Professional Documents
Culture Documents
Business Export Plan - Workshop 2-3
Business Export Plan - Workshop 2-3
Mia Beaujard
Gabriela Bejarano
Schéhrazade Besombes
María Elena Ceballos
Ana Sofía Gutierrez
Jessica Rodríguez
Presented to:
INTRODUCTION
Finding a perfect product to sell usually represents the most critical step in creating
and growing a profitable export company. Selection of export products for sale has got to be
the toughest decision you will face when starting in international trade. It should be the first
step you take even before getting into the details on how to start an export business. If you get
it right, the rest will be a walk in the park.
OBJECTIVE
The student groups will choose a product or service to be exported, according to the
class materials, readings, and their research. This product/service will be the base for the
elaboration of the business export plan during the course. The idea is to find an interesting
product/service from the academic, professional, and economic perspectives.
CHOOSING THE PRODUCT TO EXPORT
As we have seen, many people all over the world have been writing online
their opinion in sites like Amazon, Facebook, Mercado Libre and many others, about
the Solid Shampoos or other name the used for it is Shampoo Bars, this matter has
have frequently positive reviews and with time it has been growing the interest of
more people due to the advantages it brings in comparison with Liquid Shampoos.
While Solid Shampoos are not new in the market, in fact, they have been here
for quite some time, the public concern and perception on the way products are made
and its effect on the planet have been increasing to the point they make it their top
priority to choose product that tackle in a positive way this matter that's why the
product has been widely accepted and is increasingly on the shopping list of many
people. (Arcadia,2021).
Taking into account what we mentioned before and that this kind of product is
gaining popularity again, in Latin America more specifically in Colombia it would be
innovative to introduce for many reasons, starting with the advantages it brings to the
hair itselfs and ending with what it presents to the preservation of the environment.
Previous research
The Market of the product is divided into multiple categories depending on the
type of hair the consumer has, it can be normal, dry, and oily hair. (DataIntelo, 2019).
In addition, the distribution channel is divided into offline retail and online in which
the latter takes the highest share because through the internet there are constant
discounts and bundled offers to further increase the sales. In 2018, Online distribution
channels emerged as the largest segment accounting for a 70.5% share of the global
revenue. (Grand View Research, 2019).
Because the solid shampoo product is in its emerging stage in Latin America, it
doesn’t have a large market share as other regions that had the time and are more
grounded such as North America, Europe, and the Asia Pacific. As mentioned in the
Shampoo Bar Market Forecast from Grand View Research, North America emerged as
the largest regional market in 2018, accounting for a 65.7% share of the total revenue
and the Asia Pacific is the fastest growing regional market with a Compound Annual
Growth Rate (CAGR) of 8.2% from 2019 to 2025.
This product is actually matching our expertise as it carries the values we want
to promote as product experts in the shampoo area. There’s a few values that are major
in our vision of this product, such as the ecological part of the project, the innovation
and last but not least, the satisfaction of the customers.
To start with the ecological point, our product totally matches our vision on the
subject since it’s a very ecological and respectful of the environnement product. The
innovation part is complete as the solid shampoo is a product that is not developed
onto the hair/shampoo market and as it brings a new option in the way of shampooing.
The satisfaction of the customers is a huge part of our sale. This product will bring a
brand-new way of treating your hair and hopefully will fulfill and satisfy the
customers.
At national and international level there are different spaces in which the
possibility of giving visibility to the product to interested consumers and investors is
born. Trade fairs such as "In cosmetics Latinoamerica", that is a trade fair done in four
countries: France, Bangkok, South Korea and Brazil; that enable the global personal
care ingredient community to interact, conduct business, network and learn, whether
face-to-face or online and between their clients are Dow, Ajinomoto OmniChem,
Ikeda, Elementis, etc. (In-cosmetics, s.f.)
Also, ISAPS Congress, etc, are the places where we can make our proposal
known and go beyond the national market, achieving possible commercial
opportunities. It is also important to see through organizations such as Procolombia,
which create opportunities for Colombian entrepreneurs to find possible strategic
alliances within the sector, or with related companies. Something to highlight is that
thanks to the nature and sector of the product to be developed, we have a wide
possibility of creating favorable commercial opportunities that help to export the
product.
By analyzing sales behavior before and after the current covid-19 situation, we
were able to conclude three relevant aspects of market behavior. The first one is that
although sales decreased, the general market did not have great losses; the decrease in
sales was due to quarantines and measures taken by the government. However, since
these are staple products, they remained within consumption. The second point was
that this reduction in sales was also partly due to the fact that the production chain also
had certain inconveniences.
We are well aware that many raw materials were held up and were not so easy
to move due to the contingency, not to mention that the factories were also affected
with little or no personnel. Bringing with it the consequence of reduced production.
Finally, on a more positive note, there was little impact, and this was due to offers and
promotions made to counteract the whole situation. Thus, when consumers returned to
their normal shopping, and with the economic reactivation, there was again a rise in
these sales. In conclusion, we can say that in spite of all the contingency experienced
and that we are currently still carrying, the sales give us an indication of a prosperous
market in which to enter to work with the product.
