. In accordance with this analyse it seems that the Mexican market is ready to welcome such a service in its food industry. Therefore, by adding these market knowledges to the benefits of the free trade agreement, such as free market entry cost and reduced taxes, it seems that Mexico is a very friendly business environment and attractive market for Chuck E Cheese’s franchises.
Social and demographic environment
The Mexican society enjoys a very young population. Indeed, 27.59% of its population is under 14 compared to 18.99% in the US (CIA Factbook – Mexico). In fact, according to the OECD, Mexican household are the second largest in the OECD area with 4.03 persons per household. In addition to those elements, the CIA Factbook also shows that
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This means that the risk level of Mexico is acceptable but still shaky (Coface – Mexico synthesis). As a matter of fact, Mexico is facing political violence in many difference ways.
First, corruption is still a major issue for this country as Mexico is ranked 95 out of 168 for the Corruption Perceptions index. Even though the current government passed several laws against corruption such as the Federal Anti-corruption law in 2012 that forces companies to report suspicious clients and transactions, a lot of corruption scandals still happened in Mexico lately. Those ones are often government related which complicate the fight. Indeed, corruption can have many forms such as police officers demanding money to do their jobs, bribery, frauds etc.
Secondly, Mexico crime threats are considered critical by the OSAC since it is facing criminal threats such as kidnapping, credit card fraud and armed robberies on a regular basis. Even though there is no analysis showing that American companies are more targeted than any other, criminals attack any company perceived as ‘sufficiently lucrative or vulnerable’. Then an international company such as Chuck E Cheese’s which gathers a lot of families and make money could be a target of those people. (OSAC Report Mexico
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Again, Coface rated Mexico financial risk as A4 (Coface – Mexico synthesis). This means that even though the risk is not critical, companies can face difficulties within different transactions.
First, while the inflation percentage was only 2.8% in 2015 it appears to be reaching 4% by the end of 2016. A high percentage of inflation affects the currency exchange rate by weakening it and therefore decrease the power of consumption of households.
Secondly, the Mexican society appears to be a fairly unequal society with a GINI index of 48.3 in 2008 which make Mexico the 25th less equal country in the world. Plus, the share of population under the poverty line reaches 52.3% of the population (CIA Factbook – Mexico). For a food and entertainment company like Chuck E Cheese’s this could mean that less Mexican are likely to be able to afford this service even though the service matches the
No one likes to eat the same type of food every day. Mexican food is one of the most popular types of food eaten in the United States. The Mexican families that come over to get their citizenship can run Mexican restaurants during shifts throughout the day and night. The restaurants will be open 24 hours a day at places like hospitals, hotels, and colleges. They will make simple kinds of foods like: tacos, enchiladas, and quesadillas. The food will be sold for a cheaper price than usual, but the quality of the food will still be well and enjoyable. This will be benefiting the Americans who need a quality lunch for cheap. This will also benefit the Mexicans
The corruption in the government, one of the main problems in the majority of countries in the world, causing death, poverty and impunity in the life of the persons. People think that government corruption is just buying votes to win the elections, but this is just a little part of the corruption. The corruption of the government has been present for a long time ago, covering a great variety of problems in the society, like the stealing the money from the people, alliances with the narco, using the power just a favor of the politicians, increasing the prices of food, fuel and public services just to make more money. The people do not have the necessary services to survive and if the services are available they are expensive. In some parts of the world the government is colluding with the delinquency, in the case of Mexico, the government is colluded with the narco. The corruption in Mexico has permeated several segments of society like political, economic, and social. Also it has greatly affected the country’s legitimacy, transparency, accountability, and effectiveness; knowing the majority of the people of
Employing Mexicans for such minimal wages implies a peculiar kind of a 20th century imperialism: GM is able to extract enormous profits and to become the world’s largest corporation by super-exploiting labor in a country less well developed and economically influenced by the USA.
