logo image

Strategic Recommendation

NAFTA brought different effects to different parties. For US workers, there are smaller chances to get jobs because some American manufacturers are moving to Mexico to obtain the benefit of cheaper labor price. However, for companies, the agreement brought opportunities in the form of easiness to perform trade activities within the borders of NAFTA. Furthermore, all advantages of the North European market can be harvested without significant bureaucracy.

For instance, as a reaction toward the agreement, American manufacturers could choose to establish their factories in cheaper regions like Mexico (Lederman, 2005). In the case of HJ Heinz, as a corporation, the company could benefit considerably from NAFTA as well it could face significant challenges due to the agreement. For instance, the opportunity comes in the form of opening branches in the Mexican and Canadian region. This way, the company will be less affected by the labor concerns as mentioned above and also the transportation cost from having to move finished products into the Mexican markets.

By establishing a manufacturing facility in Canada or Mexico, Heinz will have also protected itself form foreign currency fluctuations. On the other hand, HJ Heinz could also face significant challenges due to the agreement. For example, competitions

Need essay sample on "Strategic Recommendation"? We will write a custom essay sample specifically for you for only $13.90/page

will certainly be much more intense as competitors are no longer restricted to trade barriers and have a lower cost structure to start with. Taking account of the three operational strategies of the company in 2007-2008, we can conclude that HJ Heinz is helped by the presence of NAFTA.

In its first strategy, which is reducing cost, the company could establish a manufacturing facility in Mexico, who has lower cost structures. The second strategy, which is to promote growth through innovation, has also been –coincidencely- supported by NAFTA. Heinz could market their products into Mexico and Canada with no significant barriers. However, Heinz must also face the challenge of innovating products which are acceptable within the new markets.

The third strategy is of course, supported by the presence of the first and second strategy. By reducing costs and increasing the customer base, Heinz could provide larger returns to investors and attract new investment.

Bibliography

‘After NAFTA’. 2004. American Public Media. Retrieved February 17, 2007 from http://marketplace. publicradio. org/features/nafta/ ‘About Heinz’. 2007. Heinz. Retrieved February 17, 2007 from http://www. heinz. com/About. aspx Chang, Won and L. Alan Winters. 2002.

‘How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR’,. American Economic Review, Volume 92, No. 4 pp. 889-904. Dienstag, Eleanor Foa. 1994. ‘In Good Company:125 Years At The Heinz Table’. Warner Books Greider, William. 1997. ‘One World, Ready or Not’. Penguin Press. Hufbauer GC and Schott, JJ, 2005. ‘NAFTA Revisited’, Institute for International Economics, Washington D. C. ‘HJ Heinz Annual Report 2004’. 2007. Heinz. Retrieved February 17, 2007 from http://www. heinz. com/Annual. aspx

Read full document

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register
Signup & Access Essays

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy