Business paper
smart_student
Discussions1-5ANSWERED.docxRunning head: PANAMA 1
PANAMA 8
Panama
Name
Class
Institution
Date
Week 1
I will talk about Panama. I like Panama and it’s among my favourite countries. I have been hearing about the natural beauty, the fresh air and the favourable weather in Panama until I decided to visit the country personally. There are a lot of things that I liked about Panama from my travel experience. The country has amazing beaches which are good for any traveller. Panama is also a tropical paradise that hosts some of the most exotic and diverse species of birds, plants, and animals of the planet. What makes that country unique for all foreigners is the incredible number of unknown islands that are in the country. To add on that, Panamanian citizens are so welcoming and friendly to the foreigners.
Panama is a nation within Central America, surrounded by the Pacific Ocean, Colombia, Caribbean Sea, and Costa Rica. Its largest and capital city is Panama City. Panama’s population was approximately 4,162,618 in the year 2018, 4,098,587 in 2017, 4,162,618 in the year 2018, and approximately 4,159,774 as of January 2019.
Panama is among the fastest growing and developing economies within Latin America. The GDP of the country per person was $11,841 in 2013, $12,758 in 2014, $13,608 in 2015, $14,357 in 2016, and approximately, $15,199 in 2017. The economy of the country is cantered on a highly developed sector that represents over 75% of GDP. The use of the United States dollar and the Panama Canal have promoted the establishment of a worldwide- oriented economy. The Panama Canal accounts for approximately 10% of the GDP and is significant for international trade. Colon Free Trade Zone and Trans-Panama pipeline have also contributed to the economy of that country. Additionally, the country has large storage services and logistic sector, along with a modern insurance and banking industries.
Week 2
An economic system is a system of resources, production, distribution, and allocation of goods and services within a geographical area. In other words, the economic system is the means by which government and countries distribute resources and how it trades with goods and services. The economic system includes the combination of various agencies, institutions, the pattern of consumptions, and decision-making processes. It is used to control the factor of production which includes capital, labour, physical resources, and entrepreneurs
Panama is a dollarized and consumer-based economy (Klein, 2005). Panama’s economy is well planned and relies primarily on well-developed service sectors which accounts for ¾ of the GDP. The national GDP of the country is approximately $44.69 billion. The service sector includes banking, Panama Canal, the Colon Free Zone, container ports, insurance, tourism, and flagship registry (Pagano et al., 2016). The nation’s industry includes manufacturing of cement, airplane spare parts, drinks, textiles, and adhesives. These sectors have expanded largely due to the free movement of capital, devotion to the global regulation standards, a stable political system, and dollarized economy. Some exports from Panama include sugar, clothing, bananas, coffee, and shrimp. Moreover, Panama has a rich natural resource base which comprises of gold and petroleum. The country mostly trades with Costa Rica, the U.S, and Canada.
The government of Panama has encouraged economic growth and development over the past years by encouraging free trade and supporting open market rules. Panama signed a free trade treaty with America in 2012, which boosted its trade and investment. It signed an association treaty with the European Union in the year 2013 and signed a free trade treaty with Mexico in 2014. This move has strengthened trade connections with other countries. Additionally, the Panamanian government always support foreign direct investment by assuring ease of business and through tax regulation.
Week 3
Today’s businesses, regardless of their operation sizes have to be aware of worldwide issues which include cultural differences. One extremely essential aspect of this concept is the idea of low-context and high-context cultures. Even though there are several diverse cultures in the world, cultures can either be described as either low-context or high-context culture. Low-context culture and high-context culture is a degree of how clear messages are exchanged in a culture and how the context is significant in communication. Low and high context culture fall on a range that explains how an individual communicates with one another through his/her range of communication skills such as gestures, body language, non-verbal messages, and verbal messages. In high-context cultures, people communicate in an implicit manner and depend heavily on context. In a low-context culture, people depend on explicit oral communication. In a high-context culture, people normally interpret message using gestures, tone of voice, implied meaning or silence. In a low-context culture, people interpret message through words.
