Quiz Inter

8/12/2019 Quiz Inter

1/13

Quiz # 3: Zara

In Partial Fulfillmentof the Requirements for the Course

International Business

Submitted By:Beltran !i"helan $ristineSamson 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 andsardines2 'urin% the year +)) the 0om-any 1as a--roa0hed by a dele%ation from (r%entina 1ho offeredthem lar%e quantities of beef at 4ery attra0ti4e -ri0es2 (-art from (r%entina they also thou%ht of t1oalternati4e 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 forthem to brea" into the lo0al 0anned 0orned beef mar"et2 =hey ha4e finally de0ided to -ut u- the 0annin% ofbeef at the 0om-any9s old -lant in =a%ui%2 It 1as estimated that ma0hinery and -lant equi-ment 1ould 0ostthem Ph- 3)) ! 1hile other 0i4il 1or"s 1ould 0ost them around Ph- 35 !2 =hese 0i4il 1or"s 1ill befunded out of Retained >arnin%s 1hile the ma0hine and equi-ment 1hi0h 1ould be mostly im-orted 1ouldbe funded by debt2 In order to fund these e?-enses the 0om-any ne%otiated 1ith finan0ial institutions andthey 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--inePesos 0arryin% an interest rate of 258 1hile the loan for the se0ond o-tion 1ould be denominated in >uro1ith an interest rate of 52582 @o1 PCC has to ma"e a de0ision 1hether to a00e-t the first o-tion or these0ond o-tion 1ith the 0onsideration of a0hie4in% lo1er 0ost at the end of the transa0tion2 (side from thatPCC has to qui0"ly 0hoose the best 0ountry on 1hi0h they 0an %et their su--ly of quality beef for their0anned 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


2/13

Problems:,2 (mon% (r%entina (ustralia or India 1hi0h 0ountry 1ould Phili--ine Cannin% Cor-oration 0hoose to %ettheir 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 obe0ti4es2

,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 PCC232 =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 0hosen22 =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 toe?tra0t information that are needed in order to sol4e the -roblems2 !oreo4er the %rou- o-ted to useStren%ths Dea"nesses --ortunities and =hreats .SD=/ analysis2 =hese 1ould hel- in aidin% the %rou- to0ome u- 1ith the -ro-er re0ommendations for PCC 1hile 0arefully analyzin% the interests trends0urren0ies and mar"ets of ea0h 0ountry2 Eoans 1ill be 0al0ulated by usin% a sim-le interest formula ;IPR=n4ironment

=he Fili-ino 0ulture is a mi?ture of !alay S-anish and (meri0an2 It is said that FIli-inosare hi%hly o-timisti0 and hos-itable2 Juman intera0tion and other forms of so0ialization isre%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 ahierar0hi0al system in most of the business or%anizations and so de0ision6ma"in% andinformation dissemination is often slo1 be0ause the hierar0hy must be stri0tly follo1ed2Dhen 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 the1ealth and -o1er are dominant in the mana%ement thus affe0tin% de0ision6ma"in%2Sometimes equal 0om-etition is not seen in the business or%anizations be0ause offa4oritism in those 1ith abundant -o1er2

Curren0y Phili--ine Peso

Interest Rates +)) 6 52)8+)) 6 2))8+),) 6 2))8

+),, 6 25)8+),+ 6 32*58

Inflation Rates +)) 6 2))8+)) 6 2)8+),) 6 32,)8+),, 6 2+)8+),+ 6 +2)8

=rade Ea1s =he 4alue of im-orted -rodu0ts for the Fili-inos are hi%h2 -en tradin% system andunilateral 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

