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Chuck E Cheese Mexico

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. 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 …show more content…

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 …show more content…

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

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