Introduction to Mexico

INTRODUCTION

The purpose of this paper is to evaluate Mexico and the possibility of internationalization. In order to make an informed decision about such a country, the benefits, costs and risks of the venture must be considered. In this paper, we will analyze Mexico’s economy, political structure, culture and management techniques. By examining these factors an American firm should be able to make a decision based on Mexico and the type of business considering a move into Mexico. This paper will show that a company can not internationalize into Mexico due to the lower costs of labor only. A more all-encompassing approach is necessary to make a proper decision. A study of all aspects must be done and then the decision can be made. This paper will present an overview of the factors that must be considered when looking towards Mexico and the prospect of internationalization.

LAND

Mexico, officially the United States of Mexico, has an area of 760,00 square miles, almost one-fourth that of the contiguous United States. It lies just south of the United States. Guatemala and Belize bound Mexico on the south side, on the west by the Pacific Ocean and the Gulf of California, and on the east by the Gulf of Mexico and the Caribbean Sea. Mexico is the third-largest country in Latin America after Brazil and Argentina and among all the countries of the Western Hemisphere, only the United States and Brazil have more people.

Mexico has six main regions: (1) the Plateau of Mexico, (2) the Pacific Northwest, (3) the Gulf Coastal Plain, (4) the Southern Uplands, (5) the Chips Highlands, and (6) the Yucatan Peninsula. Within these six land regions there are many smaller ones that differ greatly.

The plateau of Mexico is the largest of Mexico’s land regions. The two main regions of this plateau are the Mesa Central (Central Plateau) and the Mesa del Norse (Northern Plateau). The Mesa Central is the heart of Mexico averaging about 7,500 feet above sea level. This region covers one of the most productive agricultural areas in the country with enough rainfall to grow corn, beans, wheat and barley. This area which includes Mexico City is considered the country’s leading center of culture, industry, and transportation. The Mesa del Norse consists of mountains ranging from 2,000 to 9,000 feet. This area receives little rainfall and farming is only possible in such areas where irrigation can take place. The low mountains of this mesa have rich deposits of metal ores. The Spaniards began developing these mines during the 1500’s. In the nearby dry hills and plains huge ranches were established to supply the miners with beef, horses, and mules. In this area, vaqueros (cowboys) developed skills at riding, roping cattle, and fighting Indians, such skills were later copied by American cowboys.

The Pacific Northwest region of Mexico is generally dry and consists largely of rolling mountainous desert. During some years, the desert receives no rain at all. It has a few oases, where farmers in small settlements grow dates and grapes. The most valuable land of this area is along the mainland coastal strip. This area is popular for tourists from the United States and is one of the main revenue generating resources in this area.

Tangled forests of low thorny bushes and trees largely cover the Gulf Coastal Plain in the north. Moving towards the southern, the rainfall increases and gradually the plant life changes until it becomes a tropical rain forest in Tabasco. Many of Mexico’s longest rivers flow into the Gulf of Mexico from the coastal plains. They include the Rio Grande, which forms about 1,300 miles of the Mexico border with the United States. A large portion of Mexico’s petroleum comes from large petroleum deposits that lie beneath the plain and offshore.

The Southern Uplands consist largely of steep ridges and deep gorges cut by mountain streams. The most populated area of this plain is along the Sierra Madder del Sur, a rugged mountain range along the Pacific Ocean. The famous beach resort of Acapulco is on this coast. Some farming takes place on the steep mountain coast and much of the gold of the Aztec Empire is believed to have come from this region.

The Chiapas highlands have great blocklike mountains that rise more than 9,000 feet above sea level. This region consists of relatively flat surfaces at high attitudes called the tablelands, which are farmed by Indians who speak Maya and other ancient languages. With irrigation, farmers grow coffee, fruits, and other crops.

Yucatan Peninsula is a low limestone plateau with no rivers. Limestone dissolves in the water and rainfall reaches the sea through underground channels dissolved out of the rock. Great pits have formed where the roofs of these channels have fallen in and these