In Order to remain more competitive on a global scale, often companies today are deciding to globalize their markets by taking their businesses to outside countries. Successful implementation of products and services into a foreign market requires the business to conduct a necessary analysis of all the risks involved and create any applicable strategic plans addressing these issues. In this paper, a risk analysis will be conducted to help Playa Frente successfully open and run a hotel in Mexico.Political, Legal and Regulatory Risks The political, legal and regulatory risks of opening a hotel in Mexico vary. Playa Frente's plan is to acquire an existing hotel and move it under its own bra ...view middle of the document...
Playa Frente's entrance into the market will give people more options and make the market more competitive. These companies have done very well in Mexico and have opened the door for companies, such as Playa Frente.Taxation and Double Taxation RisksThe US-Mexico tax Treaty sets the standards regarding taxation and double taxation. The agreement outlines what taxes are covered, defines who the parties and the context of the agreement and itemizes what is covered under the agreement. The agreement outlines the rules under which a business' profits are taxed and when double taxation comes into play. The agreement defines the establishment of permanent residence, which Playa Fente would seek to have by opening a hotel in the country on a permanent basis. This treaty details how the permanent resident is taxed and under what circumstance double taxation applies. Based on the information contained in the agreement, could be possible that Playa Frente may be double taxed.Market Risks (4 P's)Marketing decisions are based on four areas sometimes referred to as the "Marketing Mix." These areas consist of product, price, place and promotion. These areas are parameters that a marketing manager can control, subject to the internal and external constraints of the marketing environment (NetMBA, 2008).Service and accommodations are the products. The price must remain competitive with other resorts in the area. The resort is located in a designated tourist area and therefore, is an advantage in marketing the resort. Promotion will be conducted by internet, travel agencies, magazines and word of mouth from satisfied customers.Distribution/Supply Chain Risks Supplies require for a resort are common items such as furniture, décor, linens, food and beverages. These types of supplies will be easily obtained in Mexico either locally at more affordable prices or may be imported from the United States if not available in Mexico. Larger items such as furniture and decorating items will be an occasional purchase rather than an ongoing supply need reducing supply chain risks.Physical and Environmental Challenges The resort will be located on the beach so weather will be a factor. The resort will be all inclusive and must provide enough activities at the resort to provide guests with a relaxing and pleasurable vacation experience even if the weather deters visitors from beach activities Sales will be seasonal due to the changes in the weather. Prices will need to be adjusted to accommodate these types of environmental and physical changes.The hotel will follow American environmental standards to promote a "green" philosophy. This will protect Mexico's resourced and send the politically a correct message to the resort's guests from other countries.Social and Cultural Risks Guests visiting foreign countries want to experience the culture and have an opportunity to try something new and exciting. Mexican and American cultures will be combined to provide the guests w...
