Running Head: GLOBALIZATION
1
5-3 Assignment: Evaluating Potential Partnerships
QSO 321
SNHU
GLOBALIZATION 2
Introduction
The increase in globalization is encouraging global organizations to expand their
business operations beyond geographical boundaries. A US-based company is planning to
expand its manufacturing of computer memory and hard drive to a new location. In this report,
the two most favourable countries for the expansion of the manufacturing operations of the
company will be considered. The two countries that are selected for evaluation are India and
Mexico. The report also focuses on recommending the best manufacturing location that is ideal
for the company.
Sustainability Measures and Environmental Regulation
Both India and Mexico have taken a number of measures to ensure sustainability and
preserve the environment. In India, the Ministry of Environment and Forests has been formed
with the objective of preserving the natural resources of the country and preventing as well as
controlling pollution (Environment & Environmental Regulatory Mechanisms - NITI Aayog,
2021). The most prominent environmental regulations in India are Environment (Protection)
Act, 1986, the Air (Prevention and Control of Pollution) Act, 1981, and The Water (Prevention
and Control of Pollution) Act, 1974.
Mexico has also adopted several strategies to ensure sustainability. General Law on
Ecological Equilibrium and Environmental Protection (LGEEPA) and the formation of the
Secretariat of the Environment, Natural Resources, and Fisheries (SEMARNAP) show the
concern of the nation towards the environment.
The environmental regulations of India and Mexico will work well with the regulation
of the United States.
Cost and Workforce
The workforce in India has the average level of education to manufacture computer
memory and hard drives. They may require more training to become well-versed with the latest
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trends in the manufacturing of computer components (KPMG Portrait Letter (2007 V1.1) -
ministry of electronics, 2021). India has a specialized workforce for manufacturing computer
components. The cost of labor in India is relatively low as compared to the US market. In the
organized manufacturing sector of India, the employees are compensated at a rate of $0.91 an
hour. It is just 3 percent on the compensation of the manufacturing employees in the US.
Mexico has a skilled and educated workforce for manufacturing computer components
(Mexico's booming electronics manufacturing industry. NAPS, 2021). The number of skilled
laborers is also increasing in the country at a rapid pace. The cost of the workforce is also
relatively low in comparison to the United States labor market.
Government Regulation
As per the government regulations of India, the main mode of entry for foreign
companies is through the establishment of a liaison or branch office in the country.
Incorporating a private limited company is also considered to be the fastest and easiest way of
entering India for foreign companies as well as nationals (Ministry of External Affairs,
Government of India, 2021).
Mexico is known as a leading manufacturer of computer components. It allows the
foreign companies to easily enter the market. In order to enter the business market of Mexico, it
is essential to develop and maintain close relations with the partners and clients. Establishing a
representative or agent in Mexico is the main mode of entry (Mexico - market entry strategy.
International Trade Administration | Trade.gov, 2021).
Intellectual Property
In India, there exists a robust intellectual property regime. There exists a number of
legislations to effectively protect the intellectual property of organizations such as patents,
trademarks, copyright, designs, etc. The various laws relating to intellectual property are
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Patents (Amendment) Act, 2005, Designs Act 2000, 1999 Trade Marks Act as well as the Trade
Marks Rules of 2002 and 2017 (Venkataraman & Latha, 2008).
Mexico also has a strong legislation to protect the intellectual property rights. Under the
Mexican legislation, a number of agencies are responsible for protecting the intellectual
property. The agencies are Instituto Mexicano de la Propiedad Industrial, Instituto Nacional del
Derecho de Autor (INDAUTOR), and Comisión Federal para la Protección contra Riesgos
Sanitarios (COFEPRIS).
Reputation
Reputation risk is a major risk that companies have while outsourcing their operations
(Beasley et al., 2004). Outsourcing the manufacturing process to India may give rise to
negative perceptions that can significantly affect the reputation of the company. On the other
hand, outsourcing the manufacturing process to Mexico is likely to create a positive image as
there is a lot of resemblance with the United States. This, in turn, can enhance the reputation of
the company.
Recommendations
Based on the evaluation, it has been found that the most suitable location for the
expansion of the manufacturing operations of the company in Mexico. The main rationale
behind this is the availability of a skilled workforce at a lower cost and in resemblance with the
US regulations. On the other hand, the least suitable location for the organization is in India.
The lack of a skilled workforce is the main aspect that makes India less favourable for the
company.
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References
Beasley, M., Bradford, M., & Pagach, D. (2004). Outsourcing? At your own risk. Strategic
Finance, 86(1), 22.
Environment & Environmental Regulatory Mechanisms - NITI Aayog. (2021). Retrieved
February 1, 2022, from
https://niti.gov.in/planningcommission.gov.in/docs/aboutus/committee/wrkgrp11/wg_e
nvtal.pdf
KPMG Portrait Letter (2007 V1.1) - ministry of electronics. (2021). Retrieved February 1,
2022, from https://www.meity.gov.in/writereaddata/files/NSDC%20Electronics-IT-
hardware%20report.pdf
Mexico's booming electronics manufacturing industry. NAPS. (2021, November 22). Retrieved
February 1, 2022, from https://napsintl.com/mexico-manufacturing-news/mexicos-
booming-electronics-manufacturing-industry/
Ministry of External Affairs, Government of India. (2021). Retrieved February 1, 2022, from
https://www.mea.gov.in/
Mexico - market entry strategy. International Trade Administration | Trade.gov. (2021).
Retrieved February 1, 2022, from https://www.trade.gov/country-commercial-
guides/mexico-market-entry-strategy
Venkataraman, K., & Latha, S. S. (2008). Intellectual property rights, traditional knowledge
and biodiversity of India.
