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Report on Competitiveness of Argentina and Colombia
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Added on 2020-05-04
Report on Competitiveness of Argentina and Colombia
Added on 2020-05-04
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Investing in Latin America: “Argentina or Colombia?” 1Investing in Latin America: “Argentina or Colombia?”Student Number and NameSubmission DateNumber of Words: 2000
Investing in Latin America: “Argentina or Colombia?” 2EXECUTIVE SUMMARY The report below analyses the competitiveness of Argentina and Colombia to advice anAustralian company’s CEO who is devoted to socially responsible commerce to expand itsoperations to Latin America. The CEO faces a business challenge of selecting a Latin-American country after receiving WEF (2016) from external consultant highlightingArgentina and Colombia as the potential countries because they are operating within the samedevelopment path phase as well as depict a competitive advantage in domestic market sizethough report is mum on factors “capacity for innovation” and “business costs of terrorism”claiming that WEF (2016) lacks such data. The CEO has accepted the choice to be betweenArgentina and Colombia and hold that the eventual decision must be strictly anchored on acountry with a competitive advantage in domestic market size and local availability ofspecialized training services. The CEO holds that competitive advantage in capacity forinnovation will be desirable, though not necessary, and that the decision should also considerthe business costs of terrorism. This paper will thus help the CEO with the requiredinformation on factors “capacity for innovation” and “business costs of terrorism” left out bythe consultant’s report to inform an ultimate decision.
Investing in Latin America: “Argentina or Colombia?” 3TABLE OF CONTENT INTRODUCTION......................................................................................................................4ANALYTICAL DEVELOPMENT...........................................................................................4Argentina and Colombia Position on the Economic Development Path................................4Argentina and Colombia Overall Competitive Position.........................................................6Choice: Argentina or Colombia?...........................................................................................7Relevant Rule for Evaluation.................................................................................................7Four Key Factors Competitive Advantages Evaluation.......................................................10Domestic market size........................................................................................................10Capacity for innovation:...................................................................................................10Local availability of specialized training services:...........................................................10CONCLUSION........................................................................................................................11REFERENCES.........................................................................................................................12APPENDIX..............................................................................................................................13
Investing in Latin America: “Argentina or Colombia?” 4INTRODUCTIONThe main document used in this analysis is WEF 2016-2017. The major conceptualtools used in this report will include economic development concepts, economic developmentpath, global competitiveness index (GCI), and the idea of competitive advantage. Based onGCI, the 12 pillars and their constituents will form the premise upon which this analysis willbe undertaken. The key indicators as observed in WEF 2016-17 will aid in the analysisincluding the country’s population and GDP (Chaherli and Nash 2014). The performance ofeach of the two country will be used in understanding each pillar to unravel the countryperformance in terms of ranks and GCI scores alongside the trend and distance from best.Also, the subindex A through C of the Global Competitiveness Index will be used inunderstanding the competitiveness between Colombia and Argentina. The economicdevelopment path will also assist in explaining CEO the specific stage of development eachcountry is classified (Schwab 2010). ANALYTICAL DEVELOPMENT Argentina and Colombia Position on the Economic Development Path According to WEF 2016-17, Columbia ranks position 61 with GCI of 4.30 which hasbeen maintained from the previous ranking 2015-16 (GCI4.28). On the other hand, Argentinais ranked position 104 with GCI of 3.81 having moved from position 106 in the previousWEF 2015-16 (GCI 3.79). In Latin America, following almost a 10-year period of stronggrowth after the GFC, the rates of growth in the region have dropped and many economiesare currently heading into recession (Hill, Cronk and Wickramasekera 2013). Major commodity-exporting economies in the region including Columbia andArgentina faced a decline in export due to the end of the commodity super-cycle. Thedemand for manufacturing exports have subsequently been hit due to the drop in global tradein the two countries thereby decreasing the export values in the both countries. This adverse
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