GM in Peru
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Above all, General Motors remains committed to using an international competitive strategy that will allow it to compete with Ford, Toyota and Volkswagon outside the United States, “Overseas, GM has embarked on a massive capital expansion plan. Long used to being No. 1 at home, the company plans to catch up with rivals such as Ford, Toyota, and VW outside North America. Over $2 billion has been committed to new plants in Austria and Spain and new matrix forms of management have been introduced to help speed the rationalization of production needed to gain economies of scale and to help the development of a world car and truck,” (Stopford, et. al., 1980: 436). This analysis will discuss the recent changes in Peru’s economic history that allow General Motors an excellent opportunity to invest in this expanding market. Also included will be a description of the products it will offer, a marketing strategy for doing so in Peru, a profile of the Peru auto industry and an analysis of the competition GM will face.Many changes in the Peruvian economy have allowed for Peru to be a primary target for increased investment by GM. Traditionally, Peruvian economic history was one of chaos and near collapse. Until President Alberto Fujimori was installed in 1990, the Peruvian economy was on the brink of disaster, “The new administration inherited an economy near collapse, without external credit markets, characterized by hyper-inflation
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less stringent. In addition to these changes, a foreign firm that has invested in Peru is now allowed to have 20% of its staff be comprised of foreigners, as opposed to the 10% restriction under previous governments. Further, exports between the U.S. and Peru have increased due to a favorable exchange rate and more liberalized trade policies, “U.S. exports increased in 1991 to $840 million, almost 22 percent over the 1989 level. The United States maintains its position as leading supplier to Peru with a market share of 26 percent,” (Zeiger Hatfield, 1992: 25).
Thus, one can see that the new changes and liberalization in the Peruvian economy mark a dramatic change from the years under the Allende regime. There is no longer a great risk of foreign investment in the market, and U.S. agencies, like the Export-Import Bank have insurance programs that are offered to foreign investors in high-risk markets that can be secured as a means of off-setting any doubt about future commercial, political or economic changes in Peru. None the less, General Motors needs to invest in Peru, especially since, among the best export products for Peru, according to the experts, are automobile parts and accessories. The competition is already in
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Some common words found in the essay are:
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Approximate Word count = 1804
Approximate Pages = 7 (250 words per page)
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