Jordan
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1. The Economic Environment: According to the CIA World Factbook online, Jordan is a small Arab country with inadequate supplies of water and low levels of natural resources such as oil and gas. Debt, poverty, and unemployment are fundamental economic problems in Jordan. Jordan's ruler, King Abdallah, has undertaken some broad economic reforms in an effort to improve living standards. The main economic and political challenges facing Jordan include the need to reduce the nation's dependence on foreign grants, reducing the nation's budget deficit, and creating incentives for foreign direct investment as a way to promote job creation. According to the Central Intelligence Agency, the following economic factors exist in Jordan:Gross Domestic Product per capita was estimated to be $4,500 (USD) in 2004 30 percent of Jordan's population lives below the official poverty line Jordan has a population of approximately 5.75 million people in 2005 There are approximately 1.4 million people in Jordan's labor force Jordan's official unemployment rate is 15 percent, but according to the CIA website the unofficial but more accurate estimate of the unemployment in 2004 was 30 percent or more. The lowest 10 percent of Jordan's population earn just over 3 percent of the total household income The highest 10 percent of Jordanians earn approximately 30 percent of the total household income Jordan's consumer price inflation rate is a modest 3.2 percent
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Dell might use its cost advantage resulting from its partnership with the government of Jordan to undercut its competition and create a quasi monopoly for new PC sales in Jordan.
2. There are a number of costs that would influence the price for Dell computers manufactured in Jordan. The most obvious is the price of the raw materials including but not limited to printed circuit boards, random access memory, the PC's central processing unit, and motherboard. Another cost would be the cost of accessories such as compact disk players. Other costs that would impact the price of Dell PCs manufactured in Jordan would include direct labor costs; taxes; and import duties or tariffs.
3. Pricing activities could also be impacted by demand for product generated as a result of government activities that could make it easier for Dell to manufacture and to sell PCs in Jordan as well as with Jordan's closest economic trading partners. Jordan is a participant in one or more multilateral trade agreements with neighboring countries. Assuming that products manufactured by Dell in Jordan were covered by these agreements, demand for Dell PCs across the Middle East could conceivably grow to the point that Dell would need to increase the price o
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Approximate Word count = 2246
Approximate Pages = 9 (250 words per page)
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