Quiz # 3: Zara

In Partial Fulfillment
of the Requirements for the Course
International Business
Submitted By:
Beltran !i"hel
#an $ristine
Samson Crai%
&y 'iane
(u%ust )* +),+
I. Statement of the Problem/s
Phili--ine Cannin% Cor-oration .PCC/ is a lo0al 0om-any 1hose main -rodu0ts are 0anned tuna and
sardines2 'urin% the year +))3 the 0om-any 1as a--roa0hed by a dele%ation from (r%entina 1ho offered
them lar%e quantities of beef at 4ery attra0ti4e -ri0es2 (-art from (r%entina they also thou%ht of t1o
alternati4e sour0es of beef 1hi0h are (ustralia and India2 (ustralian beef 1ould be another o-tion ho1e4er
the quotes 1ere about 5678 hi%her than (r%entina9s2 :n the other hand India had a lot of su--ly of
;0arabeef2< (fter 0areful analysis of the situation the PCC thou%ht that this 1as a %ood o--ortunity for
them to brea" into the lo0al 0anned 0orned beef mar"et2 =hey ha4e finally de0ided to -ut u- the 0annin% of
beef at the 0om-any9s old -lant in =a%ui%2 It 1as estimated that ma0hinery and -lant equi-ment 1ould 0ost
them Ph- 3)) ! 1hile other 0i4il 1or"s 1ould 0ost them around Ph- 35 !2 =hese 0i4il 1or"s 1ill be
funded out of Retained >arnin%s 1hile the ma0hine and equi-ment 1hi0h 1ould be mostly im-orted 1ould
be funded by debt2 In order to fund these e?-enses the 0om-any ne%otiated 1ith finan0ial institutions and
they 1ere %i4en t1o o-tions2 Both o-tions in0lude lon% term loans -ayable in ei%ht years 1ith a %ra0e
-eriod on -rin0i-al of t1o years2 =he first o-tion 1as that the loan 1ould be denominated in Phili--ine
Pesos 0arryin% an interest rate of 3258 1hile the loan for the se0ond o-tion 1ould be denominated in >uro
1ith an interest rate of 52582 @o1 PCC has to ma"e a de0ision 1hether to a00e-t the first o-tion or the
se0ond o-tion 1ith the 0onsideration of a0hie4in% lo1er 0ost at the end of the transa0tion2 (side from that
PCC has to qui0"ly 0hoose the best 0ountry on 1hi0h they 0an %et their su--ly of quality beef for their
0anned 0orned beef mar"et2 (r%entina (ustralia or India these are the three 0hoi0es for PCC to ma"e and
they must 0onsider all fa0tors and issues affe0tin% the de0ision in order to %et the best su--ly of beef2
Problems:
,2 (mon% (r%entina (ustralia or India 1hi0h 0ountry 1ould Phili--ine Cannin% Cor-oration 0hoose to %et
their su--ly of beef for their 0anned 0orned beefA
+2 In order to fund the beef 0annin% a0ti4ity of PCC 1hi0h amon% the t1o loan o-tions 1ould they 0hooseA
II. Statement of Objectives/s
In order to ans1er the -roblems -resented the %rou- formulated obBe0ti4es2
,2 =o e4aluate 1hi0h 0ountry from (r%entina (ustralia or India 1ould be the best o-tion for PCC to
%et their su--ly of beef2
+2 =o analyze 1hi0h loanin% o-tions 1ould be best for PCC2
32 =o ma"e -ro-er re0ommendations as to 1hy a 0ountry 1as 0hosen for the su--ly of beef and 1hy a
loan o-tion 1as 0hosen2
C2 =o identify -otential -roblems that may arise from the re0ommendations and su%%est -lans of
a0tions2
III. Methodology
In order to analyze and sol4e the -roblem the %rou- 1ill utilize the internet and other sour0es to
e?tra0t information that are needed in order to sol4e the -roblems2 !oreo4er the %rou- o-ted to use
Stren%ths Dea"nesses :--ortunities and =hreats .SD:=/ analysis2 =hese 1ould hel- in aidin% the %rou- to
0ome u- 1ith the -ro-er re0ommendations for PCC 1hile 0arefully analyzin% the interests trends
0urren0ies and mar"ets of ea0h 0ountry2 Eoans 1ill be 0al0ulated by usin% a sim-le interest formula ;IFPR=<
1herein I re-resents the total amount of interest -aidG P re-resents -rin0i-al or amount borro1ed or lentG R
for the rate 1hi0h is re-resented by a -er0enta%e 1hile = refers to time in years of the loan2
IV. Scope and Limitations
=he s0o-e of the -a-er 1ill handle and offer an analysis of (ustralia (r%entina India and Phili--ines of
their beef se0tor throu%h Stren%ths Dea"nesses :--ortunities and =hreats .SD:=/ analysis2 In addition
throu%h the analysis of their 0urren0y inflation rates interest rates 0ulture lo0ation trade la1s -oliti0al and
e0onomi0 0onditions the %rou- 1ould be able to de0ide 1hi0h 0ountry 1ould be best suited as the su--lier
for the Phili--ine Cannin% Cor-oration2 !oreo4er there 1ould be an assessment re%ardin% the t1o loans
and 1hat 1ould be most a--li0able 1ith re%ards to the de0ision of the 0om-any2 =he -a-er 1ould also
-resent the forei%n e?0han%e rate of the &nited States of (meri0a bein% as the medium for the 0urren0y of
the (r%entine Peso and the Indian Ru-ee2
V. Analysis
.! S"pply of #eef
52,2, SD:= (nalysis for Phili--ine Cannin% Cor-oration
Strengths $ea%nesses
PCC is number , in the 0anned tuna mar"et2 !ost of their equi-ments are im-orted2
PCC is the mar"et leader in sardines2 'o not ha4e enou%h finan0es to
su--ortHfund the beef 0annery2
I)8 of tuna -rodu0e is sold in the lo0al mar"etG
,)8 is e?-orted in >uro-e2
=hey do not e?-ort sardines2
+38 of the sardines se%ment belon%s to PCC2
Opport"nities &hreats
!ar"et o--ortunity for lo0al 0anned 0orned beef !a0hinery and -lant equi-ments 0ost Ph-
3)) !
