12:00 pm Late Fall Management

chapter 4

By noonan32

My group chose to lend money to a guy named Esteban that lives in Oxapampa Peru. Esteban lives with his parents. He used to work for them growing citrus and other fruit trees. Esteban now runs a business cutting down trees in the jungle then cuts them up to make crates for fruit. Esteban goes in to the jungle around four a.m. to find tress to cut down. He pays approximately six dollars and fifty cents in American money for the tree then turns around and sells the wood for around eleven fifty.  Esteban needs the loan to buy a table saw. The table saw would increase production and profit.  It is important that Esteban makes creates for fruit since fruit is one of the big exports in Peru. Peru exports many traditional and exotic fruits such as Camu Camu, the fruit with the highest level of vitamin C in the world along with lots of other exotic fruits that I have never even heard about. Some of the traditional fruits include strawberries, pineapple, peaches, and watermelon.

In the management text book chapter four talks about managing in a global world. There is not allot of information on where Esteban sells his fruit crates.  Most of the fruit companies in Peru export their fruit. Peru is not part of any big trade alliance such as the European Union or the North American Free Trade Agreement.  Peru is one of the countries in the Andean Trade Preference Act which the United States set up in 1991 to eliminate tariffs on some products from those countries. Peru is now a part of the free trade agreement in the United States since 2006.  Being part of this trade agreement also means that Peru is also a member of the World Trade Organization. The WTO is the only global organization that deals with the rules and trades among nations, it also helps importers and exporters conduct their business.

Esteban defiantly runs a international business, although he might just deal with local companies buying the crates. Those companies run a multidomestic corporation. One example is the fruit company Dole that was started in the United States (Hawaii), but has plants all over the world such as Peru. Since Dole is already a global organization, a business that is trying to go global that needs fruit crates at a low cost might do some global sourcing and buy their crates from Esteban for a cheaper price. Global sourcing is a good way to get in the global market besides importing or exporting, licensing or franchising