Philippine Canning Corporation Case
I. Issues that Azucena Inalis must take into consideration.
There seems to be two major issues that PCC must tackle in its ‘corned beef venture’; 1) where should PCC get its raw materials? (beef) and 2) Where does PCC source its debt?
When it comes to the outsourcing of beef, PCC is considering Argentina, Australia, and/ or India. There are a number of concerns that must be addressed when it comes to importing raw materials from any one of these countries:
1) Political and Legal Considerations
2) Economic Performance and Management
3) Government Protectionist Policies
The matter of sourcing debt is relatively simple because there are only two options being deliberated; 1) Denomination in Philippine Pesos, or 2) denomination in US Dollars.
II. Evaluating the Issues
1) Political and Legal Considerations
Argentina is widely considered to be one of the most corrupt countries in the world. Argentina scored 35/100 on the Transparency International rating as of 2011. 0/100 would be extremely corrupt while 100/100 would be clean. Crime rates as well as poverty are known issues. There is high risk as far as the political considerations in Argentina are concerned.
India scored 36/100 on the Transparency International rating as of 2011. 0/100 would be extremely corrupt while 100/100 would be clean.
Australia is would be considered in a low risk bracket, there is a strong legal system in operation and there is high confidence in government Australia scored 85/100 and they are well recognized for their efforts to stymy and eventually eradicate corruption and poverty altogether.
2) Economic Performance and Management
Taken from Teadingeconomics.com(2013) | Instituto Nacional de Stadista ^
The latest reported inflation rate for Argentina is 10.5% for this month. It has been steadily decreasing from a high of 11.1% in early February (Instituto Nacional de Estadista, 2013) but it has been forecasted to increase to 10.8% by mid-October.
There seems to be two major issues that PCC must tackle in its ‘corned beef venture’; 1) where should PCC get its raw materials? (beef) and 2) Where does PCC source its debt?
When it comes to the outsourcing of beef, PCC is considering Argentina, Australia, and/ or India. There are a number of concerns that must be addressed when it comes to importing raw materials from any one of these countries:
1) Political and Legal Considerations
2) Economic Performance and Management
3) Government Protectionist Policies
The matter of sourcing debt is relatively simple because there are only two options being deliberated; 1) Denomination in Philippine Pesos, or 2) denomination in US Dollars.
II. Evaluating the Issues
1) Political and Legal Considerations
Argentina is widely considered to be one of the most corrupt countries in the world. Argentina scored 35/100 on the Transparency International rating as of 2011. 0/100 would be extremely corrupt while 100/100 would be clean. Crime rates as well as poverty are known issues. There is high risk as far as the political considerations in Argentina are concerned.
India scored 36/100 on the Transparency International rating as of 2011. 0/100 would be extremely corrupt while 100/100 would be clean.
Australia is would be considered in a low risk bracket, there is a strong legal system in operation and there is high confidence in government Australia scored 85/100 and they are well recognized for their efforts to stymy and eventually eradicate corruption and poverty altogether.
2) Economic Performance and Management
Taken from Teadingeconomics.com(2013) | Instituto Nacional de Stadista ^
The latest reported inflation rate for Argentina is 10.5% for this month. It has been steadily decreasing from a high of 11.1% in early February (Instituto Nacional de Estadista, 2013) but it has been forecasted to increase to 10.8% by mid-October.
References: Transparency International (2013) The Global Coalition Against Corruption; Corruption by Country/ Territory. Retrieved from: http://www.transparency.org/country#ARG_DataResearch Trading Economics (2013) Inflation Rates. Retrieved from : http://www.tradingeconomics.com/argentina/inflation-cpi