&nused old -lant in =a%ui% Buildin% refurbishment modifi0ation and
other 0i4il 1or"s 0osts Ph- 35 !
(--roa0hed by a dele%ation from (r%entina to buy #o4ernment -oli0ies and re%ulations on
quantities of beef at 4ery attra0ti4e -ri0es2 im-orts
(ustralia is one o-tion a-art from (r%entina 1ith
quotes 5678 hi%her than (r%entina9s
Curren0ies of (r%entina and India are 1ea"2
India is also one of the o-tions for beef su--ly and
the 0ountry -rodu0e ;0arabeef<
International trade -oli0ies
52,2+ :ther Fa0tors
'actors Philippines
Eo0ation It is an ar0hi-ela%o off 0oast of Southeast (sia total 3))))) square "ilometers land area
+I3,*) square "ilometers2 It is near the Pa0ifi0 :0ean2
Culture and
Business
>n4ironment
=he Fili-ino 0ulture is a mi?ture of !alay S-anish and (meri0an2 It is said that FIli-inos
are hi%hly o-timisti0 and hos-itable2 Juman intera0tion and other forms of so0ialization is
re%arded as hi%hly im-ortant in order to ha4e a su00essful business relationshi-2 In
business de0isions are usually made by the to- mana%ement sin0e they follo1 a
hierar0hi0al system in most of the business or%anizations and so de0ision6ma"in% and
information dissemination is often slo1 be0ause the hierar0hy must be stri0tly follo1ed2
Dhen it 0omes to the -ubli0 se0tor 0orru-tion is 4ery e4ident unli"e the some of the
-ri4ate se0tors2 Businesses tend to be biased in some 1ay be0ause families 1ho ha4e the
1ealth and -o1er are dominant in the mana%ement thus affe0tin% de0ision6ma"in%2
Sometimes equal 0om-etition is not seen in the business or%anizations be0ause of
fa4oritism in those 1ith abundant -o1er2
Curren0y Phili--ine Peso
Interest Rates +))3 6 52I)8
+))I 6 C2))8
+),) 6 C2))8
+),, 6 C25)8
+),+ 6 32*58
Inflation Rates +))3 6 32))8
+))I 6 C2C)8
+),) 6 32,)8
+),, 6 C2+)8
+),+ 6 +23)8
=rade Ea1s =he 4alue of im-orted -rodu0ts for the Fili-inos are hi%h2 :-en tradin% system and
unilateral liberalization is e?-erien0ed in the Phili--ines2 In addition it is 0ommitted to the
(S>(@ Free =rade (%reement2 =he Phili--ines9 ma?imum tariff on all %oods .e?0ludin%
al0ohol and toba00o/ has been equal to 75 -er0ent sin0e +))52
Politi0al
Condition
Re-ubli0
>0onomi0
Condition
>0onomi0 %ro1th is about 58 sin0e +)),2 'urin% the year +))* a #'P %ro1th of *8 1as
e?-erien0ed ho1e4er it slo1ly de0lined to 3238 in +))3 be0ause of the 1orld finan0ial
0risis2 =he #'P 0ontinued to dro- until the year +))I 1ith ,2,8 ho1e4er it rose to *278
in the year +),)2 Slo1ly durin% the year +),, it dro--ed to 32*8 and it 1as -redi0ted that
the year +),+ ha4e an a--ro?imate #'P of C2+82

52,23 SD:= (nalysis for (r%entines Beef Industry
Strengths $ea%nesses
(bundan0e of resour0es in the beef se0tor Eon% deli4ery time due to distan0e
Kery affordable -ri0es !eats quality 1ill deter or 0han%e due to lon%
tra4el time
Stri0ter re%ulations ha4e been im-osed on
0om-anies
'e0reasin% -rodu0ti4ity
Opport"nities &hreats
Com-etiti4e e?0han%e rate 6 de4aluation of
(r%entine Peso
=ariff or Prote0tionism
BS> and F!' 0an deter -rodu0tion and out-ut
Strengths
(r%entina has been "no1n for its quality of beef around the 1orld bein% the third lar%est e?-orter of beef
behind (ustralia and Brazil2 =hey are "no1n to ha4e quality beef and an abundan0e of it and %i4en the
situation from the 0ase study the a%ent 1as 1illin% to offer fle?ible and attra0ti4e -ri0es for the sale of beef2
!oreo4er the %o4ernment has im-osed se4eral standards for the beef quality most re0ently 1ith the 0reation
of ICPK( .=he (r%entinian beef institute/2 =his ensures interested buyers that (r%entina has -ut a lot of