Solid Shampoos have a strong niche in the global market. Indeed, the
consumers all around the world want more ecological and cruelty-free products, which
is exactly what these kinds of products are providing. Solid Shampoos are trending yet
not so developed products. Indeed, these are firstly not sold everywhere and, in the
countries where these are sold, the products are not diversified enough. Consumers all
over the world are seeking products like this for the following reasons. First, this type
of Shampoo is better for the consumer’s haircare, especially the scalp as the products
used in the Solid Shampoos are less irritating. The consumers thanks to social media
and the blogs are more aware of what kind of products are better for them. Because of
that they are pickier with the products and now, know what components are better for
them. For that particular reason, Solid Shampoo is a promising product as its
composition respects the consumers” body. It also respects the planet as it does not
use, among other things, any aggressive detergents usually used in liquid shampoos.
As said before in the document, this type of shampoo requires less water. Considering
the continuous quest of saving water that our world has today, Solid Shampoo is
totally one of the products of the future. According to the Mintel research, this would
totally fit the trends in the economy of water expected for the year 2025.
The Solid Shampoo also represents a niche market due to its transportability
and their capacity of multitasking. These are easy to transport because they are light
and solid. Thinking of the airports’ security rules, this type of shampoo is perfect for
the people that travel very often.
Solid Shampoo due to their composition can also be used as a good soap as
they foam better than normal shampoos. According to the Mintel research, there would
be a new trend in the Shampoo market that would be commodity oriented. For
instance, in the UK we can already notice an increase in the use of 2-in-1 or 3-in-1
products, more particularly within the women consumers. Once again, the Solid
Shampoo has its place in the future haircare market.
According to the same study, this factor is also noticed in the French, German,
Italian and Spanish market.
Ultimately, considering the information that we have, we can say that Solid
Shampoo has a niche market worldwide. However, the European market seems to be
the more prepared market for it.
Given the fact Solid Shampoo are made of Natural ingredients without much
chemicals it’s easier to produce in a country such as ours, these raw materials can help
make the product in large quantities since they do not have a great complexity, not to
mention the labor we have in the country which can support the creation at a bigger
scale with the help of the equipment and machinery wield it by them and last but not
least creation of the warehouses that will make sure the product is maintained in
excellent conditions.
PRODUCT POTENTIAL
PRODUCT ADAPTABILITY
The components and ingredients of the solid shampoo can be easily adapted to
the natural resources that can be found in different countries, which is a favorable
factor when it comes to exporting it. Moreover, it is not only a product that adapts to
trends, but it also adapts to the different needs that skin and hair may have. For
example, consumers look for products according to their particular needs; if it is dry
hair, it will need moisturizing; if it is oily, it will need sebum and oil reduction, etc.
This product could be offered in different types to meet each consumer's needs.
If the product is already recognized in other markets, it could be taken and exported
with Colombian ingredients.
TRADE RESTRICTIONS
Last but not least, the certificate of good practices and manufactures, and this
is the document issued by Invima, in the constant that the manufacture of the products
is carried out under the terms of uniformity and control, in correspondence with the
quality standards for the use that said products can be delivered and their capacity.
(Invima, 2021)
Talking about the different tariffs, we have two of them. One is within the
country and it is the Value Added Tax is an indirect tax levied on the final domestic
consumption of products and services produced both in the national territory and
abroad, and this tax is about 19%. Also, we have a tariff charge to imports, which is
15%. (DIAN, 2021)
According to Passport (2021), by 2020, the brand shares of hair care products
in Colombia were Savital in first place with 11,5%; Natura with 7,1%; Sedal with
6,2%, and Head and Shoulders with 5,7%. Other representative brands in higher
positions are: Elvive, Konzil, Pantene and Schwarzkopf.
In addition, talking about the companies with a wider share in the sector, we
have in the first place Unilever Andina Colombia SA with 21,7%; Henkel Colombiana
SA with 12,1%, L'Oréal PROBECOL SA with 10,9%, and Procter & Gamble de
Colombia SA.
We really want to get things moving onto the actual market with our
innovative product. First, the actual market is based on the idea that good hair
shampoos are full of chemical products; this solid shampoo is based on natural
ingredients. It doesn’t mean that this would be less effective than a product full of
chemical products. On the contrary, the composition is developed and engineered in
order to make people’s hair soft and shiny just like the products that already are on the
market, and in addition, putting less chemical products onto our hair.
The second thing that we want to change in the market is the ecological part of
it. The actual hair shampoo market isn’t thinking about the ecological point but it’s
actually quite important. Indeed, creating a solid shampoo means having less
wrapping and consequently, polluting less. The actual shampoos are plastic bottles
wrapped in more packaging that will end in trash. With a solid shampoo, you’re only
throwing the exterior packaging and then you will consume the entire shampoo. It’s
one of our main goals to make things change about the ecology. And to conclude on
the change in the market, we really intend to bring some freshness into the shampoo
market, some boldness. Imagining, creating and then making a brand-new product to
make a difference from the contenders.
