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Possibility of Exporting ElektroTEK Ham Radios to Brazil
Term Paper ID:27136
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Essay Subject:
Examines the advantages & disadvantages of exporting to Brazil & the potential impact for the company, its home city & state, & the nation.... More...
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3 Pages / 675 Words
5 sources, 5 Citations,
APA Format
$12.00
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Paper Abstract:
Examines the advantages & disadvantages of exporting to Brazil & the potential impact for the company, its home city & state, & the nation.
Paper Introduction:
Possibility of Exporting ElektroTEK Ham Radios to Brazil
James Monroe, manager of ElektroTEK Ham Radios in Encino, California has decided to investigate the possibility of selling his ElektroTEK to South America and wants to know if starting in Brazil would be a good idea. Therefore, he wants answers to two broad questions: (a) what are the advantages and disadvantages of exporting to Brazil, and (b) what would be the projected impact of that exporting on ElektroTEK, the city of Encino, the States of California and the country. This paper will provide answers to those questions.
Advantages and Disadvantages
of Exporting ElektroTEK Ham Radios To Brazil
Advantages
Text of the Paper:
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Mercosur boasts strong short-termgrowth. LatinAmerica weathers the storm. A recent article in the Los Angeles Times describes theeconomy as volatile and heading downward. 3 . Business Week. Kraul, C. The effects on Company, Encino, California, and US Based on other U.S. There will be typical local reaction of both praise and criticism.The company will be praised as a growing entrepreneurial venture. United States Census Bureau. Without Brazil's bid to protect the value of its currency,the real, the fallout could have been even worse" (Kraul, 1997, Nov. "Earnings estimates of companiesfrom Ford Motor to Texas Instruments were downgraded, growth projectionsmodified and expansion plans put on hold as expectations grew that, at thevery least, Brazil was entering a deep recession that will last throughmost of 1998. And whatabout the currency exchange rate? All of the frustrations of trying to export, however, will fadeaway when the first sales reports of ElektroTEK Ham Radios comes in fromBrazil. Therefore, he wants answers to two broad questions: (a) what are theadvantages and disadvantages of exporting to Brazil, and (b) what would bethe projected impact of that exporting on ElektroTEK, the city of Encino,the States of California and the country. Will he gain or lose in that respect?The risk/reward ratio of investing in Brazil is extremely high currently,but it is also marked by volatile swings normal in any developingindustrial nation. Maybe ElektroTEKwill be the one out of 2 companies that try to export products to succeed(Quick facts, 1996). For instance, can ElektroTEK afford the extracash it would have to tie up in inventory to support the venture? (1997, November 5). The fact that ElektroTEK will still be made in California and will notexploit really has no bearing on the situation.The State of California and the Federal Government will undoubtedly reactpositively since the tax impact will be helpful to the state and thenation. (1997, July 21). Thus, the summary of this analysis to Mr. Monroe is positiveenough that he can safely report to upper management that it would befeasible to explore the export possibilities. Business Week International. Emerging markets. Quick facts. Brazil: Anti-trust or anti-foreigner. References Katz, I. The potential benefits of exporting are alwaysrelational to the risks. Possibility of Exporting ElektroTEK Ham Radios to Brazil James Monroe, manager of ElektroTEK Ham Radios in Encino, Californiahas decided to investigate the possibility of selling his ElektroTEK toSouth America and wants to know if starting in Brazil would be a good idea. (1997, September 22). Brazil'spopulation is large enough (a nation of 156 million, estimated 1994) andits work force is estimated at 65 million. Its 1995 GDP was $584 billionUS dollars with a real GDP growth of 5 percent (Katz & Capell, 1997, 48).Its principal 1994 exports to the US, in millions of US dollars, were: DataProcessing ($512); Office Machinery ($378); Aircraft ($279); Motor Vehicles($246); Coal ($232); Television/Radio Parts/Radar Apparatus ($2 2). 48 Katz, I. Los Angeles Times. 159 S3(4). The most obvious advantage is that it could result in an increase insales. are limited, he needsto find a developing country where there is sufficient income and a largeenough population to support his product (Kraul, 1997, D-1). Advantages and Disadvantages of Exporting ElektroTEK Ham Radios To BrazilAdvantagesA. Brazilian slowdown means shake-up inUnited States. This paper will provide answersto those questions. Sissell, K. (1997, November 23). (1996). Since ElektroTEK is a young company in a mature industry and itspossibilities for new market development in the U.S. & Capell, K. Then will come disappointment and frustration caused bythe seemingly insurmountable problems keep coming up. Andother people will criticize ElektroTEK for stealing American jobs, andother groups will probably protest American capitalists exploiting foreigncountries (Katz & Melcher, 1997, 3 ). Theseexports suggest that there is an infrastructure in Brazil that would beripe for exporting the Ham radios.Disadvantages The major disadvantages are these: (a) the decision of what method touse to enter the market, (b) the determination of how much it will cost,(c) studying the laws. 23,D1; Sissell, 1997, S3). D-1(2). companies' experiences, the first impact will be asense of excitement as the possibility of the increased income raiseseveryone's hopes. Chemical Week. & Melcher, R.A.
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