fo0us in its beef industry %i4in% the buyers assuran0e of its quality2
$ea%nesses
=here has been a de0reasin% -rodu0ti4ity of the beef e?-ortin% business in (r%entina2 =here are
se4eral fa0tors but one maBor mo4e made by President $ir0hner 1as the sta"e that hurt the beef e?-ortin%
industry2 'ue to the risin% -ri0es and the de-re0iation of their 0urren0y the then -resident banned the e?-ort
of beef for ,3) days and in0luded an e?-ort ta? after 1hi0h2 (nother 0onsiderable 1ea"ness 1ould be the
tra4el time needed to trans-ort the meat from (r%entina to the Phili--ines2 Be0ause of the distan0e the
transa0tion 1ould ta"e lon%er than usual and one 1ould e?-e0t more o00urren0es of delay2 =his 1ould be
4ery demoti4atin% as meat need to be in a 0ertain tem-erature and en4ironment for it stay fresh yet the tra4el
time 0an deter its quality into somethin% else 1hen it rea0hes the Phili--ines2
Opport"nities
=he (r%entinian -eso has been %ro1in% 1ea"er de-re0iatin% 1hi0h 0ause President $ir0hner to ta"e
radi0al a0tions in order to sa4e the -o1er of its 0urren0y2 Jo1e4er e?-orters and interested buyers 1ould
see this as an o--ortunity2 (s the (r%entine -eso %oes 1ea"er it 0on4ersely %i4es more buyin% -o1er to the
forei%n buyer 6 lets say a%ainst the (meri0an dollar2 Be0ause of the 1ea"enin% 0urren0y the (meri0an dollar
0an no1 buy more of the (r%entine -rodu0t if all else stay equal 1ith re%ards to the (meri0an dollar2 Jen0e
sin0e the real -ri0e of the (r%entine beef 1ent do1n then it %i4es more buyin% -o1er to the forei%ners 1hi0h
1ould in0rease the sales of the beef e?-orts2
&hreats
In international business there is al1ays the threat of the tariff rates or trade la1s 1ith the 0ountry you are
tradin% 1ith2 =hese %o4ernment -oli0ies 0an hurt your trade and 0an si%nifi0antly redu0e your -rofit or e4en
deter you from tradin% 1ith the 0ountry itself2 (nother threat to the (r%entinian beef industry 1ould be the
-re4alen0e of diseases su0h as BS> or F!'2 =hese diseases 0an 0onsiderably hinder -rodu0tion or de0rease
-rodu0tion 1hi0h 1ould hurt the lo0al farmers and the beef industry2 (lthou%h the #o4ernment has issued
-oli0ies in order to standardize meat -ro0essin% -lants there 0an be no assuran0e that there 1ould not be an
outbrea" of a 0ertain 0ommuni0able disease2
52,2C :ther Fa0tors
'actors Argentina
Eo0ation South (meri0a borders 1ith Boli4ia 33+ "m Brazil ,++C "m Chile 5,5) "mPara%uay
,33) "m &ru%uay 5*I "mG'istan0e bet1een (r%entina to Phili--ines is ,*,C52+3"m2
Culture and
Business
>n4ironment
6 S-anishG also Italian #erman >n%lish and Fren0h
6 (r%entines are on "no1n to be blunt and dire0t and still be able to remain ta0tful and
di-lomati0
6 In business settin%s (r%entines (re relationshi-6dri4en 0ulture so it is im-ortant for
them to build net1or"s and use them2
6 =hey maintain and use an intri0ate net1or" of familt and friends to 0all u-on for hel-
fa4ours and assistan0e and if fa4our is done for you e?-e0t taht you 1ill e4entually be
0alled u-on to re6-ay it2
6 (r%entina business stru0ture is more on heirar0hi0al2 'e0isions and ideas are %enerated
at the to- and status is im-ortant for them2
Curren0y (r%entine Peso
Interest Rates +))3 6 ,,25)8
+))I 6 I23)8
+),) 6 I2))8
+),, 6 I2))8
+),+ 6 I2))8
Inflation Rates +))3 6 *2+)8
+))I 6 *2*)8
+),) 6 ,)2I)8
+),, 6 I25)8
+),+ 6 I2I)8
=rade Ea1s 6 (r%entina has remo4ed 4irtually all non6tariff barriers to trade in the year ,II, and
redu0ed its tariff rates2 =he only non6tariff barrier is the tariffHquota system a--li0able to
the auto and auto -arts im-orts2
6 (r%entina9s %o4ernment has both Free =rade (rea of the (meri0as and !>RC:S&R for