Politi0alCondition Re-ubli0

>0onomi0Condition

>0onomi0 %ro1th is about 58 sin0e +)),2 'urin% the year +))* a 'P %ro1th of *8 1ase?-erien0ed ho1e4er it slo1ly de0lined to 328 in +)) be0ause of the 1orld finan0ial0risis2 =he 'P 0ontinued to dro- until the year +)) 1ith ,2,8 ho1e4er it rose to *278in the year +),)2 Slo1ly durin% the year +),, it dro--ed to 32*8 and it 1as -redi0ted thatthe year +),+ ha4e an a--ro?imate 'P of 2+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


4/13

Kery affordable -ri0es !eats quality 1ill deter or 0han%e due to lon%tra4el time

Stri0ter re%ulations ha4e been im-osed on0om-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 beefbehind (ustralia and Brazil2 =hey are "no1n to ha4e quality beef and an abundan0e of it and %i4en thesituation 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 offo0us 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 arese4eral fa0tors but one maor 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?-ortof beef for ,) days and in0luded an e?-ort ta? after 1hi0h2 (nother 0onsiderable 1ea"ness 1ould be thetra4el time needed to trans-ort the meat from (r%entina to the Phili--ines2 Be0ause of the distan0e thetransa0tion 1ould ta"e lon%er than usual and one 1ould e?-e0t more o00urren0es of delay2 =his 1ould be4ery demoti4atin% as meat need to be in a 0ertain tem-erature and en4ironment for it stay fresh yet the tra4eltime 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"eradi0al a0tions in order to sa4e the -o1er of its 0urren0y2 Jo1e4er e?-orters and interested buyers 1ouldsee this as an o--ortunity2 (s the (r%entine -eso %oes 1ea"er it 0on4ersely %i4es more buyin% -o1er to theforei%n buyer 6 lets say a%ainst the (meri0an dollar2 Be0ause of the 1ea"enin% 0urren0y the (meri0an dollar0an no1 buy more of the (r%entine -rodu0t if all else stay equal 1ith re%ards to the (meri0an dollar2 Jen0esin0e the real -ri0e of the (r%entine beef 1ent do1n then it %i4es more buyin% -o1er to the forei%ners 1hi0h1ould 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 aretradin% 1ith2 =hese %o4ernment -oli0ies 0an hurt your trade and 0an si%nifi0antly redu0e your -rofit or e4endeter 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 anoutbrea" of a 0ertain 0ommuni0able disease2

52,2 ther Fa0tors

'actors Argentina

Eo0ation South (meri0a borders 1ith Boli4ia 3+ "m Brazil ,++ "m Chile 5,5) "mPara%uay,) "m &ru%uay 5* "mG'istan0e bet1een (r%entina to Phili--ines is ,*,52+3"m2

Culture andBusiness>n4ironment

6 S-anishG also Italian erman >n%lish and Fren0h6 (r%entines are on "no1n to be blunt and dire0t and still be able to remain ta0tful anddi-lomati0

6 In business settin%s (r%entines (re relationshi-6dri4en 0ulture so it is im-ortant forthem to build net1or"s and use them2


5/13

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 be0alled u-on to re6-ay it26 (r%entina business stru0ture is more on heirar0hi0al2 'e0isions and ideas are %eneratedat the to- and status is im-ortant for them2

Curren0y (r%entine Peso

Interest Rates +)) 6 ,,25)8+)) 6 2)8+),) 6 2))8+),, 6 2))8+),+ 6 2))8

Inflation Rates +)) 6 *2+)8+)) 6 *2*)8+),) 6 ,)2)8+),, 6 25)8+),+ 6 2)8

=rade Ea1s 6 (r%entina has remo4ed 4irtually all non6tariff barriers to trade in the year ,, andredu0ed its tariff rates2 =he only non6tariff barrier is the tariffHquota system a--li0able tothe auto and auto -arts im-orts26 (r%entina9s %o4ernment has both Free =rade (rea of the (meri0as and !>RCS&R forthe 0om-lementary -ro0essess of the hemis-heri0 inte%ration that are ne0essary not onlyfor %eneratin% trade o--ortunities but also for -romotin% de4elo-ment and stren%thenin%the re%ionLs -osition internationally

