case analysis

CAGE, cultural distance, America and mexico have different languages, ethnicities, religions, social norms. 1, power distance, Mexican prefer hierarchy organizational structure. American prefer to treat each other equally. 2, uncertainty avoidance, Mexican prefer clear order about how to finish the task, American have some authority to decide how to accomplish the tasks.3, individualism, Mexican work on a project as a team while American to do it by themselves. 4, Mexican prefer long term orientation. American live in current. 5, masculinity is more serious in American than Mexican.
Administration distance Mexico is an unstable country due to the corruption, NAFTA in 1994, has increased the market share of Alpes in mexico by allowing them to increase their production and exports. Alpes, is able to keep their prices low, providing it a competitive advantage. So Alpes have benefited from NAFTA. Since 2006, Mexico has kept reducing its tariffs. So CRL do join venture with Alpes, will not be so many obstacles during the development of this new
Geographic distance, America and mexico are close to each other. Share the common boarders, have sea and land access and strong transportation links. So it is good for CRL to do joint venture with Alpes in mexico.
Economic distance 1, Fundamental differences relating to income, the distribution of wealth and purchasing power of segments of a geographic market. American citizens have a higher income level, influenced the purchasing power of these two countries. 2, Mexican market is unstable currency and uncertain market. Cost of borrowing is high. In case, the rates of return for alpes have been negative 25 to negative 28 over last 3 years. 3, high poverty and isolation on Mexican countryside, alpes occupied a large market share and its competitors failed continually. So building a joint venture with alpes is a good option.
Valuable, 1 they are the completed methodology to create vaccines which need to immunize poultry from pathogens, a kind virus are dangerous to people. 2, development of technology of biology, SPF eggs are more attract people. SPF eggs can develop vaccines for their own use. If old people need SPF eggs to keep them safe, may be still need to get vaccines by other way.
Rarity, Alpes is the only one manufacture of spf eggs in Mexico. So they can decrease expense to make them become a competitive company.
Inimitable/Non-substitutable IDISA was founded to serve vaccines throughout mex and latin America, collaborated with cornell university, due to high input and cost, both parties agreed to abandon the project, meant the technology of producing SPF eggs was difficult to imitate. SPF eggs had leading position in technology and requirements because of the inimitable production environment and technology.
Exploitable, great demands for human vaccines in the global market, so SPF eggs were applied increasing . Additionally, SPF eggs were raised in the confined environment against common bacteria that ere exploited to develop quality of products. Other hand, family-based management model in ALPES need to change institutional model after CRL acquisition.
Political the headquareter of Alpes lied in the city of tehuacan, which was a risky place. As to the trade relationship with America, NAFTA facilitated the Mexico foreign trade with America, and the source of more than 50% of Mexico foreign direct investment was from us. Additionally, for agricultural company in Mexico, it reduced income tax rate,meant the Mexican government encouraged the development and foreign investment in agriculture. Social welfare in Mexico, the Mexican government required employers should provide registration for each employee.
Economic, Mexico was one of the most important emerging economies. Mexico had agreed on a long-term vision and integrated National Development Plan, The Mexican economy recovered from the severe contraction generated by the 2008-2009 global financial crises as the economy experienced an average annual growth of 4.3 % between 2010 and 2012 (The World Bank, 2014). Basically, the economic environment in Mexico was stable and real GDP grew by 3.8% in 2011.
Sociocultural, Mexicans place a high value on family and traditional values. The lowest divorce rate in the world and life-long living in the same neighborhood contribute to support family members and to display loyalty. So many businesses have employees who are all related to each other either by blood or marriage and many communities have minimal trust in the government. About religion, Mexican family worship together 90% follow the Roman Catholic religion. In Mexico, Spanish is an official language. Labour market in Mexico, which are inflexible and skills shortages remain in ares(finance, energineering, skilled operation.)
Technology, SPF chicken farming requires specific building, equipment and feed, the purpose was to kill SPF chicken breeding homes, in order to get only an internationally recognized manufacturer of high quality. So led to increase greatly cost of SPF egg.
Environment, The expansion of livestock and poultry production, they focus on agricultural production and the environment. These three countries took notice of protecting the safety of the food supply . Mexico spent resources to assure the food was safe to eat and wholesome. Animal health was important.
Legal, Alpes gained the technologh support of producing SPF eggs from SPAFAS, this technologh was hard to imitate. Comparing with ordinary eggs, it had superiority. So some international organization, like WHO, EGG, and USDA set up standards of quality of SPF eggs assure the higher quality of vaccines. Also, develop standard to meet Europe market.