the 0om-lementary -ro0essess of the hemis-heri0 inte%ration that are ne0essary not only
for %eneratin% trade o--ortunities but also for -romotin% de4elo-ment and stren%thenin%
the re%ionLs -osition internationally
Politi0al
Condition
Re-ubli0
>0onomi0
Condition
6 #'P of more than &SM373 billion in +),) (r%entina is one of the fi4e lar%est e0onomies
in South (meri0a2
6 (r%entinaLs ma0roe0onomi0 -erforman0e in re0ent years has been stron%2 Conse0uti4e
years of ra-id and -ro6-oor e0onomi0 %ro1th enabled -o4erty and unem-loyment to be
0ut to le4els e?-erien0ed -rior to the 0ountryLs 0onsum-tion and in4estment 1hi0h
in0reased ,,23 -er0ent and ,I25 -er0ent res-e0ti4ely2 ),6+))+ e0onomi0 0risis2
6>0onomi0 a0ti4ity %re1 by I2I -er0ent durin% the first quarter of +),,2 =his %ro1th has
been s-urred by -ri4ate 0o2
52,25 SD:= (nalysis for (ustralian Beef Industry
Strengths $ea%nesses
!aBor >?-orter Kolatile >n4ironment
Shorter =ra4el =ime >?-ensi4e
>ffi0ient Produ0tion !ethods
'isease free status
Opport"nities &hreats
(ttainment of %reater effi0ien0ies Climate Chan%e
Prote0tionism
'isease Jazards
Strengths
(ustralia is se0ond lar%est beef e?-orter in the 1orld Bust behind Brazil 1hi0h sho1s ho1 abundant they
are in the resour0e and ho1 effi0ient in handlin% it2 (nother stren%th is that out of all the 0ountries -resented
to the Phili--ine Cannin% Cor-oration it is (ustralia 1ith the shortest tra4el time 1hi0h not only ensures
better quality but also ensures 0hea-er 0osts2 (ustralia is also "no1n to ha4e effi0ient and u- to date methods
for their beef industry be0ause they tend to ha4e 4olatile 1eather o4er there2 Dhi0h 0on4ersely in0reases
their -rodu0tion as their te0hnolo%y in0reases2 !oreo4er the Dorld :r%anization for (nimal Jealth has
%i4en (ustralia the BS> disease free status 1hi0h 1ould boost 0onsumer 0onfiden0e of the quality of their
beef2
$ea%nesses
(ustralian beef is noted to be e?-ensi4e and as said in the 0ase study the a%ent 0ame by and a%reed
that the sale of the beef 1ould ha4e a hi%her mar" u- as 0om-ared to (r%entina and su0h2 (lthou%h this
0ould be seen as a bad thin% the effi0ien0y of their -rodu0tion abundan0e of the resour0e and the lo0ation
1ould offset the -ri0e in0rease ho1e4er it remains to be 0ertain as ho1 mu0h this 1ould hel- de0rease the
mar" u-2
Opport"nities
=he attainment of %reater effi0ien0ies 1ould %reatly hel- (ustralia in a number of fa0tors2 =his
te0hnolo%i0al ad4an0ement or better methods 1ould hel- them in0rease -rodu0tion quality and lo1er 0ost
1hi0h 1ould %enerally offset their hi%h -ri0es2 =his 1ould im-ro4e the -erforman0e of (ustralia and 1ould
ma"e it %enerally easier for them to sell to other 0ountries2
&hreats
(ustralia is a 4ery 4aried 0ountry es-e0ially 1ith its 1eather2 =hese 0limate 0han%es 0an start 1ith hu%e
rainfalls to dense hot air2 =hese 0limate 0han%es 1ould 0ertainly affe0t the -rodu0tion of beef these abru-t
1eather 0han%es 1ould hinder and redu0ed the out-ut2 If this ha--ens this 0ould be a threat to beef
industry not only 1ould it limit its sale in the %lobal mar"et but also in the domesti0 mar"et2 (nother threat
1ould be disease hazards althou%h (ustralia 1as %ranted a disease free status one 0an ne4er "no1 for sure
that it 0an sustain su0h 0oronation2 =here 1ould al1ays be that outside ris" or 0han0e for a disease 6 ne1 or
not 6 to e?-un%e itself2
52,27 :ther Fa0tors
'actors A"stralia
Eo0ation :0eania 0ontinent bet1een the Indian :0ean and the South Pa0ifi0 :0ean 'istan0e
bet1een (ustralia to Phili--ines is CCC+2C5 "m
Culture and
Business
>n4ironment