Politi0alCondition

Re-ubli0

>0onomi0Condition

6 'P of more than &SM37 billion in +),) (r%entina is one of the fi4e lar%est e0onomiesin South (meri0a2

6(r%entinaLs ma0roe0onomi0 -erforman0e in re0ent years has been stron%2 Conse0uti4eyears of ra-id and -ro6-oor e0onomi0 %ro1th enabled -o4erty and unem-loyment to be0ut to le4els e?-erien0ed -rior to the 0ountryLs 0onsum-tion and in4estment 1hi0hin0reased ,,23 -er0ent and ,25 -er0ent res-e0ti4ely2 ),6+))+ e0onomi0 0risis26>0onomi0 a0ti4ity %re1 by 2 -er0ent durin% the first quarter of +),,2 =his %ro1th hasbeen s-urred by -ri4ate 0o2

52,25 SD= (nalysis for (ustralian Beef Industry


!aor >?-orter Kolatile >n4ironment

Shorter =ra4el =ime >?-ensi4e

>ffi0ient Produ0tion !ethods

'isease free status


(ttainment of %reater effi0ien0ies Climate Chan%e

Prote0tionism

'isease Jazards


6/13

Strengths

(ustralia is se0ond lar%est beef e?-orter in the 1orld ust behind Brazil 1hi0h sho1s ho1 abundant theyare in the resour0e and ho1 effi0ient in handlin% it2 (nother stren%th is that out of all the 0ountries -resentedto 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 methodsfor their beef industry be0ause they tend to ha4e 4olatile 1eather o4er there2 Dhi0h 0on4ersely in0reasestheir -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 theirbeef2

$ea%nesses

(ustralian beef is noted to be e?-ensi4e and as said in the 0ase study the a%ent 0ame by and a%reedthat the sale of the beef 1ould ha4e a hi%her mar" u- as 0om-ared to (r%entina and su0h2 (lthou%h this0ould be seen as a bad thin% the effi0ien0y of their -rodu0tion abundan0e of the resour0e and the lo0ation1ould offset the -ri0e in0rease ho1e4er it remains to be 0ertain as ho1 mu0h this 1ould hel- de0rease themar" u-2

Opport"nities =he attainment of %reater effi0ien0ies 1ould %reatly hel- (ustralia in a number of fa0tors2 =histe0hnolo%i0al ad4an0ement or better methods 1ould hel- them in0rease -rodu0tion quality and lo1er 0ost1hi0h 1ould %enerally offset their hi%h -ri0es2 =his 1ould im-ro4e the -erforman0e of (ustralia and 1ouldma"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%erainfalls to dense hot air2 =hese 0limate 0han%es 1ould 0ertainly affe0t the -rodu0tion of beef these abru-t1eather 0han%es 1ould hinder and redu0ed the out-ut2 If this ha--ens this 0ould be a threat to beefindustry not only 1ould it limit its sale in the %lobal mar"et but also in the domesti0 mar"et2 (nother threat1ould be disease hazards althou%h (ustralia 1as %ranted a disease free status one 0an ne4er "no1 for surethat 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 'istan0ebet1een (ustralia to Phili--ines is +25 "m


6>n%lish is the -rimary lan%ua%e in the 0ountry6 (ustralia has a 4ery e%alitarian 0ulture to a4oid differentations bet1een indi4idualsthey try to a4oid dra1in% too mu0h attention to their a0ademi0 qualifi0ations -ersonala0hie4ements or business su00ess sin0e this may be -er0ei4ed as arro%an0e6 (ustralian also are o-en and dire0t manner es-e0ially in business 1here they arere0e-ti4e to ne1 ideas and en0oura%e li4ely dis0ussion or debate