Benefits of the product
- Less Cost: They save users money in comparison with Liquid Shampoos.
- Durability: An average Solid Shampoo represents 2 even 3 bottles of the
classic liquid shampoo depending on the length of the hair and it can be used
to the very end of it.
- Natural Ingredients: Solid Shampoos are enriched with organic ingredients
that nourish consumers' hair and don’t use much chemicals nor animal
ingredients in their creation process.
- Chargeable: Easier to carry around in cases of emergency without being afraid
that it ruins something.
Product promise
This product promises to be a more natural option than other options on the
market. It is also perfect for people who choose to stop using chemicals, sulfates and
preservatives in their personal care products. Another of its proposals is the friendly
side with the planet, although this is a growing trend, there are not many products that
give this alternative. In addition, it has been demonstrated that one unit of the product
is equivalent to two or three units of its liquid counterpart. Finally, it gives you a more
compact and practical version to carry in case of any day-to-day eventuality. All of
these features are innovative in the market as they combine several needs of the final
consumer.
Product innovation
a) According to L'Oréal, a brand that has already started to follow this trend, those
shampoos are an environmentally friendly solution, as they avoid the use of
plastic materials: The packaging is made of recyclable materials, reduces water
consumption, can reduce greenhouse gas emissions by 30% compared to
traditional shampoos.
b) Using biodegradable formulas and natural ingredients in a great percentage,
which allows being friendly with the skin and hair, since the use of chemical
ingredients such as silicones, sulfates, preservatives, etc. is avoided.
c) The shampoo in this new presentation yields twice as much as traditional
shampoos; they are long-lasting.
d) Practicality and convenience in its use thanks to its shape and presentation.
e) Use of pleasant, but not usually used, essences, textures, and colors.
Offering this product, or this innovative solution, will stand out from those
"traditional" liquid products that still make use of many chemicals and plastics. As for
the competition with the same product from other established brands, or those new
ones that would emerge; our objective will be to continue innovating through the
ingredients (taking advantage of Colombian natural resources) that attract the
consumer's attention. Similarly, innovating in the presentation of the product
following consumer trends or preferences, in addition to its internal content, could
continue to lead us on the road to growth and recognition. It is not a product of the
highest complexity, but with time the market trend towards personal care and beauty is
becoming stronger, just as the market is becoming more and more conscious of
environmental care. The latter are market trends that will help us drive our products
and our goals.
Colombia is used to the traditional way that the shampoos are presented to the
market, but with the solid shampoo, they will have even more benefit with the
distinctive feature that is ecologic support. Some clients tend to complain about the
shampoo formula because it makes the hair dry and adds frizz to the final result, but
this will not happen with the dry shampoo because the formula comes from plant
origin without silicone, without sulfated surfactants, and without preservatives.
Another plus for our product is the practical and easy way to carry on, it fits
perfectly with the travelers because they are not at risk to spill it into the suitcase and
it only takes a little water to lather it before applying it to wet hair.
PRODUCT ANALYSIS
● SCAMPER methodology
● Description of the product: Our solid shampoo, it is a product designed and made
with fresh colombian products, without plastic packaging in its 100% cardboard box.
Also, with an innovative formula made sulphate-free, silicone-free and 99%
biodegradable. Our solid shampoo will lather the hair of the whole family because it is
a formula created for all types of hair. Take into consideration that one 65gr solid
shampoo is equivalent to up to 2 bottles of 250ml classic shampoo.
● Background: The solid shampoo is a brand created to give our consumer’s haircare
better benefits without any aggressive detergents used in traditional shampoo; on the
other hand, solid shampoos enjoy the fresh product of the Colombian countryside.
● Features:
○ Sulphate-free
○ Silicone-free
○ Less irritating ingredients
○ For all types of hair
○ Cruelty-free
○ Compact and easy to carry
● Availability: There are many factors that affect the durability of our product, starting
with how many people use the bar, continuing with how many times the person
washes its hair and ending with the size and volume the person's hair is. On average,
the shampoo bar can last between 3 to 6 weeks or 80 washes which is the equivalent
of 2 medium size bottles of classic shampoo.
● Packaging form: As mentioned throughout the workshops, the product will not be
packaged in any form that harms the environment, this means plastic-free and 100%
cardboard biodegradable boxing. This cardboard will be 10cm x 7cm x 3cm and the
weight per package case can be somewhere between 65 grs and 70 grs (adding the
weight of the cardboard).
● Considerations for storage: For better preservation the Solid Shampoo must be kept in
dry places, not near heat or water because it prevents a rapid deterioration due to
humidity, melt and sogginess. It must be stored in dishes that allow air to circulate so
it keeps fresh.
● Estimated useful life: The Solid Shampoo can be used up until 8 months after it’s
production.
● Suggested price for presentation: $30.000 COP
● PESTEL methodology.