Citizens take pride in their economic independence, mexico still values community in its cities and towns, its plazas and schools, and its work organizations. In Mexican culture the expectation of working and socializing together is a key component of society, and has a basis in the strong ties formed within the family. However, lack of faith in the government is a result of widespread political corruption. Even at the lowest levels, police officers readily accept bribes from those wishing to avoid the nuisance of a traffic ticket or a night in prison. In recent years, the government has begun addressing this corruption by reducing the number of state-owned businesses and calling on Mexicans to refuse to give bribes. This, however, has proven difficult, and the progress has been slow.
Aguirre Ochoa, J. I., & Barbosa Muñoz, P. (2013). Violent subcultures and crime in Mexico. Journal of Alternative Perspectives in The Social Sciences, 5(3), 551-572.
The employment practices of the fast food chains also leave a lot to be desired. They are a great part of the reason that people need more than one job to survive. Because they have so many minimum wage jobs even managers only make about $10 to $15 an hour. That had become a norm in the US, where people don 't even make a livable wage.
The Fast food industry is extremely competitive. Although Chipotle is a step up from most fast food restaurants, it still must
Another point that reinforces this statement is related to their employees and the way they benefit them in many different ways because from the beginning, they become part of Chipotle by a trainee program and after that if they show that their store is running in a very positive way, they will promote making possible going up the ladder. They
"In 1994, both countries [Mexico and the United States] signed the North American Free Trade Agreement (NAFTA) which has increased their mutual trade and foreign direct investment. Between 1994 And 2005, the US-Mexico foreign direct investment flows increased substantially from 16,968 billion to $71,423 billion. By 2007, the Mexican commercial relationship with the U.S. almost tripled from $297 billion to $930 billion." [2] This mutual increase in business inherently has had an attendant growth in "the number of foreign enterprises who have situated in each country." [2] With this increase in international business and trade comes cultural shifts and increased globalization and differences in managerial functions.
Chipotle has opened their stores in few countries such as the UK, the US, Canada, Germany and France. It is now time for the corporation to follow the lead from other companies like Yum. Brands such as KFC and Taco Bell as well as McDonalds expand their footprint in the Asian market like Japan. For example, Chipotle operates less than 2,000 restaurants in only 5 countries, while McDonalds operates more than 35,000 restaurants in 119 countries, and Taco Bell, another Mexican restaurant, operates 6,500 restaurants in 20 countries which shows that the Chipotle could do better if it expands its business.
Over the past years, Mexico has experienced extreme changes due to the violent drug wars. Violence has presented itself in every neighborhood, every street corner, and even in the schools. Chalk outlines are seen drawn on various streets of homicide scenes. Thousands of people have lost their lives in the hands of drug traffickers. Life itself in Mexico, has taken a change for the worse. One may ask what the reasons are for this wave of violence. The most logical answer, of course, is to blame the criminals. It is the drug lords who are smuggling, transporting, and selling these drugs. They should be the ones held responsible, right? The answer to this question is deeply rooted in the history of corruption in the Mexican Government. The
Berry, B. J., Hall, L. S., Hernandez-Guerrero, R., & Martin, P. H. (2000). México 's demographic
Presently the United States represents well over 80% of total Mexican trade. Such dependence, especially with the current trend of including increasing amounts of strategic materials, is deeply disturbing to nationalists.3 Also as China makes continuing inroads into that market and the U.S. economy weakens, such concerns mount apace.
Their effort in opening restaurant internationally is one of the biggest threats due to low customer familiarity with the brand and Chipotle’s own familiarity with the foreign market. They have tried opening restaurants in Toronto, United Kingdom and in France but the number of restaurants outside of the U.S are relatively small compared to the local
Además de los restaurantes McDonald's, la corporación tiene interés en cadenas de restaurantes que ataquen diferentes sectores del mercado como por ejemplo The Chipotle Mexican Grill, en el cual se sirven platillos de comida mexicana como burritos y tacos así como The Boston Market Corporation, líderes en el concepto de cena tipo casual.