I need a 25 page country analysis on Brazil for a private security firm.
The assignment guidelines and other resourceful material ?are attached in the attachment section.
Also i have attached my other assignments that i have done in the class, they might be helpful.
I need all resources referenced through out the paper and please use APA citation.?
The assignment guidelines are very detailed!! SO please read over them before starting the paper!?
International Business Assignment 3:
International Trade and Foreign Direct Investment
Part A: Economic Systems
China started off as a centrally planned economy, which is a system where a nations land and
resources are controlled by the government. In a centrally planned economy, the government
decides who sales what and for what price are the goods, grains and products. The ultimate
goal of a centrally planned economy is to achieve a wide range of political, social and economic
goals by controlling the resources and land of the country. A centrally planned economy places
great interest in the collective goals of a country and not the individualist achievements. Karl
Marx seen the suffering of Europe?s people during or after the industrial revolution, so he stated
that the economic system is corrupt and it needs to be overthrown. In the 1900?s a sweeping
violent revolt took over, where centrally planned economies took over, bringing to power a
communist regime. Centrally planned economies where the governing system in most of
Western Europe, Asia and Latin America and some parts of Africa. This type of system didn?t last
long and countries started reforms in the 1980?s.
This type of system was used by the communist party that took over china in 1940?s.
Throughout this time, china had a unique economic system, which controlled the agricultural
landscape. With growing world economy, china seen it was imperative that they change their
system, so they implemented drastic economic changes, that seen a more market economy
flourish in the once centrally planned economy. China has the fastest growing in the world,
while trade and foreign investment is the leading reasons for this growth.
South Africa is a Mixed Economy, which is a system where the land, factories and other
resources of the country are equally split between the government and the private. In a mixed
economy the government tends to own less than a centrally planned economy, but holds on to
the sectors that if finds to be of national security importance and long term stability, like the
steel and iron industry, oil and gas production, and automobile manufacturing. Mixed
economies also tend to have a very well run welfare and healthcare system to feed and
medicate the poor and sick. People who support mixed economies point stat that a successful
economy has to be open to innovation shouldn?t foster social inequalities, and the greed of
individualism and corporatism. South Africa is a mixed economy, where the government
controls or subsidies important economies, while also giving welfare to the poorest in the
Based on the information that I have gathered, I can say that china is the better of the two
countries to do business. The reason for my answer is based on the GDP of the country which is
in the trillions, which is second best in the world to the United States only. Its GNP is also in the
trillions, but its lacking in its Human development index, which is not so impressive.
Part B: Trade Barriers and Treaties
Trade between nations has been occurring for thousands of years, but it wasn?t till 500 years ago that
people started to study and categories it. One of the earliest theories was that of the mercantilism.
Mercantilism is a trade theory that states, nation states should accumulate wealth through gold, while
putting an emphasis on export but not importing. It also states that other measurers of a nation?s
wellbeing are not important. Some of the most prominent European states such as Britain, Spain,
Portugal, Netherlands, and France had this system form the 1500?s to the 1700?s.
While exploring the earth, European countries claimed the resources of the countries they landed on to
finance their explorations, the earliest explorers landed in Africa, Asia and the Americas, where they
established colonies. Most of these nations that were colonized are still trying to shake off their reliance
on European countries by trading with each other.
The principal of Mercantilism for it to survive depends on 3 principals: trade surpluses, government
intervention and colonialism.
Nations believed that if they stayed in a trade surplus they would be successful. Trade Surplus is the
condition that occurs when a nations exports exceeds a nations imports, which means it takes in more
gold on its exports then it pays out for its imports.
In order for countries to be in trade surplus, on some occasions governments would have to intervene in
international trade. The accumulation of wealth depends on the trade surplus and not typically in the
quantity or volume of trade. Governments would impose strict rule for import of different products into
the country either through tariffs or quotes. The governments would give subsides to industries that
they wanted to export and for goods that were being import a lot, they would ban.
Mercantilist nations needed colonies around the world that had raw materials that they could use for
trade or manufacturing. The colonist countries, would buy the raw material at a very low cost form their
colonies and send it back to their countries, and change them to goods, which were sold back to the
colonies at a high price. Raw materials like tea, tobacco, spices would be bought at a low price and sold
back to the colonies as cigars, clothes, tea?s and other products. Colonial countries made a lot of money
through this practice of mercantilism, with that money they would build their armies and navies, so they
could control their colonies in distant lands and their trade routes form attacks from other nations.
Through this practice, countries grow by political power.
Mercantilism in its essence is a very flawed system, despite its seemingly benefit for the countries
implementing, the colonized countries resources were diminished. It was a system that allowed the
countries implementing it to get ahead by stepping on other countries, by the way things were going
international trade would have been greatly hampered. If the colonized countries were being paid a
small amount for its raw material but had to pay a large amount to buy it back, then there would be no
money to trade with anymore.
Absolute advantage was coined by a Scottish economist named Adam Smith, he stated it as the ability of
a nation to produce a good better than any other nation. Adam Smith also stated that international trade
shouldn?t be stifled by tariffs or quotas but should be allowed to follow based on demand for the
Comparative advantage was stated by an English economist named David Ricardo. Comparative
advantage is the inability of a nation to produce a good more efficiently than other nations but ability to
produce that good more efficiently than it does other goods.
