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Techniques of international business: To be established in Colombia

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  1. Introduction
  2. Explanation, in general, the performance of L'Oreal
  3. The value chain
    1. Support Activities
    2. Main activities
  4. The Porter's five forces
    1. The bargaining power of suppliers
    2. The bargaining power of customers and distributors
    3. The rivalry between existing competitors
    4. The threat of new entrants
    5. The threat of substitute products
  5. The key success factors
    1. SBU: Consumer Products
    2. SBU: Professional Products
    3. SBU: Luxury
  6. The competitive position
  7. SWOT model
    1. Diagnosis of internal strengths and weaknesses of L'Oreal
    2. Analysis of opportunities and threats affecting the company
    3. Deepening of the external diagnosis according to the 5 forces of Porter
    4. The main strengths, weaknesses, opportunities and threats
    5. SWOT grid proposals
  8. The Human Resources Department at L'Oreal Description of the organization of the HR function The key points of the HR policy for L'Oreal:
    1. Recruitment
    2. Training
  9. Strategy, culture and fashion animated men
  10. Strategies
    1. A differentiation strategy
    2. A vertical integration strategy
    3. A diversification strategy
  11. The structure
    1. The operational center
    2. The strategic apex
    3. The strategic Technostructure
    4. Logistics support functions
  12. Corporate culture
    1. Different sources of cultures
    2. Culture in the service of the company
    3. Ethics, Values and Principles
    4. Managing Diversity at L'Oréal
  13. The animation of men
    1. The authority
    2. Influence of the orientation leaders
    3. L'Oréal and adhocracy
    4. Background
    5. Description of features of the structure adhocratic found for L'Oreal
  14. Study of the Management Development Center
  15. Strengths and weaknesses of the MDC Latin America
  16. Recommendations
  17. Conclusion

Ten years ago, the situation in Colombia was as follows: Colombia had the highest average growth over the past 80 years. This country has experienced a long period of growth of around 5% per year with low inflation but not low volatility. Unlike other countries, there have been no periods of hyperinflation. Until the early 80s, it observed a very large fiscal austerity which resulted in a stable government debt. Such was the history of British until the early 90s. Thereafter, for reasons including internal ones (armed conflicts, trafficking of drugs, constitutional reforms), the situation has changed.

The year 1989 was marked by a banking crisis and a sharp recession. Currently, Colombia attracts much foreign investment. It is a strategic partner for France, but also offers the latter significant export opportunities. Many large French companies have established themselves successfully ignoring the assumptions on Colombia. However, companies wishing to relocate must consider a number of risks inherent to the country that can, if poorly understood, become problematic.

As in all emerging markets, Colombia too witnessed slow economic growth in 2008-2009 although it remained dynamic. This is partly due to the reduction in foreign demand as well as the retreat of foreign investors. But Colombia, in 2007, had a very high economic growth (7.5%).
But in June 2008, Colombia also experienced a high rate of inflation (7.2%). Indeed, the policy of the Central Bank could not limit the inflation. However, some believe that the latter, in the worst case scenario, will be reduced to a rate of 6.5% in late 2008. Moreover, the slowdown of credit, especially consumer credit, led to a decrease in economic growth. This could have a negative impact on the turnover of a company.

The trade balance has been in an imbalance in 2007, with a larger increase in imports (+27%) than exports, which rose only 15%. In addition, the trade agreement between Colombia and its main partners (Venezuela and Ecuador) is "flawed" because of political tensions. Colombia may lose some transactions and thus potential income. To restore a healthy and stable economy, the country would have adopted many economic and administrative reforms. But this is made difficult because of some internal problems to the government.

Finally on this risk, you should know anyway that the economy of Colombia is the most diverse of this region: services (52%), followed by industry (36%) and agriculture with 12%. And estimated economic growth will amount to 5% for 2008, which seems more realistic and easier to maintain over the coming years.

The banking sector is strongly affected by the reduction of public debt. Tax reforms are still needed and should be put in place to ensure greater flexibility of public spending and an expansion of the base of the VAT, to improve the situation of public finances. According to economists, when the economy recovers in 2010, the global environment should be more favorable to industry.

Colombia is the third most unequal country in Latin America. Poverty (urban areas) and extreme poverty (rural areas) are still pervasive, despite a significant decline in recent years.

Tags: trade balance, emerging markets, high economic growth

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