6>n%lish is the -rimary lan%ua%e in the 0ountry
6 (ustralia has a 4ery e%alitarian 0ulture to a4oid differentations bet1een indi4iduals
they try to a4oid dra1in% too mu0h attention to their a0ademi0 qualifi0ations -ersonal
a0hie4ements or business su00ess sin0e this may be -er0ei4ed as arro%an0e
6 (ustralian also are o-en and dire0t manner es-e0ially in business 1here they are
re0e-ti4e to ne1 ideas and en0oura%e li4ely dis0ussion or debate
6 (ustralian establish -ersonal relationshi-s 1ith those you are 0ondu0tin% business 1ith2
It is im-ortant to ma"e 0onne0tions 1ith established re-resentati4es 1ho are able to hel-
build those relationshi-s2
6 (ustralian business 0ulture -refers a more 0ollaborati4e a--roa0h to
1or" and therefore mana%ers and subordinates ali"e 1ill %i4e their in-ut and
0onsider the o-tions before rea0hin% a final de0ision2
Curren0y (ustralian 'ollar
Interest Rates +))3 6 C2+58
+))I 6 32*58
+),) 6 C2*58
+),, 6 C2+58
+),+ 6 325)8
Inflation Rates +))3 6 32*)8
+))I 6 +2,)8
+),) 6 +2*)8
+),, 6 32,)8
+),+ 6 ,2+)8
=rade Ea1s :-en internationally 0om-etiti4e e?-ort6oriented e0onomyG unilaterally redu0in% hi%h
tariffs and other -rote0ti4e barriers to free trade2
6 It has a a4era%e tariff rate of ,2I -er0ent
Politi0al Condition Constitutional monar0hy: demo0rati0 federal6state system and Common Ea1
>0onomi0
Condition
6 (ustralia has rea0hed o4er M3)) billion in e?-orts durin% a ,+ month -eriod2 >?-ort
-erforman0e resulted in an annual trade sur-lus of M,323 billion2
6 Its e0onomi0 freedom s0ore is 332, that ma"es its e0onomy the 3rd freest in the +),+
inde? also it has o4erall s0ore is )27 hi%her than last year refle0tin% better s0ores in trade
freedom2%o4ernment s-endin% and fis0al -roblem
6 (ustralia9s e0onomy has re0orded a 32+ -er0ent %ro1th in the year to Nune +),+ ma"in%
it a stron% e0onomi0 0ondition
P('(#'(# 'I=: IF $(O( P( =J(@$S :/
52,2* SD:= (nalysis for Indian Beef Industry
Strengths $ea%nesses
:ne of the leadin% beef -rodu0in% P e?-ortin% nations >?istin% ban on beef im-orts Q due to
reli%ious beliefs of the Indians
Im-orted Indian buffalo meat is 0hea- .0arabeef/ >?-orts from India are banned by almost
all Destern >uro-ean 0ountries
(bundan0eHa4ailability of resour0es
!any Buffalo !eat and easier to breed
Opport"nities &hreats
Re4ision of the >RI! -oli0y 6 to allo1 beef e?-orts @e1 Com-etitors
In0rease -rodu0tion by im-ro4in% te0hnolo%y Eo1er Pri0es
>?-andin% 'airy Jerd >ffi0ien0y Im-ro4ements In0reased
Slau%hter and -ri0e 0om-etiti4eness in the International !ar"et
Stron%er e?-ort 0om-etitors su0h as
Canada Brazil the &S and @e1 Zealand
Strenghts
India is one of leadin% e?-orters 1ho ha4e re0ently o4erta"en (meri0a to be the third lar%est e?-orter of
beef before Brazil and (ustralia2 =he abundan0e of resour0es and ability to sell it 0hea- has %arnered the
meat industry of India 1ith so many 0om-etiti4e le4era%e o4er the other e?-orters2 (lthou%h most beef are
not 0o1 beef but rather 0arabeef they still maintained a hu%e e?-ortation of beef %i4en the abundan0e of
1ater buffalos in the area2
$ea%nesses
>4er sin0e the la1 that bans the sale and slau%hter of the 0o1 in India the meat industry too" a massi4e
blo12 (lthou%h the industry re0o4ered and mana%ed to be one of leadin% e?-orters in the 1orld by
substitutin% 0o1 beef for beef from the 1ater buffalo or the 0arabeef2 Be0ause of reli%ious 4ie1s and
-ra0ti0es there 1ould be no transa0tions in4ol4ed 1ith 0o1 beef anymore2 =his 1ould ham-er the e0onomy
be0ause they had to 0ut loose a lu0rati4e o-eration2 (nother -oint of 1ea"ness for India to e?-ort beef in
