Reference no: EM13316341

-mode of entry - (why this one over the others), risk vs return

-how exactly will we enter? (similar to above, but exactly how will be go about it)

-how it is in line with short term/long term goals, competitive analysis.

-talk about market conditions - import/export regulations - tarrifs..ect - why they favor our mode of entry.

Climate and Geography

Peru has a tropical climate with a wet and dry season. The country is composed of 3 main regions,which are the coast, the mountains and jungle.

The coast has a warm-temperate climate. The south coast, due to a high humidity, has extremely low temperature during winter and reaches only 30 degrees during the summer but the north coast is hot almost all year long. This area is yearly affected by fog.

The highlands are the mountainous region of Peru, where the Andes Mountains are located. During the winter (November to March), it rains heavily and temperatures can suddenly drop from 24°C to -3°C.

The jungle is located in the east of the country; it is Peru's largest region. It accounts for roughly 60% of the country. It is made of plains covered by vegetation in the Amazon River basin.Here there are two distinct seasons; from November to March, it rains frequently and it can be very windy, while from April to October it is fairly dry.According to the map below, the jungle is the rainiest region of the country with an average annual precipitation of 2,000 to 7,000 mm. In comparison, Montreal, in 2011,had a yearly average precipitation of 1,000 mm.

Moreover, Peru is a region facing a major seismic activity, with as many as 200 minor earthquakes (m.1 or greater) occurring on average each year and 14 occurred during the last month according to eartquaketrack.com. Earthquakes happen because of the interaction between two tectonic plates along the west coast of South America.The Nazca Plate, located in the eastern Pacific Ocean, meets the continental South American Plate and it's causing an oceanic feature known as the Peru-Chile Trench. The Nazca Plate is also leading to other possible natural disasters such as volcanoes eruption or tsunamis.

The region that looks more appealing for developing our product is the jungle. This region that is the most prone to experiencing minor earthquakes and it is facing the most rainy and windy days per year. Our product, which is further explained below, will be competent there as it is water resistant, fire resistant and has a bending capacity exceeding regular quality. Bending tiles are effective when it comes toresisting earthquakes, as they don't break. It could help the population as, according to goperu.com, the country is still lacking competent housing infrastructure resistant to earthquake as some houses are still made of mud walls in the poorest regions.

Economic Situation

The Peruvian economy is one of the fastest developing economies in the world, having experienced an average GDP growth of 5.6% over the past five years. In 2013, Peru's GDP had grown to 344 billion dollars, with a real growth rate of 5.1%, and a GDP per capita of 11,100$. The country's public debt has also decreased by 1.5%, totaling a value of 14.9% of the 2013 GDP. (could we maybe take data to compare it with the region)?? Inflation in Peru also remains relatively low at 2.9%.

Peru has continued to move in the positive direction as the percent of the population living below the national poverty line has dramatically decreased since 2004, from 58.7% to 25.8% in 2012. The country currently boasts a workforce of 16.16 million with a fairly low unemployment rate of 3.6%. Over half of the labour force (56.8%), are employed in services, whereas 25.8% work in agriculture and 17.4% in industry.

Peru is abundant in natural resources, and occupies the title of "the world's second largest producer of silver and third largest producer of copper". As such, metals and minerals account for an important portion of the country's GDP and represent approximately 60% of Peru's exports. Consequently, Peru's economy remains vulnerable to changes in the value of the world's metals and minerals. The high prices of Peru's metals, is one of the contributing factors for the country's continued growth within the past few years.

https://www.cia.gov/library/publications/the-world-factbook/geos/pe.html

Population, culture and general trends:

Peru is a growing country economically and it has been characterized lately by its openness to FDI. It has a large population estimated at 30.9 million in 2013, it is the fourth most populous country in South America, with Lima, Arequipa and Trujillo as the main cities that form important commercial and transport hubs for food, agriculture, textiles and light manufacturing. One great indication of an economy's performance is the level of unemployment rate, which in Peru's case has declined to 7.4%.The middle class is steadily growing and the demand of consumers is becoming more diverse for all sorts of products and services. The consumer expenditure per capita is growing and is predicted to rise by 5.4% in 2014 and will represent 63.6% of the GDP in 2014. The number of households is also increasing considerably since 2008, and has reached 7788.7 (000's) in 2013. The urban population is increasing aswell and reached 23671.7 (000's) in 2013. This is definitely a very attractive fact for our product's deployment. Peru has a variety of strengths, which make it appealing for Foreign Direct Investment. First, the mining sector;because it is the third largest country in South America, its resources are very diverse. Thiscould be used in favour of our company as production could be easily done in Peru. The country is also dominant in natural resources. It is ranked globally 5th in the production of gold and it is amongst the top five producers of lead and zinc. The hydroelectric potential of Peru is particularly good because of the geographic location; there is an important presence of large powerplants that are built on the Santa and Mantaro rivers. Also, ecology is becoming very important for the country because they are open to systems that are less pollutant and more protective of the planet as 3/4 of the electrical energy is produced from hydroelectric sources. Peru is pursuing the development of natural gas, as it wants it to become one day the most accessible resource available in the country. On the other hand, there is an important distinction of social classes as in any 3rd world country.One can distinguish a very big gap between the rich and the poor. The rich own more than one house and are willing to spend a lot to make their lives very comfortable. They are very influenced by the west while the poor have to handle more than 2 jobs to allow their families to live a decent life.

www.portal.euromonitor.com.mercury.concordia.ca/Portal/Pages/Search/SearchResultsList.aspx

https://www.britannica.com/EBchecked/topic/453147/Peru/28053/Resources-and-power

Reasoning for choosing Peru

When expanding into a foreign country there are many variables that have to be considered. One must consider and analyze the economic and political outlook, general infrastructure, logistics, and even the cultural aspect of the foreign country. All those variables have to be compared to the product and the company's goals, to make sure they match. For the purpose of this project, we believe Peru represents a great opportunity for GR Green to expand and start building an international presence.
Amongst the many reasons to choose Peru, one of them (and the most critical one) is that Peru has been doing great economically. The general trend has been lower unemployment rate, increasing GDP, and decreasing public debt. Furthermore, forecasts have stated Peru will be the second fastest growing economy in the world in 2014-2015. The first place is occupied by China. The same study forecasts that the country will grow even faster than the Southern Common Market (Mercosur) and the Andean Community (CAN). Finally, as stated before Peru has proven to have a variety of natural resources and energy production. This would definitely help production in case GR Green decides to move it to Peru.

Another reason for choosing Peru is the geographical location of the country. It is located in an area where earthquakes happen frequently, which makes our product particularly appealing for the area. The roofs that GR Green offers can easily bend, aside from being resistant to heat, winds and cold weather. In regards to this more details will follow.

Finally, in terms of logistics we believe transportation, communication and the establishment of GR Green in Peru wouldn't have many obstacles. As previously mentioned, China will likely be the first fastest growing economy in the world. However, communication, customs, and foreign investment might be much harder. Contrarily, Peru has shown great interest for FDI and over the last 15 years there has been a significant increase of investment in the country (except for 2009, which was due to the recession). As a matter of fact, in 2012 FDI increased by 49% with respect to 2011.

References

https://www.peruthisweek.com/news-peru-named-second-best-for-business-in-latin-america-102433

https://www.andina.com.pe/ingles/noticia-peru-records-highest-latam-fdigrowth-eclac-says-458653.aspx

Overview of GR Green

GR, green building product incl. is an eco-friendly organization focused in manufacturing of eco- roofs and other related elements. And their major market in North America, they are also providing most affordable green products to the customers. As per the Canadian construction material centre, it named as the first manufactured green products in Canada. The main advantage of GR is that they are not having any wastage during the process of production. 100% components are recycled. It also help them to provide eco-friendly and economical products to the customers.

Compared to the competitors the GR roofing products have long life of fifty plus years and maintenance cost is zero. The company also provides fifty years of warranty to the product and it is a user friendly product. In the year of 2012 the company won the company won the green construction award, for the best eco-friendly manufacture and for the distribution eco-friendly products to the customers. The main raw material used for the production is recycled plastic and limestone. The team GR is led by Geoff Wensel, president who is expert in green manufacture and in the process of green certifications. And Geoff is supported and assisted by Robert Suggit vice president, who has experience in more than 25 years in research and development of innovative products. The marketing division is handled and controlled by Natalia, who is an expert in strategic planning.

Now the company are thinking of future expansion, with an eco- friendly and in expensive product, GR already captured the market share. The company is planning for future expansion and to increase the production capacity, GR also focused on the strategic move of manufacture under license, thinking about company owned plants and establishments. While the customers turned to the eoc- friendly products with less cost, the future and growth of GR is demanding