PERU
P- POLITICAL
● Political stability:
The average value for Peru during the 1996 to 2019 was -0.75 points with a
minimum of -1.18 points in 2009 and a maximum of -0.14 points in 2019. The latest
value from 2019 is -0.14 points. For comparison, the world average in 2019 based on
194 countries is -0.06 points. (Global Economy, 2021) What means that this factor
does not represent a strong point for this country, the highest point is under the world
average; for these reasons, political stability could become a risk for our company in
the near future.
● Corruption:
The average value for Peru during a period between 2001 to 2020 was 36
points with a minimum of 33 points in 2006 and a maximum of 41 points in 2001. The
latest value from 2020 is 38 points. To compare, the world average in 2020 based on
177 countries is 44 points. (Global Economy, 2021) receiving the highest scores
Denmark and New Zealand with 88 points. This is another factor where Peru is under
the world average, as the majority of the countries in latin america.
● Trade restrictions:
Since 1969, Colombia has been a member of the Andean Community, which
constitutes a free trade agreement with Bolivia, Ecuador, and Peru. (International
Trade Administration , 2020) to promote the balanced and harmonious development of
the Member Countries under equitable conditions (SICE, 2021). Also, both countries
are part of the Pacific Alliance, where they agreed to gradually eliminate the tariff of
the goods and services. (Library of congress, 2014).
E - ECONOMIC
● Economic growth:
Unfortunately, the economic growth in Peru has been since 2012. The average
value for Peru during that 1961 to 2019 was 3.65 percent with a minimum of -12.31
percent in 1989 and a maximum of 12.31 percent in 1994. The latest value from 2019
is 2.15 percent, and compared to the other 183 countries in this survey, Peru is under
the global average that is 2.60 percent. (Global Economy, 2021)
● Interest rates:
Peru's central bank decided to raise its benchmark policy rate by 25 bps to 0.5
percent on August 12th, surprising markets that expected it unchanged. Policymakers
underscored that annual inflation increased from 3.25 percent in June to 3.81 percent
in July, being temporarily above the target range amid rising food prices. The central
bank projects that inflation will return to the target range in the next twelve months
and will then remain in that range for the rest of next year. The Board considers it
appropriate to maintain an expansionary monetary stance for as long as the negative
effects of the pandemic on inflation persists (Bank of Peru, 2021).
● Exchange rate:
The central reserve bank of Peru (2021) had an exchange rate for August 29 of
4.0550 peruvian sol per american dollar.
S - SOCIAL
● Population growth rate:
In 2020, in Peru the total number was 32,971,846, showing a population
growth of 1.4092 %, according to the World Bank collection of development
indicators, compiled from officially recognized sources. And this rate has been
decreasing since 2018, where the growth was more than 1,7%. (Trading Economics,
2021). According to DatosMacro (2020) the population between 0-14 year were
25,25% of the total, between 15-64 year were 66,35% , and those older than 64 year
were 8,39%.
● Health consciousness:
The healthcare goods and services consumed in Peru during each year have
been increasing since 2000, the average value for Peru during these years was 218.7
U.S. dollars with a minimum of 87.61 U.S. dollars in 2000 and a maximum of 369.08
U.S. dollars in 2018 (Global Economy, 2021). However, there is still a higher
difference compared to the world average in 2018 based on 182 countries that were
1172.05 U.S. dollars.
● Lifestyle attitudes:
In general their lifestyle has been heavily influenced by their cultural legacy
and their history. Most of the time, Peruvians are warm and friendly people, also they
spend a lot of time in essential celebrations for them, most of the time related to
religion, because religion is extremely important to Peruvians. Most are Roman
Catholics, with varying degrees of practice and devotion, also indigenous religion is
still practised. So many self-professed Roman Catholics will still worship the sun god
of the Incas, and participate in festivals and rituals referring to Pachamama, mother
earth. (Expat, 2018)
T- TECHNOLOGICAL
● Level of innovation
According to the innovation index developed by the global economy (2021),
for innovation there are 7 main aspects to evaluate a country and those are:
Institutions, Human capital and research, Infrastructure, Market sophistication, and
Business sophistication. Also, two output pillars capture actual evidence of innovation
outputs: Knowledge and technology outputs and Creative outputs. And for Peru the
situation is not that great and has been decreasing since 2013. The average value for
Peru was 32.89 points with a minimum of 28.8 points in 2020 and a maximum of 36
points in 2013. The latest value from 2020 is 28.8 points and is 5.06 points lower than
the world average.
● R&D Activity
For this factor we are going to analyse the gross domestic expenditures on
research and development (R&D), expressed as a percent of GDP. And it includes both
capital and current expenditures in the four main sectors: Business enterprise,
Government, Higher education and Private non-profit. So, analyzing Peru including
these factors, we noticed an important increase from 2012 to 2018, where the points
are 0.13, which is getting really close to the world average that is 1,17 points (Global
Economy, 2021).
● Technological awareness
According to Statista (2021) With nearly 20 million users as of January 2021,
Peru has the sixth-biggest online population in Latin America. Although the country
still struggles to overcome problems of access to this service in rural areas, the internet
is in general already part of the daily life of many Peruvians. And after the pandemic
the usage of e-commerce increased and e-commerce and retail changed, the number of
digital buyers increased to 11.8 million and “Mercado libre” was the most visited
e-commerce site in the whole country.
