1. Why do you think Coes was successful in United States?

Could they translate its strategy to Mexico and succeed? Justify why. Based on the case study, Coes has opened at least 1,000 stores and their strengths are showed in many situations. For the example is at the early paragraph where Aubrey the store manager of Coes in South Tuscan tell the CEO that they already have over 100 customers even though just open less than a month. Its shows that Coes company is already well-known in local market. Besides that, have good staff also one of the strengths of the company. It can be seen how Aubrey fostered immediate trust with their customers and from the conversation Stan with Carmen at Circle K about she get everything furniture from Coes services.. Coe does also have strength in systems of service. Being always emphasized ownership make their different from the other competitors in the same industry such as Mr. Rental. Coe's offered a monthly payment schedule and a shorter contract period (12 months versus four or five years), which meant higher fees each month but a lower cost of the eventual purchase. More than half of its customers became owners by the end of their leases compared with 25% for Mr. Rental. Coes managers also have been trained to approve agreements only for people who could afford. However Coes can translate same strategy to Mexico and many of the advantages expand to Mexico than the disadvantages. Coes already have someone that can handle be the store manager there. Aubrey is willing to go down and train the staff at Mexico. He also knows speak Spanish and his wife was Mexican. So finding the right personnel problem like what they have faced and failed due a venture into Puerto Rico a few years before already solve. Coes services already known by the people in Mexico so they already can create demand before enter the market. Its show in when Carmen said You need to open a store in Mexico! My mom is down in Hermosillo. She cant believe all the things we can get up here. Plus free delivery, free repairs. Shes telling all her friends about it. There also nothing that produces like Coes services. The biggest company Wal-Mart is only take cash or credit. There were no competitors at all and Coes can monopoly the market industry. Their Spanish language campaigns 'Gracias por Coe's to be pretty popular in the United States.

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2. Why do you think Coes failed in Puerto Rico? Will Stan experienced the same fate if he chose to go into Mexico? In Puerto Rico, even though it's "US Territory", the laws differ significantly. Based on the case study, we can see that its importance to have someone that wellknown about the market. When Coes venture into Puerto Rico where that they failed miserably. They couldnt find the right personnel to handle it. The store manager hadnt been able to handle the massive amount of collection. The store needed to be close even though only been operating 12 month only. Lack of market analysis make they had failed miserably in Puerto Rico. They had trouble with shrinkage and they couldnt find the right personnel. The store manager had not been able to handle the collections and its make the share price had plunged. They should be more prepared before engaging market in Mexico and understanding their weaknesses they should work to find out the solutions to solve the problem before face it. So that, they will know how to react when the weaknesses comes being the problem. Stan can risk opening 2 or 3 starts up stores there. These wouldn't cost too much as compared to opening a succession store in the United States, and with Aubrey's experience of dealing in Coe's, previous mistakes made in Puerto Rico can be avoided with effective staff training. A successful business in Mexico is also about adapting to the Mexican culture. Personal relationships are the key to business success and the only way to know a person in Mexico is to know the family. Mexicans first and foremost do business with people they can relate to and not just with impersonal organisations. Allow time to develop your business relationships, trust is very important and it takes time to develop this in Mexico help to build the trust required for long-term business relations.

3. Discuss the benefits and risks of investing in Mexico. You may support your answer from other resources too. By using Hofstede Dimension analysis help the investor to identify potential for them to investing in Mexico. Mexico's highest Hofstede Dimension is Uncertainty Avoidance is 82, indicating the societys low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to International Business Page 2

