Globalization and International Strategy
3rd March 2014,
Strategic Marketing Manager,
Apple Telecommunication equipments Limited,
637 Springfield Ave,
Maplewood NJ 07040,
The Chief Executive Officer,
Apple Telecommunications Equipment Limited
637 Springfield Ave,
Maplewood NJ 07040,
Following the main agenda in our last meeting and your request for the identification of a country for the global expansion of our telecommunication equipment company, I have chosen South Africa. This is after comprehensive research and great consideration. The considerable expansion in South African trade, especially in the last decade is viewed as a new exciting occurrence with several developing countries among the key trading partners. Trade and investment between the U.S and South Africa have been developing, owing to the reach and influence that these two nations enjoy in their respective continents (Subramanian, Serge, Alleyne, 2001).
South Africa experiences rapid economic expansion, improved trade facilitation and transport infrastructure, enhanced regional integration, inter and intra firm, inter and intra-industry networks and transactions. These factors coupled with financial and commercial liberalization program have ensured the popularity of South Africa in the international trading platform. The country has a good trade relationship with the United States and this will be of importance to our investment there (Subramanian et al, 2001).
South Africa is considered to be among the largest investors in the mining industry, electrical power and financial services. It should be noted that the US has been the driving force behind growth of South Africa. Based on their current economy, foreign investment both direct and indirect have significantly ensured the development of the nation and it remains an important aspect in the maintenance of a high rate of economic growth. It provides advanced technology for the industries in South Africa (Baker, Boraine, Krafchik, 1993).
The importance of economic growth has been politicized and also made into an economic issue. Many industries view it as hope for the future and the means of liberating social and political developments. The economy of South Africa is one of the success stories of the nation. It has the highest per capita income and life expectancy. Besides, South Africa is also the main food exporter in the entire continent. It has made numerous efforts towards developing a self-sufficient economy (Baker et al, 1993).
However, the study of the economy of the nations is an exercise of contrast and inequality. For example, it has contemporary cities like Johannesburg and Cape Town, although many parts outside the cities still experience poverty and underdevelopment. Therefore, the economy is a dual economy that is segmented into urban industrial sector and rural subsistence sector (Baker et al, 1993). These factors provide for the opportunities of foreign investment since it will assist in advancing telecommunication in the country as well as raising the people’s living standards, which will eventually impact economic growth.
With regards to the market, free trade agreements with the European Union and its SADC partners have been negotiated with a promise of ensuring a strong influence on the South African international trade. South Africa is portrayed through trade to be relatively capital abundant and a net exporter of capital-intensive goods. The country is well endowed with labor physically (relative to capital) when compared to its high income trading partners. This abundance of physical labor has not been reflected into a lower price of labor (relative to capital) in South Africa and, therefore, not impacted a comparative advantage in the production and export of labor-intensive goods (Baker et al, 1993). This again offers opportunities for our telecommunication equipments.
Having considered all these factors and the ready market that South Africa presents, I am convinced beyond reasonable doubt that it is the ideal country that we can rely on for the global expansion of the market for our telecommunication equipments.
Baker, P,Boraine, A, Krafchik, W.(1993). South Africa and the World Economy In the 1990’s. New Africa Books.
Subramanian, A, Alleyne, T (2001). What Does South Africa’s Pattern of Trade Say about Its Labor Markets? International Monetary Fund.