E- ENVIRONMENTAL
● Weather
Currently the weather in the country has an average temperature of 17,8
degrees. Lima, the capital, has a temperature of 16 degrees. (AccuWeather, 2021)
● Climate
Peru has three distinctive regions with three distinctive climates. The coastal
region, which is mainly desert, has a dry hot climate all year round, with temperatures
reaching 45°C (110°F) from December through April. Further inland in the highlands
of the Andes, there are two distinctive seasons: the wet season from December through
to the end of March and the dry season from April through November. Finally the
tropical jungle region of Peru is humid all year round, with the humidity and rain
intensifying from December through March. (The only Peru guide, 2021)
● Environmental policies.
According to Forest trends (2016) The Peruvian government has formally
released a ratification of the Paris Agreement with those steps :
1. The regulation of its groundbreaking national payments for ecosystem services
law
2. A separate regulation of the Sanitation Sector Reform Law that creates a
process for water utilities to utilize payments for ecosystem services to secure
their water supply through watershed conservation
3. A national strategy for forest conservation in the context of climate change
4. Guidance for biodiversity offsets under Peru’s innovative no-net-loss rules.
L-LEGAL
● Consumer protection laws
The Constitution of Peru of 1993 contains an explicit reference to consumer
protection in article 65, which provides: “The State defends the interests of consumers
and service users. To this end, it guarantees the right to information in respect of the
goods and services available on the market. It is also responsible for ensuring, in
particular, the health and safety of the population.” On the basis of the Constitution,
Peru has established a strong legislative and public policy framework for consumer
protection. (United Nations, 2019)
P- POLITICAL
● Political stability
The average value for Chile during that period was 0.52 points with a
minimum of 0.04 points in 1998 and a maximum of 1.09 points in 2002. The latest
value from 2019 is 0.21 points. For comparison, the world average in 2019 based on
194 countries is -0.06 points. Except for the 17 years of General Augusto Pinochet's
dictatorship, Chile is one of the most politically stable countries in the world. In recent
years it has been free of arbitrary governments or forms of government that weaken
the country. On the contrary, the prosperous situation of the country demonstrates the
good management with which it is run. Two years ago, although there were
disagreements with the government, the people were able to find ways to make
themselves heard, to propose and, in the end, to intervene without creating major
complications.
● Corruption:
The issue of corruption in Chile is quite sensitive, because this is a big crime
and a situation that is little seen in the country. In order to eradicate or significantly
reduce acts of corruption, the legislation against it has been tightened. In the country it
is expected that all elections, money management, decision making, and other issues
of relevance to the population are treated in a public way, that is to say that all
information should be in the public domain. Although it is not a perfect country in this
regard, within the world ranking it has a very favorable position compared to many
other Latin countries.
● Trade restrictions:
Chile has very few barriers to imports or investments, allowing foreign firms to
enjoy the same protections and operate under the same conditions as local firms. has
recently become a member of the Mercosur agreement and products manufactured by
Mercosur members are subject to lower duty rates than non-membership
nations.Chile’s technical standards and quality controls are established by the Instituto
Nacional de Normalizacion (National Bureau of Standards). Its requirements are in
accordance with the internationally accepted norms.All items ordinarily used or
consumed by the public must show the country of origin.
E - ECONOMIC
● Economic growth:
The latest data from Q1 2021 show economic growth of 0.34 percent, which is
an increase from the rate of growth of 0.01 percent in the previous quarter and an
increase compared to the growth rate of 0.17 percent in the same quarter last year
(Central Bank of Chile,2021). During the period reflected in Q2, year 2020, the
Chilean economy had its largest decrease in the last 23 years with a percentage
decrease of -14.25%.
● Interest rates:
According to the Central Bank of Chile, interest rates have currently started to
rise, reaching 25 bps. It must also be taken into account that the constant evaluation of
the dollar and the current economic reactivation, creates certain fluctuations in these
rates. It is expected that with the positive reactivation that the country has had, the
economy will stabilize a little more and the interest rates could be in pre covid
conditions.
● Exchange rate:
For that indicator, we provide data for Chile from April 2004 to July 2021. The
average value for Chile during that period was 591.2207 Chilean Pesos per USD with
a minimum of 443.4926 Chilean Pesos per USD in March 2008 and a maximum of
854.1259 Chilean Pesos per USD in April 2020 (Central Bank of Chile,2021).
S - SOCIAL
● Population growth rate:
According to United Nations data, the Chilean population is approximately
19,305,824. This population has an average age of 35.3 years and 84.4% is located in
urban areas of the country. During the first years of the new century, the population
grew steadily, but since 2015, and under the current situation, it has decreased, taking
into account the nativity rate.
● Health consciousness:
During the years 2000-2010 the increase of diseases such as diabetes, high
blood pressure, obesity, heart problems, etc. were on the rise, all due to bad habits. The
corresponding authorities gave a wake-up call that would later be reflected. Chileans
were consuming a lot of processed and unhealthy food. Years later, years later, a law
was passed which obliged companies and distributors of packaged food to clearly state
the vitamin content and ingredients of the product on its packaging, in a way that was
clear to the consumer. With this, a growing trend of food awareness was also born.
