Exporting into Argentina

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Outlines the barriers to enter the Argentine market with an iPod.

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  • Exporting into Argentina

    1. 1. Exporting the iPod into Argentina Corina Wentzel
    2. 2. Executive Summary <ul><li>Why Argentina </li></ul><ul><li>IT industry increased 19% from 2005 to 2006 </li></ul><ul><li>Over 40 million citizens </li></ul><ul><li>Median age less than 30 </li></ul><ul><li>GDP growth of 9% annually </li></ul><ul><li>Why the iPod? </li></ul><ul><li>High global demand </li></ul><ul><li>Successful in Mexico </li></ul><ul><li>International revenue grew 17% in 2007 </li></ul><ul><li>Unique </li></ul>
    3. 3. Obstacles and Opportunities <ul><li>High Tariffs </li></ul><ul><ul><li>10-20% tariff </li></ul></ul><ul><ul><li>37-47% tax and tariff </li></ul></ul><ul><li>Product Adaptations </li></ul><ul><ul><li>Language, 220 volt </li></ul></ul><ul><li>Double Taxation </li></ul><ul><ul><li>No tax treaty </li></ul></ul><ul><li>Few Non-Tariff Barriers </li></ul><ul><ul><li>No quotas or licenses </li></ul></ul><ul><li>Financing </li></ul><ul><ul><li>2 nd largest trading partner </li></ul></ul><ul><li>Significant Growth Potential </li></ul><ul><ul><li>1/3 live in or around Buenos Aires </li></ul></ul>
    4. 4. Alternative Methods *Subsidiary* Foreign Distributor Contracting Agent Pros <ul><li>Guaranteed control </li></ul><ul><li>Confidential information is protected </li></ul><ul><li>Required by law </li></ul><ul><li>Responsible for collecting payment </li></ul><ul><li>Provide after purchase support </li></ul><ul><li>Some home country management </li></ul><ul><li>Know the market </li></ul><ul><li>Complete control </li></ul><ul><li>Know the market </li></ul><ul><li>Easy to revoke </li></ul>Cons <ul><li>Governed by local laws </li></ul><ul><li>Open to double taxation </li></ul><ul><li>Unable to test the market </li></ul><ul><li>Lack of control </li></ul><ul><li>Often own competitors products </li></ul><ul><li>Care about the sale, not the product </li></ul><ul><li>Lack of control </li></ul><ul><li>Disclosure of confidential information </li></ul><ul><li>Agent assumes no risk </li></ul><ul><li>Not responsible for arranging payment </li></ul><ul><li>Only care about the sale </li></ul>
    5. 5. Key Elements
    6. 6. Legal Aspects <ul><li>Treated like citizens </li></ul><ul><ul><li>Access to financing </li></ul></ul><ul><ul><li>Welcome to take profits </li></ul></ul><ul><li>Must have subsidiary or branch </li></ul>
    7. 7. Financing <ul><li>U.S. Loans </li></ul><ul><li>Small Business Administration </li></ul><ul><ul><li>Short term loans </li></ul></ul><ul><li>International Finance Corporation </li></ul><ul><ul><li>Developing countries </li></ul></ul><ul><li>Export-Import Bank </li></ul><ul><ul><li>Guarantees loans </li></ul></ul><ul><li>Citibank </li></ul><ul><ul><li>Only U.S. bank in Argentina retail </li></ul></ul><ul><li>Argentina Loans </li></ul><ul><li>Late 1990’s: 120 Banks </li></ul><ul><li>Today: 67 Banks </li></ul><ul><li>Advanced payment of imports </li></ul>
    8. 8. Questions?

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