Absolute advantage also stats that if countries were allowed to trade to together as they say fit, no
country would need to produce every good, so if every country focused on the product that it had an
absolute advantage on, than they would trade with the other countries with the remaining goods. In
absolute advantage the gains form trade for a country would depend on the total number of resource a
country has and the demand for each good in each country.
Michael Porter put forth a theory to explain why some nations are the leaders in production of certain
products, so he coined the term competitive advantage theory, which stats that a nation?s
competitiveness in an industry depends on the industries capacity to innovate and upgrade. Porter is not
preoccupied with the import and export conundrum but explains why certain countries are more
competitive than others. Porter?s diamond consists of 4 factors that are present in every nation, those
being 1. Factor conditions 2. Demand conditions 3. Related and supporting industries, and 4. Firm
strategy, structure and rivalry.
After applying porter?s diamond to our services in China we could come up with the following:
1. Factors Conditions:
Large labour force
Leading in foreign exports and investments
Fastest growing economy in the world
2. Demand Conditions:
A more demanding local/ global market has given China international/national
A strong trend setting local market has helped local firms anticipate global
China?s growing rich upper class and foreign business people are leading to more
need for private security
3. Related and Supporting Industries:
The success of exporting products made in China has led to the success of the
With China?s leading the world economy in the last 20 years, lots of diplomates
and foreign dignitaries are settling in, has led to the growth in need for security
guards and security hardware for homes and private properties.
4. Firm Strategy, structure and rivalry:
Local strategies have improved the economy in China
Companies are improving the way they manufacture products so they could lead
After analysing porter?s diamond in the industry of private security in China, there are a lot of factors
that overlap within the diamond, for example demand conditions and factor conditions are very similar
in the sense that the large workforce and growth of the Chinese economy have led to the same
outcomes. The Chinese government plays a big role in their economy, as it controls who get a
government subsidy and which companies will do well.
Part C: Government Interference and Foreign Direct Investment
Governments intervene in trade for multiple reasons, such as political, economic and cultural motives.
The political motives countries might have to do with protecting jobs, preserving national security,
responding to other nation?s unfair trade practices and gaining influence over other nations. Protecting
jobs, is one of the important things that politicians have to do, in order for them to save their jobs. Many
countries protect some industries form import or export in order to protect National Security, industries
like ammunition, guns, bombs, sea and air transportation, due to the fact that if a war broke out, these
items are needed to protect the country. When governments respond to unfair practice of other
countries, if they are closing certain industries or are charging a higher tariffs on goods and services, that
country might stop trade with the other country for them to prove their point.
Economic motives just like political motives are meant to strengthen the host country, whenever
governments intervene for economic purposes, they would do it to protect the infant industries, which is
to protect that industry in its development stages form international competition, till it can become
competitive. The other reason is to pursue strategic trade policies.
The major reason why governments intervene in trade for cultural reason is to preserve national identity.
Culture and trade are greatly intertwined, and go with one another. Countries are influenced to other
cultures through trade and new economic relationships, so many cultures are starting to take on other
Some of the methods that China and South Africa might use to either restrict or increase international
trade would be subsides that the host governments would give to our company for us to work in their
country, and some of the restrictions would be administrative delays, were it would take long for
company officials or security personal would take long to pass through.
I think that our private security firm would get a lot of government attention due to the fact that the host
governments might want to either keep tabs on it or hire our firm to protect foreign diplomats or
The difference between foreign direct investment and portfolio investment can only be understood, after
defining the terms. Foreign direct investment is a purchase of a physical assets or significant amount of
ownership in a company in a foreign country to gain a measure of management control, while portfolio
investment is the investment that does not involve a degree of control in a company. So for foreign direct
investment, you have a control factor and there is a certain percentage that you have to meet to reach
that criteria, while the portfolio investment can purchase any amount as long as you don?t have a
management control. Foreign direct investment, would be appropriate for the service I have chosen,
either for us to investment or for the company to be open up to other investment. When running a
service company, you would need a good investment to start up with, so buying into a company in order
to get certain degree of management control would be a very suitable option, especially if there is a lot
of opposition form the side of the government towards a foreign company.
Part D: Canadian Government Business Assistance
When starting a new business, you need all the money that is available to you, especially government
assistance in the form of grants, loans and subsides. Some potential sources of financing and start up
support or assistance that may be appropriate for our international business would be:
To help you get started with the business
Government grants come in the form of subsides by the government, loans and grants.
Foreign Government loans
Some of the government sources that are available to Canadian Businesses establishing operations in
foreign markets are extensive but we will discuss the following:
1. Forum for international trade training (FITT):
For individuals who are new to international business and
Want to understand their corporate strategic needs, undertake effective international trade
research, create policies for costing, pricing, promotion and distribution
2. Trade Commissioner: Step by step guide to exporting
Is intended to help you learn about the global marketplace and how your company can do
The Guide will help you asses your companies? readiness, build an export plan, research and
select your target market, create an export marketing plan.
These government agencies are a good fit because any preparation for a foreign market is much needed
and in the end of the day, the more you prepare the better equipped you will be to succeed.
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