose of the business is dedicated to selling prescription drugs as well as a wide range of general merchandise including over-the-counter drugs, beauty products, and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards, and convenience foods. Along with this comes an online shopping portal, which also features an online prescription fulfillment system. The target market for CVS Pharmacy stores consists majorly of women (16-64) and people with medical needs. The countries in consideration are taken from the Caribbean and Latin America covering Mexico, Brazil, and Chile. Mexico Mexico, which is located beside Belize and Guatemala and is 3,141 km from the U.S., is the country in Latin America. In the region of Latin America, Mexico can be regarded as the medium size country and market. Considering the FDI of CVS, we focus on people and society, government, and economy. The population of Mexico is 113,724,226 until July 2011, and the country comparison to the world is 11 (CIA - The World Factbook). Mexico has a high population growth rate which is 2%. In the whole country, 28.2% of the population is between 0-14 years, 65.2% is between 15-64 years and 6.6% is 65 years and over. The median age of Mexico is 27.1 years, for males is 26 years and for females is 28.1 years. The Urban population is 77% in 2008, 78% in 2009 and 78% in 2010, which is increasing now. The poverty rate is 47.0% in 2004, 42.6% in 2006, and 47.4% in 2008. What’s more, the labor force of Mexico is 46.99 million in 2010. We can see that Mexico has a large population and the biggest part of Mexico’s population is young adults. People trend away from suburban to urban because the urban population rate is increasing. On the other hand, the poverty rate of Mexico is fluctuant, which shows the economic situation is fluctuant too, and in these years, the poverty rate is decreasing. Mexico has a civil law system with US constitutional law theory, so CVS Caremark is familiar and legal system of Mexico causing a smaller barrier for CVS to enter this market. And according to the World Audit, the Democracy Audit scores of the political rights and civil liberties are 2 and 3; this means the political policy of Mexico is relatively free. Moreover, the political policies that the Mexican government takes on healthcare industry really influence the pharmacy industry in Mexico. Mexican government tends to extend the healthcare services and will expand the insurance coverage to 102.0 million in 2011. Seguro Popular is introduced to increase the available resources of healthcare and cover 50.0 million people in 2011. This reform really attracts substantial foreign companies and investments to enter Mexican pharmaceuticals market. It is a great opportunity for CVS Caremark to make an entry to Mexico. The GDP of Mexico in 2008 is $1.582 trillion, $1.486 trillion in 2009, and $1.567 trillion in 2010. What’s more, the GDP per capital has the same tendency as GDP. The GDP per capital in 2008 is $14.400, in 2009 is $13,400, and in 2010 is $13,900. Another important part of the data about the economic situation of Mexico is CPI. According to Countries and Economies, using 2005 as the basic year, the CPI of Mexico is 104 in 2006, 108 in 2007, 113 in 2008, 119 in 2009, and 124 in 2010. The inflation rate of Mexico in 2009 is 5.3% and in 2010 is 4.2%. What’s more, the total labor force of Mexico is 46.99 million in 2010. Of that 46.99 million, 13.7% was occupied by agriculture, 23.4% was occupied by industry, and 62.9% was occupied by services (CIA - The World Factbook). In general, the data shows the economic downturn in 2009 of Mexico, both GDP and GDP per capital were decreased in 2009 and the inflation rate of Mexico in 2009 was also very high. ...Download file to see next pagesRead More
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