Adding to the global trend of "fitness" and the healthy lifestyle model. By 2017,
according to Euromonitor, the health food industry and its partners estimated a growth
of more than one billion. Over time, many more healthy consumption options have
been incorporated, making this a lifestyle for Chileans. Proposals from the side of
exercising and creating healthy habits have been included in the Chilean daily life,
which over time saw a significant reduction in the numbers of the aforementioned
diseases.
● Lifestyle attitudes:
The Chilean lifestyle depends largely on what area of the country you are in.
Also taking into account the changing seasons and seasons. The cities have a high
density of people so life is hectic, however the spaces within the city give a natural
aspect that provides different spaces for people. In the more rural and valley side of
the country life is a little more oriented to be quiet, however this type of spaces, along
with the beaches, increase a lot the concurrence in times of vacations and celebrations.
People in the country are friendly and quite open to the unknown.
T-TECHNOLOGICAL
● Level of innovation:
According to the Global Innovation Index, Chile ranks first in Latin America
for innovation. The spending by the government is spurring innovation through
investments in startups and loosening restrictions for larger companies looking to
penetrate the Latin American market. Chile is also ranked 14th for the number of firms
created each year. About 89% of high school students successfully enroll in university
in Chile. This prepares students for their future careers, and it creates environments for
students to share ideas and potentially start their own businesses.
● R&D Activity:
Although progress and investment in Latin America is not the best compared to
other regions, Chile is one of the main examples. Although historically the country did
not give much importance to the sector, since the 90's the country started to be ranked
positively. Considering that investment is increasing and that the country seeks to
develop policies and initiatives that increase the expectation of foreign investment.
● Technological awareness:
The Chilean government creates programs through which investments and
entrepreneurship in the technological area can be generated. One of the most striking
initiatives is to look for startups that are being born in the sector, in order to promote
them. The idea is to support them economically, create mentoring programs, fairs and
spaces that generate interest in these businesses or business ideas. Chile is one of the
most developed countries in Latin America and its impulse is to continue growing in
order to position itself competitively in the world market.
E-ENVIRONMENT
● Weather:
Chile presents the 4 seasons in reverse to those of the north of the continent
and Europe. Because of this the temperatures can reach certain extremes but these
depend on the area where the city is located, being on the coast the heat is a little more
extreme and the cold not so much. In the valleys and valley areas and near deserts the
cold during winter is extreme.
● Climate:
In Chile, there is a wide variety of climates: desert but mild in the north,
Mediterranean in the center, oceanic in the south, and cold in the Andes. All of Chile
north of the Santiago region is desert, in both the coast and the Andean area. On the
coast, in cities like Arica, Iquique and Antofagasta it hardly ever rains: years can pass
between one shower and another. Temperatures vary according to the season and area
of the country. This is also reflected in the vegetation and production of certain foods.
● Environmental policies:
Environmental institutions have been modernized in recent years, with
oversight bodies becoming increasingly effective. However, policy is oriented toward
international market requirements rather than toward sustainability. While industrial
interests have considerable influence, particularly in the fields of water use and
forestry, courts have occasionally halted development on environmental grounds.
(Sustainable governance indicators,2021)
A green tax has been in place in the energy sector since 2017. A bill containing
an emissions-reduction and climate-governance system has been in the works for some
time, and was expected to reach parliament in 2020. The bill foresees carbon neutrality
by 2050. (Sustainable governance indicators,2021) The capital city of Santiago has
implemented a number of initiatives aimed at diminishing air pollution and promoting
sustainable public transport. The country signed the Paris Agreement in 2016. It was
slated to host the 2019 COP25 UN Climate Conference, but this was canceled due to
the political crisis. (Sustainable governance indicators,2021)
L-LEGAL
● Consumer protection laws:
The Law provides that consumers have a right to the quality and functioning of
goods and services offered by suppliers. If there is a breach in the quality and/or
functioning of the goods and services consumed, the Law provides legal and voluntary
guarantees. In general, all goods and services are covered by the protections related to
the quality contained in the Law, except for the quality of certain goods and services
covered by special regulations.
CANADÁ
P- POLITICAL
● Political stability
According to The Global Economy, Canada during the period 1996- 2019
obtained an average value of 1.07 points in the political stability index, where -2.5 is
the weakest, and 2.5 the strongest. The maximum value was in 2015 with 1.27 points.
This index measures “perceptions of the likelihood that the government will be
destabilized or overthrown by unconstitutional or violent means, including
politically-motivated violence and terrorism” (The Global Economy, 2019). This score
indicates that the country has outstanding political stability.
● Corruption
According to the corruption perceptions index, Canada for the year 2020, had a
score of 77 out of 100, ranking 11th out of 180 countries, where 100 indicates that the
country is very clean and 0 that it is highly corrupt. With this score, Canada ranks
among the top performers in the Americas. This index takes into account factors such
as: Strengthen oversight institutions, ensure open and transparent contracting, defend
democracy, promote civic space, and publish relevant data, guarantee access. Canada
by 2020 is a clean country in perception of corruption.