6 (ustralian establish -ersonal relationshi-s 1ith those you are 0ondu0tin% business 1ith2It is im-ortant to ma"e 0onne0tions 1ith established re-resentati4es 1ho are able to hel-build those relationshi-s26 (ustralian business 0ulture -refers a more 0ollaborati4e a--roa0h to1or" and therefore mana%ers and subordinates ali"e 1ill %i4e their in-ut and0onsider the o-tions before rea0hin% a final de0ision2

Curren0y (ustralian 'ollar

Interest Rates +)) 6 2+58+)) 6 32*58+),) 6 2*58+),, 6 2+58+),+ 6 325)8

Inflation Rates +)) 6 32*)8


7/13

+)) 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 trade26 It has a a4era%e tariff rate of ,2 -er0ent

Politi0al Condition Constitutional monar0hy: demo0rati0 federal6state system and Common Ea1

>0onomi0Condition

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,23 billion26 Its e0onomi0 freedom s0ore is 32, 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 tradefreedom2%o4ernment s-endin% and fis0al -roblem6 (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


ne of the leadin% beef -rodu0in% e?-ortin% nations >?istin% ban on beef im-orts due toreli%ious beliefs of the Indians

Im-orted Indian buffalo meat is 0hea- .0arabeef/ >?-orts from India are banned by almostall Destern >uro-ean 0ountries

(bundan0eHa4ailability of resour0es

!any Buffalo !eat and easier to breed


Re4ision of the >I! -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 ofbeef before Brazil and (ustralia2 =he abundan0e of resour0es and ability to sell it 0hea- has %arnered themeat industry of India 1ith so many 0om-etiti4e le4era%e o4er the other e?-orters2 (lthou%h most beef arenot 0o1 beef but rather 0arabeef they still maintained a hu%e e?-ortation of beef %i4en the abundan0e of1ater 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 massi4eblo12 (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


8/13

be0ause they had to 0ut loose a lu0rati4e o-eration2 (nother -oint of 1ea"ness for India to e?-ort beef inDestern >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 >I! -oli0y 1hi0h tal"s about rules and re%ulations of im-ortin% and e?-ortin% in India this1ould %i4e the meat industry a 4ery lu0rati4e o--ortunity2 Furthermore India9s trade has been throu%houtsouth east asia and the middle east and there has been %ro1in% trends of 0o1 beef in the middle east and thisfurther 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?-orterssu0h as (r%entina or &S is the fa0t that 0arabeef is 0hea-er 0om-ared to beef2 Jo1e4er the 1orld isbe0omin% more and more of a %lobal mar"et 1here somebody from a0ross the 1orld 0an ma"e a sale tosomebody else else1here2 =his 1ould 0onsiderably standardized and lo1er -ri0es as the mar"u- of ea0h0om-any %oes do1n2 If -ri0es 0ontinue to %o do1n the ad4anta%e of the 0arabeef 1ould be slo1ly diminishhen0e 1ould hurt the Indian beef se0tor2

52,2 ther Fa0tors

'actors India

Eo0ation Southern (sia borderin% Ban%ladesh )53 "m Bhutan 7)5 "m Burma ,73 "mChina33) "m @e-al ,7) "m Pa"istan +,+ "mG'istan0e bet1een India to Phili--ines is 73)23"m


6 @orth Part of India is more 0onser4ati4e 1hen it 0omes to business 0om-are to SouthPart of India26Jierar0hy System 1hen it 0omes to business 0ulture be0ause of its roots in Jinduism andCaste System6 Indians deal fa4ourably 1ith those they "no1 and trust6 Jindi is the offi0ial national lan%ua%e of the 0ountry mostly all Indians 0an tal" ands-ea" en%lish fluently too26 @amaste

Curren0y Indian Ru-ee

Interest Rates +)) 6 72))8+)) 6 2+58+),) 6 72+58+),, 6 25)8+),+ 6 2))8

Inflation Rates +)) 6 2*)8+)) 6 ,2*8+),) 6 2*8

+),, 6 *25)8+),+ 6 *2+58

=rade Ea1s In0reasin%ly liberal forei%n in4estment and e?0han%e re%imes industrialde0ontrolredu0tions in tariffs and other trade barriers o-enin% and modernization of thefinan0ial se0tor si%nifi0ant adustments in %o4ernment monetary and fis0al -oli0ies andmore safe%uards for intelle0tual -ro-erty ri%hts2

