Peru Case Study
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A SWOT analysis on the Peruvian economy

A SWOT analysis on the Peruvian economy

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Peru Case Study Peru Case Study Presentation Transcript

  • PERU a case study of an emerging economy Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Presentation Agenda Country Overview SWOT Analysis Conclusion Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Country Overview: Basic Peru Facts Climate: Tropical east Desert west Frigid Andes Government: Constitutional Republic Currency: nuevo sol (since 1985) Major industries: Agriculture Mining Tourism Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Country Overview: Case Question Country credit rating*: United States: 94.1 China: 75.9 Peru: 58.2 What factors affect the strength and the stability of the Peruvian economy? *Credit Rating by Institutional Investor http://www.iimagazinerankings.com. Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Strengths Natural resources: oil, natural gas, minerals etc. Major industries: mining and agriculture Cultural heritage and tourism Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Strengths: Mining No.1 industry in Peru Largest producer of metals in Latin America Provides jobs (e.g. Yanacocha) Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Strengths: Agriculture No.2 industry in Peru Fertile land and weather Different plants: variety of potatoes Lama / Alpaca textiles Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Strengths: Cultural Heritage and Tourism Historical sites: Machu Picchu, Cusco, Sacsayhuaman Local culture: clothes, music, art crafts Food culture: exotic dishes, Inca Kola, Pisco Sour Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Weaknesses Natural resources-dependent economy Mining exports are subject to volatile commodity prices Agriculture sector is challenged by low productivity and highly- fragmented land ownership Insufficient infrastructure Hesitation in investing in high capital intensive infrastructure (e.g. hydroelectric energy) Inadequate transportation infrastructure (e.g. roadways, bridges, flight routes) Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Weaknesses High poverty and unemployment rates Pose risk for economic and political stability Hamper development of human capital Impact investor confidence Low capacity of local governments Conflict between companies and government as to who bares social responsibility in local communities Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Opportunities Tourism growth Number of tourists doubled from 2000 to 2005 Net Income of the hotels owned by ACRES has increased over 400% from 2000 to 2007 This trend is expected to continue in the following years The U.S. - Peru Free Trade Agreement in 2006 One of the best stock markets in Latin America Political supports for attracting foreign and domestic investors Peru’s growing economy with low inflation rate attracts investors Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Threat Analysis: Socioeconomic Stability Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Threats - Social Disparity between classes 44.5% of population is poor Most effected by mining (extraction) industry Mining Villages, Indigenous Tribes, Remote Communities Welfare/Responsibility Income Redistribution: “How can we improve welfare of population through distribution of wealth?” Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • SWOT Analysis: Threats - Economic Trade Disputes: failure to maintain free trade agreement with the U.S. or seek out FDI Policy Failure: Dependence on Developed Countries Slowdown in world economic growth/Domestic GDP (i.e. Asian Financial Crisis) Volatile Commodity Prices Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Conclusion Strengths Opportunities Natural Resources Tourism Growth Cultural Heritage Free Trade Agreements Attractive to Investors Weaknesses Natural resources- Threats dependent economy Socioeconomic Stability Insufficient infrastructure High poverty and unemployment rates Low capacity of local governments Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Questions? Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • Thank You to All Our Advisors Pre-trip Frank Benavides, Trip Advisor: Peru overview Todd Milbourn, Olin Business School: “Estimating the Cost of Capital in Emerging Markets” Lima Alberto Arispe, Project Development Manager, Bolsa de Valores de Lima (Peru stock exchange) Ismael Benavides Ferreyors, Minister of Agriculture Margarita Benavides, Sub-Director, Instituto Del Bien Comun (non-profit on common resource management) Javier Riofrio Orrego, Vice President, Acres Investments (venture capital) Livia Benavides, Senior Social Sectors Specialist, World Bank Victor Grande, Project Operations Officer, IFC Raul Benavides, Vice President, Buenaventura (NYSE: BVN, mining company) Cajamarca Carlos Scerpella, External Affairs, Communications, & Human Rights Senior Specialist, Yanacocha Gold Mine Operators of Yanacocha / Newmont Mining Staff of Koriwasi Center of Technoloigcal Innovation in Jewelry Cuzco & Arequipa Vamos Expeditions Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • The Team Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008
  • About Me Jeannie Chan A Curious Marketeer Exploring the World www.jeanniechan.com www.linkedin.com/in/chanj Twitter: @jeannie_chan Center for Experiential Learning Global Management Studies Symposium 2008 © Jeannie Chan, 2008