● Trade restrictions
Canadá maintains a liberal trade policy. No licenses or permits are required for
most imports of merchandise with the exception of some products such as some
agricultural products, some textiles, firearms, steel, clothing, drugs and medical
devices. Goods must comply with certifications, marks of origin, labeling and
packaging requirements (in English and French), otherwise goods may be refused
entry. Canada and Colombia have a free trade agreement in place, which is very
important because it was Colombia's first FTA with a developed country and offers
opportunities for economic growth and development (Procolombia, 2011).
E - ECONOMIC
● Economic growth
By 2020, according to data from the World Bank, Canada presents a -5.4%
drop in GDP growth due to the impact of the pandemic on the economy. It is estimated
that by 2021, GDP will increase as the impact of the pandemic is lessened as pent-up
demand, increased savings, fiscal and monetary stimulus can boost the economy again.
However, there is still uncertainty about the future and new variants of the pandemic,
but growth of 6.2% is still projected for this year (FocusEconomics, 2021).
Source: World Bank
● Interest rates
The Bank of Canada's interest rate adjustments reflect the path to recovery and
confidence in the strength of the economic outlook. The post-pandemic recovery of
the economy, the decline in COVID cases, advances in vaccination and easing of
restrictions suggest a rebound for the remainder of 2021. For July 2021, its overnight
interest rate remained at 0.25%. (Trading Economics, 2021).
● Exchange rate
According to the Central Bank of Canada, on August 28, 2021, one Canadian
dollar is equivalent to 0.79 U.S. dollars.
Source: Bank of Canada
S- SOCIAL
● Population growth rate
Currently, Canada has a population of 38,005,238 people. According to
statistics presented by the World Bank, the annual population growth in Canada had
been increasing since 2015; between 2018 and 2019 it remained stable, but in 2020 it
presented a decrease of 1.1% due to the effects of the pandemic. By 2021, it will
increase by approximately 0.86% from 2020 (Macrotrends, 2021).
● Health consciousness
According to an executive summary conducted by Euromonitor International
in January 2021, COVID-19 prevention measures have had a major impact on the
demand for many products such as packaged food and beverages. Being in isolation at
home has brought about a turn to healthier choices. Living a healthy lifestyle for
Canadians is very important. Eating a healthy diet, exercising, finding a work/life
balance, managing sleep patterns are key factors for them to improve their physical
and mental health. Moreover, transparency in food ingredients is important for
Canadians to know what they are really eating (NielsenIQ, 2017).
● Lifestyle attitudes
According to an analysis conducted by Euromonitor International in 2020,
called "Consumer Types in Canada", several consumer styles can be found in this
country such as: Impulsive Spender (25%), Self-care Aficionado (21)%, Minimalist
Seeker (20%), Digital Enthusiast (16%), Undaunted Striver (9%) and Secure
Traditionalist (8%). Most consumers are interested in the latest trends and stay in
touch with social media and brand engagement, but they also value experiences more
than material things; they look for low prices, prefer to shop in stores and are quite
careful with the information they share online. Self-care consumers prioritize their
health and wellbeing. Minimalist seekers give more importance to sustainability and
community issues, do not like to make impulse purchases and take the time to search
for products, paying attention to quality and are even willing to pay more if necessary.
(Euromonitor, 2020).
T-TECHNOLOGICAL
● Level of innovation
According to the Global Innovation Index for 2020, Canada ranks 17th out of
131 economies considered. "Canada produces less innovation outputs relative to its
level of innovation investments" (Global Innovation Index, 2020). Canada's strengths
in terms of innovation indexes are found in: Institutions, Government effectiveness,
Regulatory environment, Business environment, Ease of starting a business, General
infrastructure, Market sophistication, Investment, Market capitalization, etc. (Global
Innovation Index, 2020).
● R&D Activity
According to an executive summary presented by the Council of Canadian
Academies, Canada's recent history includes applied research and development,
business-led R&D, and the relationship of these enables the creation of wealth and
prosperity through innovation. Countries, and Canada is no exception, are looking to
increase their investment in R&D because it is there that ideas are developed, talents
are enhanced, and people's skills are improved. Canada has a high level of education
and important areas of research. Moreover, as it is an open economy, companies are
interested in carrying out R&D activities there. However, this country may not be
attractive for companies with global reach.
● Technological awareness
Canadians are continually embracing new technologies because they believe
they help improve communities, efficiency, safety and security, and seek
technologies that are environmentally sustainable. Among Canadians' preferences are
innovations that include connectivity (EP&T, 2020).
E-ENVIRONMENT
● Weather
For August 30, 2021, Ontario, Canada is expecting a temperature of 27° with
a wind chill of 28° and humidity of 43%, summer temperatures. The maximum
temperature today is 27° and the minimum temperature is 18°. The probability of
rain is 1%. (The Weather Channel, 2021).
