Mexico - Case Study Example

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In a business concern, strategy formulation and implementation is essential as it helps in defining direction and action plans as well as prioritize business activities. In this context, strategies can be categorized as functional strategy, business strategy, corporate strategy…
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Download file to see previous pages Large numbers of multinational automobile manufacturers are either shifting their base from Canada to Mexico or are limiting their operations in Canada and expanding the same in Mexico (Althaus “Mexico Sets Auto Production Record, Aims for More”).
Mexico has gained significant attention of automotive producers, as a result of several factors that deliver geographical and other competitive advantages to manufacturers. These advantages include extremely low wage rate, free trade agreements with approximately 45 countries across the globe, well-developed transport system with year-round ice free coastal ports and high level of financial incentives from Mexican government. Owing to these features, global automakers announced investment of $7 billion in Mexico as opposed to $750 million in Canada. Mexico’s stable and lucrative business environment has caused most automakers to adopt global strategy for business expansion (Keenan “Mexico races ahead in auto industry as Canada stalls”).
Contextually, it is imperative to comprehend the distinction between international and global strategies even though they are frequently used interchangeably. These differentiating factors are degree of central involvement and coordination in strategic activities, degree of standardization in products and responsiveness towards local business environment and strategic integration and competitive steps. Since internationalization in Mexico is mainly about achieving competitiveness in production and operations, almost all companies adopt global strategy (Twarowska and Kakol 1005-1011).
Under the purview of global strategy, most automakers ensure and exercise central control over production in Mexico and as automotive industry is about ensuring standardization in products, global strategy is most effective herein. Unlike international ...Download file to see next pagesRead More
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