control everything in order to eliminate or avoid the unexpected. As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse. Mexico has a low Individualism ranking is 30 indicates the society is Collectivist. This is manifest in a close long-term commitment to the member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group. Mexico has the second highest Masculinity ranking is 69 indicates the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation generates a female population that becomes more assertive and competitive, although not at the level of the male population. Another Dimension, in which Mexico ranks higher Power Distance with a rank of 81, is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily subverted upon the population, but rather accepted by the culture as a whole. However, In order to minimize the risk for business Coes must identify the risk categories. They have to look on risk categories about competitor threats, industry changes, financial or currency risk, disastrous events, environmental or systemic risk, changes in their customers. Under each broad category, list specific events and sources of risk that affect their unique business and market position. Then list the probable consequences or business impact, as stated in dollar terms when possible. Partnership & Strategic Alliances is an international entry mode involving a contractual agreement between two or more enterprises stipulating that the involved parties will cooperate in a certain way for a certain time to achieve a common purpose. With using this strategies we obtain reduced risk through shared cost reduce investment needed and seen as local entity. Market segmentation is the basis for a differentiated market analysis. Differentiation is important. Consumers ask for more individual products and services and are better informed about the range of products than before Segmentation includes a lot of market research, since a lot of market knowledge is required to segment the market. Market research about market structures and processes must be International Business Page 3

done to define the relevant market. The relevant market is an integral part of the whole market, on which the company focuses its activities. To identify and classify the relevant market, a market classification and they are always able to satisfy the needs of customers. Basically factors that need to consider before engaging a market can be divide in two parts which is external and internal. SWOT analysis can be used to figure out factors that should be considered. SWOT is a short form for Strengths, Weaknesses, Opportunities, and Traits. SWOT analysis is about identifying internal origin and external origin. Internal origin is about attributes of the organization while external is attributes of the environment. . For internal consideration, we must analyse our strength, this is because, with knowing our strength, we will be more confident and more struggle to achieve the goals. And basically for strength of internal is more to be the situation inside the company or organization. As an example, factors relating to products, pricing, costs, profitability, performance, quality, people, skills, adaptability, brands, services, reputation, processes, and infrastructure. For second internal consideration which is weakness, we must recognize and highlight about it. This is very important, without knowing our weakness, we cannot do an improvement. We can specify the weakness to several aspects, which are disadvantages of proposition, gaps in capabilities, lack of competitive strength, reputation, presence and reach, financials, own known vulnerabilities, timescales, deadlines and pressures, and cash flow. External consideration consists of Opportunities and Threats, which are the situation outside the company or organization Opportunities are what we see or we think that could give a chance to move our business further, examples such as could develop new products, local competitors have poor products, profit margins will be good, end-users respond to new ideas, new specialist applications, support core business economies and seek better supplier deals. Threats are anything that could be the obstacles in engaging the markets. It also can be simplify to be the things that we must take seriously such as, legislation could impact, environmental effects would favour larger competitors, existing core business distribution risk, market demand very seasonal, retention of key staff critical, could distract from core business, possible negative publicity, vulnerable to reactive International Business Page 4

attack by major competitors, government policy need to be understood well. For the example during recession in United States, consumer protection advocates had attacked the rent-to-own industry. 4. If you Stan, would you expand Coes business into Mexico? Justify why. Coes should expand this is because his development team had gotten some good market data about the border cities at Mexico and some leads on potential partners there. His team analysis also says that they have 35% chance to success in Mexico. They already learned some lessons from a venture mistakes in Puerto Rico so they should be more prepared to entering foreign market. Mexico might be easier, maybe starting with two or three stores in Juarez and their can expand more stores if they achieve their bottom line with profit margin. Furthermore Latin America might be a relatively inexpensive place to do that, considering the lower transportation, labour, and real estate costs. Mexico is a completely new market that could very well diversify the risk of the company. We should transform the CFO's idea of having one Coe's next to every Wal-Mart, as big company can success into Mexico market. The advantages to the company no other competitor in rent-to-own industry in Mexico gives Coes monopoly the market industry.

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Reference http://geert-hofstede.com/dimensions.html http://geert-hofstede.com/mexico.html http://geert-hofstede.com/united-states.html http://www.noruega.org.mx/Norsk/Business-i-Mexico/Making-business-in-Mexico/ http://www.cyborlink.com/besite/mexico.htm http://www.mexconnect.com/articles/3195-comparing-management-differences-mexico-withcanada-the-united-states http://www.mexconnect.com/articles/3194-comparing-cultural-differences-mexico-withcanada-and-the-united-states

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