● Climate
Canada has a wide variety of climates because of its large size; the warm
waters of the Gulf in the Atlantic Ocean and the Alaskan Current impact the climate.
These currents bring heavy precipitation to the coasts. In the east the air is colder and
there is frequent fog. On the other hand, for the most part, the northern two-thirds of
Canada has very cold winters and short summers. With the exception of the coastal
area, Canada has winter seasons with sub-zero temperatures and continuous snow
cover. Temperatures on the west coast range from 3°C to 18°C, in the interior plains
they range from -18°C to 19°C. The lowest temperature ever recorded in Canada was
-63°C in 1947, and the highest was 45°C in 1937 (Britannica, n.d.).
● Environmental policies
The Government of Canada has regulations such as the Environment and
Climate Change Canada, which contains more than 70 regulations or laws that
regulate industrial activities, business partners, levels of government, energy and
transportation sectors, bird hunting, plant and wildlife protection and water pollution
in certain activities. (Government of Canada, 2019). The government also manages
plans such as The Canadian Environmental Protection Act 1999 (CEPA) which
provides solutions for pollution prevention, environmental emergency, and toxic
substance management.
L-LEGAL
● Consumer protection laws
For consumer protection and awareness, the government of Canada, its
agencies and federal departments have legislation that includes areas such as:
Consumer product safety (The Canada Consumer Product Safety Act CCPSA),
Anti-competitive practices in the Marketplace, Price fixing and misleading
advertising, packaging-labelling-sale-importation and advertising of prepackaged
products, safety and nutritional quality of all foods, privacy complaints, etc.
(Government of Canada, 2020).
MATRICES
Possible Countries
This and the following matrices were made to choose the country to which we
will export our tariff heading 330510, so that it was not a random choice, but justified
in statistics, indicators and criteria of importance for the percentages.
In this order of ideas, for the realization of the selection matrix of possible
countries were taken into account the exports and imports in the world of the tariff
heading, Colombia's exports of it, and which Latin American countries imported it. All
these data are official for 2019 from The Observatory of Economic Complexity (OEC)
and Procolombia Ruta Exportadora.
For the selection of those possible countries we took into account which
countries in the world and in Latin America imported the tariff heading 330510 in
greater proportion, and from these, those that also exported it were discarded because
their domestic market can supply their internal demand. Additionally, it was taken into
account with which countries Colombia already had experience with the export of this
product, distance of the countries, language limitations, among other factors. Finally,
after this analysis, the following countries were selected: Canada, Netherlands, Peru,
Ecuador and Chile.
DATA MATRIX
After searching the data for each country, we proceeded to analyze and
evaluate from 1 to 5 (1 being the lowest score and 5 the highest) each country-factor
depending on whether the information and data are favorable for our product or not.
● Export Growth Rate (USD Millions): Countries where exports of tariff
heading 330510 have decreased have a higher rating; countries where exports
have decreased, but to a lesser extent, have a regular rating; and countries
where exports have increased have a lower rating. We evaluate this because it
is not beneficial for our product to enter a country where exports are so high,
which not only exports, but can easily supply its domestic demand.
● Trade Balance 330510: Same rating criteria as the previous indicator. Higher
rating for those countries with a negative trade balance (more imports than
exports) for tariff heading 330510; medium rating for those with a negative
trade balance for the product but to a lesser extent, and negative rating for
positive ones.
● Agreement and Tariff: All the selected countries were given a high rating
because they all have free trade agreements with Colombia that allow tariff
heading 330510 to have 0% tariffs.
● S&P Rating (Standard&Poor's): The rating, or debt rating, measures the
ability of a country, government or company to service its debt and therefore
the risk involved in investing in it. The higher the risk, the worse the rating,
due to the probability of default.
● Country Risk and Business Climate: Those countries where the risk is
lower and the business climate is better have the highest ratings. On the
contrary, those with higher risk and poorer business climate have negative
ratings.
● GDP Per Capita ($USD): Countries where the country's economic
production per person is higher will have a higher score because this ensures
higher income and can mean accessibility when buying our product. On the
contrary, those where this indicator is lower, the score will be directly
proportional.
● GDP Growth: Those countries with higher GDP growth will have a high
score because this means higher purchasing power in households; those with
medium growth will have a medium score, and those with decreasing or little
growth will have a negative one.
After evaluating each indicator, the next step was to assign which of them had
greater weight or had greater importance in making a final decision, therefore the
weighting percentages were established, the respective mathematical operations were
performed and the three countries with the highest total score were: Peru, Chile and
Canada. Finally, it is these countries that are evaluated in the PESTEL, taking into
account other factors and indicators.
Finally, after having carried out the necessary research for each factor and
indicator chosen in the PESTEL, we went on to assign the appropriate weighted
percentages to each one depending on the level of importance of each one at the time
of exporting our product. After assigning these percentages, we continued to rate each
indicator from 1 to 5, evaluating whether the country in each aspect was in favorable
or unfavorable conditions for us. Finally, having the percentages and the due scores,
we proceeded to perform the mathematical operations that showed us that Canada
was the country with the best score and our most favorable export destination.
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