Destern >uro-e 1hi0h 1ould hinder the %ro1th of the meat industry of India2
Opport"nities
Co1s are noted as a maternal fi%ure and a sa0red animal in India it ham-ers 1ith the meat industry2
(lthou%h India has been the third lar%est e?-orter of beef the beef is usually from 1ater buffalo and that by
re4isitin% the >RI! -oli0y 1hi0h tal"s about rules and re%ulations of im-ortin% and e?-ortin% in India this
1ould %i4e the meat industry a 4ery lu0rati4e o--ortunity2 Furthermore India9s trade has been throu%hout
south east asia and the middle east and there has been %ro1in% trends of 0o1 beef in the middle east and this
further ele4ates the o--ortunity for India to re4isit their -oli0y2
&hreats
Puttin% aside the taste and quality of the 0arabeef the only ad4anta%e India has o4er other stron% e?-orters
su0h as (r%entina or &S is the fa0t that 0arabeef is 0hea-er 0om-ared to beef2 Jo1e4er the 1orld is
be0omin% more and more of a %lobal mar"et 1here somebody from a0ross the 1orld 0an ma"e a sale to
somebody else else1here2 =his 1ould 0onsiderably standardized and lo1er -ri0es as the mar"u- of ea0h
0om-any %oes do1n2 If -ri0es 0ontinue to %o do1n the ad4anta%e of the 0arabeef 1ould be slo1ly diminish
hen0e 1ould hurt the Indian beef se0tor2
52,23 :ther Fa0tors
'actors India
Eo0ation Southern (sia borderin% Ban%ladesh C)53 "m Bhutan 7)5 "m Burma ,C73 "mChina
333) "m @e-al ,7I) "m Pa"istan +I,+ "mG
'istan0e bet1een India to Phili--ines is C73)2C3"m
Culture and
Business
>n4ironment
6 @orth Part of India is more 0onser4ati4e 1hen it 0omes to business 0om-are to South
Part of India2
6Jierar0hy System 1hen it 0omes to business 0ulture be0ause of its roots in Jinduism and
Caste System
6 Indians deal fa4ourably 1ith those they "no1 and trust
6 Jindi is the offi0ial national lan%ua%e of the 0ountry mostly all Indians 0an tal" and
s-ea" en%lish fluently too2
6 @amaste
Curren0y Indian Ru-ee
Interest Rates +))3 6 72))8
+))I 6 C2+58
+),) 6 72+58
+),, 6 325)8
+),+ 6 32))8
Inflation Rates +))3 6 I2*)8
+))I 6 ,C2I*8
+),) 6 I2C*8
+),, 6 *25)8
+),+ 6 *2+58
=rade Ea1s In0reasin%ly liberal forei%n in4estment and e?0han%e re%imes industrial
de0ontrolredu0tions in tariffs and other trade barriers o-enin% and modernization of the
finan0ial se0tor si%nifi0ant adBustments in %o4ernment monetary and fis0al -oli0ies and
more safe%uards for intelle0tual -ro-erty ri%hts2
Politi0al
Condition
Federal Re-ubli0 Common Ea1
>0onomi0
Condition
6 In +),, IndiaSs e0onomi0 %ro1th has slo1ed to belo1 * -er0ent and the sto0" mar"ets
mirrored the 1ea"enin% e0onomi0 0onditions but re0o4ered some1hat in early +),+2
6 IndiaSs e?-orts 1ere %ro1in% 4ery stron%ly throu%h +),, des-ite the 1orsenin%
e0onomi0 0onditions in >uro-e 1hi0h 0ontinued to be IndiaSs most im-ortant e?-ort
mar"et2
6 IndiaLs forei%n e?0han%e .Fore?/ reser4es in0reased by &SM ,2C billion in the 1ee"
ended (-ril +) +),+
.( )"rrencies of *nited States and +"rope as opposed to Philippines, Argentina, A"stralia
and India -*S./P0P1A2S1A*.1I32 and +*2/P0P1A2S1A*.1I324
52+2, Curren0ies as of (u%ust +),+
Philippines Argentina A"stralia India
&2S 'ollar C,23*3I5I C25C3 )2I*)5C3 5523*35C,
>uro 5)2I3,* 5253I*CC ,2,I+355 732)73,CC
Sour0e: htt-:HH1112?6rates20om
52+2+ Curren0ies as of +),,
Philippines Argentina A"stralia India
&2S 'ollar C327, C2+35,*+ )2I3*C*I 5+2C375I5
>uro 5*2337*3 52733C7C ,2+II333 732II75
Sour0e: htt-:HH1112?6rates20om
52+23 Curren0ies as of +),)
Philippines Argentina A"stralia India
&2S 'ollar C32I)* 32I*CC)7 ,2))7)I3 C52)*3)3C
>uro 532)5I3*, 52+555 ,233)C 5I27),7I5
Sour0e: htt-:HH1112?6rates20om
52+2C Curren0ies as of +))I