Panamanian culture is a high-context culture. They depend on the use of non-verbal elements to convey meaningful information during conversation such as eye movement, tone of voice, and facial expression (Klein et al., 2019). The non-verbal features and context are more significant than the actual message or words that are communicated. During my visit to Panama, I discovered that Panamanians used much more of facial expression and body language during a conversation. Moreover, Panamanian culture focuses more on interpersonal relations. In contrary, Germany culture is a low-context culture. During communication, the words are significantly more than the surrounding context. They communicate in a more straightforward and explicit manner. In this case, nonverbal features which are still significant is less important in Germany culture. Additionally, in Germany, people can be defined as individualistic. Individual accomplishments and achievements are valued more than group achievements. Therefore, aspects such as personal space and privacy are highly valued.
Week 4
It is always important for any business to identify a target market and demographics before it starts to operate. A target market is a group of people which business is targeting with the advertisement. These individuals are those who are likely to use the products and services of the business. On the other hand, demographics refers to the measurable characteristics of a population. In this case, demographics are subsections of a target market (Thao & Duong, 2019). Target market can be categorized based on the following: age, gender, income, lifestyle preferences, and purchasing cycles. A business normally uses various variables when defining and determining the target markets, which includes personal interests and demographics.
I am planning to open a shoe manufacturing firm that manufactures sneakers. The target market for my product will be men and women in the middles and upper class. Both men and women prefer sneakers more than any other type of shoes because of the following reasons; sneakers offer full foot support, they are comfortable to wear, and they can be won for different purposes, activities, and events.
Targeting men and women from the upper and middle class will mean a lot to the success of my business. These groups of consumers have more purchasing power than other consumers and are more likely to be reliable customers. I will consider the following strategies in order to attract these groups. I will focus on the quality of my products. Middle and lower class normally respond positively to a product of high quality. I will also focus on the value of my products. Middle and upper class normally relate higher prices to greater value. Moreover, I will also focus on the appearance of my products. The middle and upper class normally look for a taste of luxury in everything they purchase. Therefore, I will try as much as possible to add a little more status and prestige into my brand.
Week 5
A tariff is a tax on exports and imports between states. A tariff is a form of sovereign regulations which taxes imported products to safeguard or encourage domestic industries (Graham, 2015). In this case, the tax duty on the importation of sneakers into the country (Panama) will be $10.
Direct investment and licensing are both classified as entry methods in the global market. They both involve the flow of capital from one cooperation to another cooperation in another country. However, direct investment occurs when a company invests in a corporation or business in another country with the purpose of creating a lasting interest (Iamsiraroj, 2016). On the other hand licensing occur when cooperation gives another cooperation permission to sell, manufacture, and its products for a specific period. It general entails allowing another cooperation to use trademarks, patents, designs, copyright, and any other intellectual in exchange of a royalty fee.
I will use licensing as my new global strategy. I will look for a local shoe manufacturer (licensee) within Panama to license my product. The licensee will then sell my product locally under a local product name. Through licencing, I can get instant access to a foreign market. Additionally, licensing is less risky in terms of resources, capital requirements, and time. It is also a perfect solution to any legal entry barrier. Moreover, linguistic and cultural barriers also affect international trade. Licencing will, therefore, be a perfect solution to these issues because the licensee normally has local contacts, has a clear understanding of the domestic market, and has better understanding of the local language.
References
Graham, F. D. (2015). Protective tariffs (Vol. 2315). Princeton University Press.
Iamsiraroj, S. (2016). The foreign direct investment–economic growth nexus. International Review of Economics & Finance, 42, 116-133.
Klein, M. W. (2005). Dollarization and trade. Journal of International Money and Finance, 24(6), 935-943.
Klein, H. A., Lin, M. H., Miller, N. L., Militello, L. G., Lyons, J. B., & Finkeldey, J. G. (2019). Trust across Culture and Context. Journal of Cognitive Engineering and Decision Making, 13(1), 10-29.
Pagano, A., Wang, G., Sánchez, O., Ungo, R., & Tapiero, E. (2016). The impact of the Panama Canal expansion on Panama’s maritime cluster. Maritime Policy & Management, 43(2), 164-178.
