Mexico is one of the leading markets for electronic goods such as mobiles creating a global business avenue. Like any other business, a number of risks face electronic goods. The objective of the paper is to conduct a risk analysis on Mexico for Liberty communications Satellite Phones Company a new business venture. Risk analysis in this case is an aspect of identifying risk factors that jeopardize the success of the new communication company in Mexico.
The rules regulate marketing, supply and distribution of satellite mobile phones which affects operation of business. Communication through satellite mobile is regulated by rules made by politicians and thus the company is supposed to have adequate knowledge about communication rules. Another risk to be analyzed is exchange and repatriation of funds which relates to exchange rates. The company is supposed to consider the value of Mexican currency against other currencies to meet global standards (Fleisher Craiq, 2005). This risk occurs when currency trades badly against other currencies as it is a loss to the communication company.
Competition is a general risk to any kind of business and thus Liberty communications should consider evaluating whether there is any other dominating company that deals with satellite mobile phones. Upon close evaluation of the communication sector, Liberty communications is bound to make sound decisions about that particular venture. Every business is bound to pay tax to government and this is a major area of concern by Liberty communications. The taxation rate differs from one business to another according to laws made by political entities (Culpan Refik, 2002).
In certain instances, the rate of taxation is very high making business to pay heavily. The communication company should consider laws regarding taxation and double taxation. Marketing of satellite phones is a major risk that ought to be analyzed before venturing into communication market. The major aspects to be considered include the 4p’s such as product, price, place and promotion. Management at Liberty communication is supposed to consider putting satellite phones (product) at the right place (Mexico) at the right price and time (promotion).
Once these elements are considered the company successfully ventures communication sector without obstacles. Distribution and supply chain is another major risk that should be analyzed as it can lead to poor trading. The company is bound to exploit certain royal customers with the intention to make maximum sales. Distribution of satellite phones is exposed to both physical and environmental risks which should be evaluated before venturing into the business. Social and cultural life of Mexican people is another major area that exposes the company to risks.
The social life and cultural practices in Mexico have an influence in communication and Liberty communications is bound to consider such values. This is related to life style as it is influenced by technology and cyber. Management of Liberty Company should consider whether Mexican people have enough knowledge on technology as it is the main area of specialization. References Fleisher Craiq, 2005, Competitive Intelligence and global Business, Praeger. Culpan Refik, 2002, Global Business Alliances: Theory and Practice, Quorum Books.