Philippines Argentina A"stralia India
&2S 'ollar C723C+ 323)375C ,2,,),+I C72573*3,
>uro 7*2C*C* 52533,C ,27,735C 7*23)C33C
Sour0e: htt-:HH1112?6rates20om
52+25 Curren0ies as of +))3
Philippines Argentina A"stralia India
&2S 'ollar C*2I+5 32C+35I3 ,2CI,IC3 C325)335,
>uro 7C2*,, C27++*33 +2),C5)5 752CI,IC
Sour0e: htt-:HH1112?6rates20om
Based on the 0urren0ies tables from years +))3 to +),+ it 1ould be better if Phili--ine Cannin%
Cor-oration im-ort its beef from (ustralia2 Sin0e the 4alue of (ustralian 'ollar a%ainst the &S 'ollar is
de-re0iatin% the e?-orts of -rodu0ts from (ustralia 1ill be 0hea-er2 In the im-ortation -ro0ess the
transa0tions or 0osts 1ill be in &S 'ollars 1hile the re4enue 1ill be in Phili--ine Peso2 !oreo4er the &S
'ollar is 1ea"enin% be0ause the 4alue of the Phili--ine Peso is be0omin% stron%G therefore the demand for
the beef 1ill in0rease as Ph- is be0omin% stron%er than &S'2 .=(!( B(A(''H>'I= PE>(S>/
.5 Loan Options
52, >uro-ean &nion9s Interest Rate
(667 (668 (6!6 (6!! (6!(
+25)8 ,2))8 ,2))8 ,2))8 )2*58
Sour0e: htt-:HH1112tradin%e0onomi0s20omHinterest6rates6list6by60ountryA0FeuroTarea
52+ >uro-ean &nion9s Inflation Rate

(667 (668 (6!6 (6!! (6!(
,27)8 )2I)8 +2+)8 +2*)8 +2C)8
Sour0e: htt-:HH1112tradin%e0onomi0s20omHinflation6rates6list6by60ountryA0FeuroTarea
523 >uro-ean &nion9s >?0han%e Rate .>&R:PJP/
9ear +:change 2ate 9ear +:change 2ate
+))3 7C25)5 +),5 5*2)+7
+))I 7*2*)7 +),7 5723+,
+),) 532)5) +),* 5727*3
+),, 5*253* +),3 5*23,*
+),+ 5)2I3,* +),I 5*2C+I*
+),3 5I2*55I +)+) 5*2,5C3
+),C 5323)7 +)+, 5*2,3)
Sour0e: htt-:HHsd12e0b2euro-a2euHqui0"4ie12doAS>RI>SU$>OF,+)2>RR2!2PJP2>&R2SP))2(
>uro-ean &nion9s interest rates and inflation rates 1ere sho1n in a table in order to understand the trend
from +))36+),+2 Jo1e4er the >uro-ean >?0han%e Rate as a%ainst the Phili--ine Peso 1as fore0asted until
+)+, that 1ill be used to analyze the return of the loans for the t1o o-tions %i4en by the finan0ial
institutions2 ( sim-le mo4in% a4era%e 1as used to fore0ast the >uro-ean &nion and Phili--ine Peso
e?0han%e rates from +),+ u- to +)+,2 (s seen in the table the interest rates a4era%e is at ,8 1hi0h means
that Phili--ine Cannin% Cor-oration 0an borro1 money usin% the >uro-ean denomination 1ithout mu0h
1orry as interest e?-ense 1ill not be hi%h2 In terms of inflation rate the >uro-ean &nion9s -ur0hasin% -o1er
is still hi%h be0ause the 0han%e in inflation rate is not that bi% and so if PCC is 0onsiderin% to e?-ort their
0anned beef in >uro-e they 1ill still earn money2
VI. Alternative )o"rse of Actions
;.! S"pply of #eef
72,2, (ustralia
Im-ortin% beef from (ustralia 1ould be %ood for the Phili--ines be0ause it is 0loser 0om-are
to the other 0ountries2 =herefore the trans-ortation 0ost 1ill be minimal2 But the im-ortation 0osts should be
0onsidered sin0e tariffs and other barrier to trade in this 0ountry is stri0t and hi%h 1ith the a4era%e tarrifs of
,2I2 Dhen it 0omes to -rodu0in% enou%h su--y and its -ri0es (ustralia is se0ond to the lar%est e?-orter so
ha4in% a business 1ith (ustralias 1ill -ut you in a %ood tradin% -osition2
P('(#'(# P( 'I=: PES :/
72,2+ (r%entina
(r%entina is -o-ular for its quality beef2 =hey are the third lar%est e?-orter of beef
behind (ustralia and Brazil2 =heir %o4ernment 0reated =he (r%entinian Beef Institutes
that ensures the standard of the beef is of hi%h quality2 =his 0an %reatly affe0t the outloo"
of forei%n buyers as they 1ant to -ur0hase beef 1ith hi%h quality2 Jo1e4er if Phili--ine
Cannin% Cor-oration 1ill attem-t to %et their su--ly of beef in (r%entina they must