Politi0alCondition

Federal Re-ubli0 Common Ea1

>0onomi0Condition

6 In +),, Indias e0onomi0 %ro1th has slo1ed to belo1 * -er0ent and the sto0" mar"etsmirrored the 1ea"enin% e0onomi0 0onditions but re0o4ered some1hat in early +),+26 Indias e?-orts 1ere %ro1in% 4ery stron%ly throu%h +),, des-ite the 1orsenin%

e0onomi0 0onditions in >uro-e 1hi0h 0ontinued to be Indias most im-ortant e?-ortmar"et2


9/13

6 IndiaLs forei%n e?0han%e .Fore?/ reser4es in0reased by &SM ,2 billion in the 1ee"ended (-ril +) +),+

.( )"rrencies of *nited States and +"rope as opposed to Philippines, Argentina, A"stralia

and India -*SP0P1A2S1A*1I32 and +*2P0P1A2S1A*1I324

52+2, Curren0ies as of (u%ust +),+

Philippines Argentina A"stralia India

&2S 'ollar ,2*35 25 )2*)5 5523*5,

>uro 5)2,* 525* ,2,+55 72)73,

Sour0e: htt-:HH1112?6rates20om

52+2+ Curren0ies as of +),,


&2S 'ollar 327, 2+5,*+ )2** 5+23755

>uro 5*237*3 52737 ,2+333 7275


52+23 Curren0ies as of +),)


&2S 'ollar 32)* 32*)7 ,2))7) 52)*3)3

>uro 52)5*, 52+555 ,233) 527),75


52+2 Curren0ies as of +))


&2S 'ollar 723+ 32)375 ,2,,),+ 7257*3,

>uro 7*2** 5253, ,27,735 7*2)33


52+25 Curren0ies as of +))


&2S 'ollar *2+5 32+35 ,2,3 25)335,

>uro 72*,, 27++*33 +2),5)5 752,


Based on the 0urren0ies tables from years +)) 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 isde-re0iatin% the e?-orts of -rodu0ts from (ustralia 1ill be 0hea-er2 In the im-ortation -ro0ess the


10/13

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 forthe 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%e0onomi0s20omHinterest6rates6list6by60ountryA0euroTarea

52+ >uro-ean &nion9s Inflation Rate

(667 (668 (6!6 (6!! (6!(

,27)8 )2)8 +2+)8 +2*)8 +2)8

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523 >uro-ean &nion9s >?0han%e Rate .>&R:PJP/

9ear +:change 2ate 9ear +:change 2ate

+)) 725)5 +),5 5*2)+7

+)) 7*2*)7 +),7 572+,

+),) 52)5) +),* 5727*

+),, 5*253* +), 5*2,*

+),+ 5)2,* +), 5*2+*

+),3 52*55 +)+) 5*2,53

+), 52)7 +)+, 5*2,)

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>uro-ean &nion9s interest rates and inflation rates 1ere sho1n in a table in order to understand the trendfrom +))6+),+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 Pesoe?0han%e rates from +),+ u- to +)+,2 (s seen in the table the interest rates a4era%e is at ,8 1hi0h meansthat Phili--ine Cannin% Cor-oration 0an borro1 money usin% the >uro-ean denomination 1ithout mu0h1orry as interest e?-ense 1ill not be hi%h2 In terms of inflation rate the >uro-ean &nion9s -ur0hasin% -o1eris still hi%h be0ause the 0han%e in inflation rate is not that bi% and so if PCC is 0onsiderin% to e?-ort their0anned 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-areto the other 0ountries2 =herefore the trans-ortation 0ost 1ill be minimal2 But the im-ortation 0osts should be0onsidered sin0e tariffs and other barrier to trade in this 0ountry is stri0t and hi%h 1ith the a4era%e tarrifs of

