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Mexico and International Marketing

Today's economy is a global economy with companies based in the United States selling products in Europe that were manufactured in Mexico. Where international marketing was once the exclusive domain of large conglomerates, computer technology and telecommunications now make it possible for even small companies to enter the international marketplace. Another key factor in the growth of international marketing is the ability of financial institutions to be able to handle transactions conducted in various currencies, which facilitates international trade, but which also exposes companies to greater risk than if they dealt in a single strong currency. Today's international competitors must be concerned not only with the marketing potential of the product, but with the financial situation of the destination country and the risks to which the company will be exposed from a foreign exchange standpoint. This research examines one popular market for American goods, Mexico, considers the foreign exchange risk that companies face when doing business in Mexico, and offers recommendations on how to minimize that risk.

The problem of foreign exchange risk in Mexico is not insignificant. The Mexican currency, the peso, is not strong relative to other major currencies (including the American dollar, the German mark and the Japanese yen); as a result, the value of the peso fluctuates in relation to these other currencies, and sometimes with great volatility: events in 1994 and 1995 led to a devaluation of as much as 54 percent, a situation which produced serious financial consequences in Mexico. Since that time, however, the nation has taken steps to reinforce investor confidence both in the nation as an attractive investment opportunity and specifically in the peso. Nonetheless, the peso remains a floating currency which could suffer again in the wake of a serious loss of investor confidence. This is the situation that faces international ...

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Mexico and International Marketing. (1969, December 31). In LotsofEssays.com. Retrieved 21:22, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1687516.html