PESTEL to analyze general entrance to Mexico

>> Political
Mexico operates under a federal presidential republic system, wherein power is divided among the
president, the Union Congress, and the Supreme Court of Justice. In terms of governance, Mexico
follows a multiparty democratic structure overseen by the National Electoral Institute (INE), which
independently regulates and organizes electoral processes, ensuring their integrity and
dependability. The INE also assumes the responsibility of allocating public resources to political
parties. In recent years, President Andres Manuel Lopez Obrador (AMLO) initiated a restructuring of
INE, citing inadequate performance and excessive party funding. Notably, AMLO's party received the
highest sum of money in 2023.
Ref: Economic and political outline Mexico - Santandertrade.com
>> Economic
- Mexico is Relatively inexpensive, which have low transportation cost, lower
labor costs and also the cost of real estate is low
>> Social
- Coe’s many employees know Spanish which is basically the national language of Mexico. =>
language barrier will not be any problem in Mexico

>> Technological
- Access to many new technologies in Mexico

>> Environment
- Coe’s can take the first mover advantage if they expand in Mexico.
- Also one of the main reasons that expansion in the Mexican market can be beneficial is that
there is no competition for the company that is available there.

>> Legal
- The US can benefit from FTA while entering the Mexico Market through NAFTA and USMTA.
- A Free Trade Agreement (FTA) between the United States and Mexico exists and has been in
place for several years. The most significant and well-known trade agreement between these
two countries is the United States-Mexico-Canada Agreement (USMCA), which replaced the
North American Free Trade Agreement (NAFTA) on July 1, 2020.
- The USMCA is a comprehensive trade agreement that governs trade and economic relations
between the United States, Mexico, and Canada. It covers a wide range of industries and
trade-related issues, including tariffs, intellectual property, labor standards, environmental
protections, and more. The agreement is designed to promote trade and economic cooperation
between the three countries while also addressing various concerns and modernizing certain
provisions from NAFTA.
- Mexico has a more simple legal system compared to the US. Therefore, with relatively lower
costs, legal proceedings and transactions can often be more affordable in Mexico, which can be
beneficial for businesses operating on a budget or seeking cost-effective solutions.
Short-term solution: Before Expansion the company can use the CAGE framework for knowing
about their customers.
- CAGE framework is basically a powerful tool that companies use in order to identify
Cultural, Administrative, Economic, & geographic distances and also differences among
the company. This framework is also used to understand the patterns of the country’s
trade, its capital, people's taste & preferences. So, it will help the company to get all the
information regarding any country while expanding to any of the markets.
Example: The all-powerful Starbucks failed miserably to expand its business in Australia ⇒ fail
CAGE analysis
https://saylordotorg.github.io/text_international-business/s12-04-cage-analysis.html
https://www.consuunt.com/cage-distance-framework/

- Product Adaptation:
- Quickly adapt your existing products or services to meet local market needs and
preferences.
- Focus on a core offering initially to simplify market entry.
- Local Partnerships and Alliances:
- Form strategic alliances or partnerships with local businesses, distributors, or
influencers who can help you gain access to the target audience.

Long-term solution: Expand and open market in Mexico through PESTEL ANALYSIS, reasons:
1. Cost advantage: Mexico offers lower transportation cost, lower
labor costs and also the cost of real estate is low Financially stable
2. Domestic market is competitive and regulated
3. Explore new geographical market opportunities
4. PVI Value highest: How to use PVI
https://www.bloomberg.com/press-releases/2023-08-21/new-study-evaluates-the-use-of-masi
mo-pvi-as-an-indicator-of-fluid-responsiveness-to-guide-goal-directed-fluid-therapy-in
Steps:
1. Market Research and Analysis:
● Invest time in thorough market research to understand customer preferences, market
trends, competitors, and regulatory requirements.
● Analyze data to identify potential growth areas and gaps in the market that your product
or service can fill.
2. Build Local Partnerships:
● Establish partnerships with local businesses or distributors who have a deep
understanding of the market.
● Collaborate with industry associations, trade groups, and government agencies to gain
insights and network.
3. Localized Marketing and Branding:
 ● Adapt your marketing strategies to the local culture and language.
● Tailor your branding and messaging to resonate with the target audience in the new
market.
4. Customize Products or Services:
● Modify your products or services to meet local preferences and requirements.
● Consider factors like pricing, packaging, and features that align with the market's needs.
5. Risk Management:
a. Develop contingency plans for potential market challenges or crises.
b. Diversify your product or service offerings to mitigate risks associated with
market volatility.
6. Long-Term Commitment:
a. Understand that entering a new market is often a long-term endeavor that may
not yield immediate returns.
b. Demonstrate commitment to the market by making long-term investments.
7. Continuous Learning and Improvement:
a. Regularly evaluate your market entry strategies and make adjustments based on
performance data.
b. Seek feedback from local partners, customers, and employees to identify areas
for improvement.