,22 Dhen it 0omes to -rodu0in% enou%h su--y and its -ri0es (ustralia is se0ond to the lar%est e?-orter soha4in% a business 1ith (ustralias 1ill -ut you in a %ood tradin% -osition2


11/13

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 Institutesthat 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--ineCannin% Cor-oration 1ill attem-t to %et their su--ly of beef in (r%entina they must0onsider the 0ost of trans-ortation and stora%e be0ause (r%entina is farther than (ustraliaand India also the -ri0e of the (r%entine Beef is a bit more e?-ensi4e be0ause of the hi%hquality 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 +7million/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+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 thebeef 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 2582Solution: IPR=

IPh- 3)))))))) V )2)5 V IPh- +))))))) =otal (mount after years Ph- 3)))))))) T Ph- +)))))))

Final (ns1er: =herefore the total amount to be -aid after years isPh- 5)))))))2

72+2+ (00e-t loan denominated in >uro 0arryin% and interest rate of 52582, >&R Ph- 5)2,* .as of (u%ust )3 +),+/

Solution: IPR= I.Ph- 3))))))))H5)2,*/ V )2)55 V I572+5 >&R V )2)55 V I+5,723* >&R +5,723* >&R Ph- ,3+)))))) =otal (mount after years Ph- 3)))))))) T Ph- ,3+))))))

Final (ns1er: =herefore the total amount to be -aid after years isPh- 3+ ))))))2

72+23 -+*2O +


12/13

+),7 572+, ,773+),,2*,

+),* 5727* ,75),523

+), 5*2,* ,7+352*7

+), 5*2+* ,7,),327,

+)+) 5*2,53 ,7*+5*,25

&otal Php!5,67!,;68.86

=otal (mount to be -aid 1ith + years %ra0e -eriod 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

Iuro o-tion 0arries a lo1er interest 1hat must ha--en to the PhP:>uroe?0han%e rate in order that the interest rate ad4anta%e 1ould be ne%atedA Oou 0an %i4e either a rate ofin0rease or de0rease a formula to 0om-ute the rate or an absolute 4alue2

So"rces

htt-:HH1112tea0hers0hoi0e20om2auHmathsUlibraryHmoneyHsim-leUinterest2htmhtt-:HH1112meattradene1sdaily20o2u"Hne1sH,+),+HindiaUUUtheUbeefUindustryUinU%oodUsha-reU2as-?


13/13

htt-:HH1112ft20omH0msHsH)Hfdd6b3)56,,e,6a,d6)),feabd0)2html#a?zz++=a'IB7ehtt-:HH1112mon%abay20omHhistoryH-hili--inesH-hili--ines6%eo%ra-hy2htmlhtt-:HH1112%fma%20omH%d-6data60ountry6re-ortsH,6the6-hili--ines6%d-60ountry6re-ort2html#a?zz++dR+SD,htt-:HH1112remburssi2or%H-roe0tsH-hili--inesH0ulture2htmhtt-:HHinfo21orldban"2or%HetoolsH1tiHdo0sHPhili--inesUbrief2-df

htt-:HH1112tradin%e0onomi0s20omHinterest6rates6list6by60ountryhtt-:HH1112tradin%e0onomi0s20omHinflation6rates6list6by60ountryhtt-:HH1112tradin%e0onomi0s20omHinterest6rates6list6by60ountryA0euroTareahtt-:HH1112tradin%e0onomi0s20omHinflation6rates6list6by60ountryA0euroTareahtt-:HHsd12e0b2euro-a2euHqui0"4ie12doAS>RI>SU$>O,+)2>R2!2PJP2>&R2SP))2(http//sitereso"rces.>orldban%.org/I3IA+

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