0onsider the 0ost of trans-ortation and stora%e be0ause (r%entina is farther than (ustralia
and India also the -ri0e of the (r%entine Beef is a bit more e?-ensi4e be0ause of the hi%h
quality and the lo1 use of %ro1th enhan0ers ma"in% it more e?-ensi4e
72,23 India
India has in0reased its beef -rodu0tion by +,8 sin0e +))) and no1 has a
73 million head herd 0om-ared to its other 0om-etitors .(ustralia only +7
million/2 By this year India 1ill re-la0e the &S( as the ne1 1orld9s third
lar%est beef e?-orter2 In the first half of +),+ India has already e?-orted M,2+C
billion 1orth of meat2 =hou%h they are stron% 1hen it 0omes to e?-ortin% beef
the ;0arebeef< that they used is a do1nside to the Phili--ines if they 1ant the
beef from the 0o12 But if the -ri0e is ta"en into 0onsideration2 =hen India 1ould
ha4e mu0h lo1er -ri0es 0om-ared to the normal 0o1 beef2
;.( Loan Options
72+2, (00e-t loan denominated in Phili--ine Pesos 0arryin% an interest rate of 32582
Solution: IFPR=
IFPh- 3)))))))) V )2)35 V 3
IFPh- +)C))))))
=otal (mount after 3 years F Ph- 3)))))))) T Ph- +)C))))))
Final (ns1er: =herefore the total amount to be -aid after 3 years is
Ph- 5)C))))))2
72+2+ (00e-t loan denominated in >uro 0arryin% and interest rate of 52582
, >&R: F Ph- 5)2I3,* .as of (u%ust )3 +),+/
Solution: IFPR=
IF.Ph- 3))))))))H5)2I3,*/ V )2)55 V 3
IF533CC7C2C+5 >&R: V )2)55 V 3
IF+53I,7C23C* >&R:
+53I,7C23C* >&R: F Ph- ,3+))))))
=otal (mount after 3 years F Ph- 3)))))))) T Ph- ,3+))))))
Final (ns1er: =herefore the total amount to be -aid after 3 years is
Ph- C3+ ))))))2
72+23 -+*2O +<)0A3=+ 2A&+S )0A3=+, 'O2+)AS& O' I3&+2+S& +<P+3S+ A3.
P2I3)IPAL &O #+ PAI. 'O2 +I=0& 9+A2S4
9ear +:change 2ate Interest +:pense
+),+ 5)2I3,* Ph- ,3+))))))
+),3 5I2*55I ,*CI,)332)+
+),C 5323)7 ,*+,3)33235
+),5 5*2)+7 ,77I+),*2)3
+),7 5723+, ,773+),,2*,
+),* 5727*3 ,75I),5C23C
+),3 5*23,* ,7I+35CI2*7
+),I 5*2C+I* ,73,),3327,
+)+) 5*2,5C3 ,7*+I5*,253
&otal Php!5,67!,;68.86
=otal (mount to be -aid 1ith + years %ra0e -eriod F Ph-
VII. )oncl"sions and 2ecommendations
&rading >ith A"stralia >ill be the best choice compared to Argentina and India. &his beca"se, after
considering all aspects in the analysis of the three co"ntries. A"stralia >ill provide the Philippines >ith
?"ality beef and at the same reasonable prices even
VIII. Potential Problem Analysis
I<. #on"s @"estion/ #i4en that the >uro o-tion 0arries a lo1er interest 1hat must ha--en to the PhP:>uro
e?0han%e rate in order that the interest rate ad4anta%e 1ould be ne%atedA Oou 0an %i4e either a rate of
in0rease or de0rease a formula to 0om-ute the rate or an absolute 4alue2
So"rces/
htt-:HH1112tea0hers0hoi0e20om2auHmathsUlibraryHmoneyHsim-leUinterest2htm
htt-:HH1112meattradene1sdaily20o2u"Hne1sH,+)C,+HindiaUUUtheUbeefUindustryUinU%oodUsha-reU2as-?
htt-:HH1112ft20omH0msHsH)HCfdCdIC36b3)56,,e,6a,dC6)),CCfeabd0)2html#a?zz++=a'IB7e
htt-:HH1112mon%abay20omHhistoryH-hili--inesH-hili--ines6%eo%ra-hy2html
htt-:HH1112%fma%20omH%d-6data60ountry6re-ortsH,I36the6-hili--ines6%d-60ountry6
re-ort2html#a?zz++dR+:SD,
htt-:HH1112remburssi2or%H-roBe0tsH-hili--inesH0ulture2htm
htt-:HHinfo21orldban"2or%HetoolsH1tiHdo0sHPhili--inesUbrief2-df
htt-:HH1112tradin%e0onomi0s20omHinterest6rates6list6by60ountry
htt-:HH1112tradin%e0onomi0s20omHinflation6rates6list6by60ountry
htt-:HH1112tradin%e0onomi0s20omHinterest6rates6list6by60ountryA0FeuroTarea
htt-:HH1112tradin%e0onomi0s20omHinflation6rates6list6by60ountryA0FeuroTarea
htt-:HHsd12e0b2euro-a2euHqui0"4ie12doAS>RI>SU$>OF,+)2>RR2!2PJP2>&R2SP))2(
http///sitereso"rces.>orldban%.org/I3.IA+<&3/2eso"rces/(875A
!5(7BCC(;CB7!/IndiaD+conomicD*pdataDMarch(6!(.pdf