This study has been undertaken to investigate a suitable country for the expansion of the Australian organization in Latin America. It is analysed that Colombia is having regulated stock exchanges and other financial market in comparison to Argentina and thus this will increase the competiveness of the country. The stability in the environment of macroeconomic shows the competitiveness of the country and it is said that if there is no stability in the macroeconomics than this will make various harm to the country’s economy. In this particular study analysis on economic development path of Argentina and Colombia and Overall competitive position of Argentina and Colombia has been carried out. Colombia has the highest ranking in the terms of pillar of labor market efficiency when a comparison is made to Argentina. This will increase the effectiveness in the employees and thus lead towards attainment of more competiveness and thus lead towards more profit generation for the organization. By, making an analysis on overall competitive position of Argentina and Colombia, Colombia is selected. The rank of Colombia in the market of export showed a rank to 12th from 24th in 2011. The exports of the country were also showed a double value of USD in the year 2016 amounted to 2.38 billion as compared to year 2011.
Argentina has shown a gain of two position and thus score 104th rank because of various innovation factors in the country and thus this helps will help the country to make adaptations according to changes which are going to incurred in future in the environment regarding changes in technologies, taste and preference. The country is showing improvement in the quality of the institutions by protection of the intellectual things and a proper legal framework has been introduced by the country in regard to no infringements. The country also shows a quality in the education system and which is a good sign of effectiveness in the markets. The country has various reforms practices regarding tariffs and the low prices of commodity which shows a growth for the country in terms of economic development. In the Latin America, the major challenge is to trap the middle income group and only Argentina is the country which has overcome this challenge.
Colombia shows a rise in its rank in a continuous way for the second year and thus a rise of five ranks and thus scores a rank 61. This shows the financially development market of the country. The performance of the country is stable over the years and also shown various sign of improvements when comparison is made to the previous year. The country has developed sophistication in the business activities and also in the health and education system. The country has a good results in macroeconomic. There is a tremendous improvement in the quality system, of the education in the country and thus this shows diversity in the economy. There are different other areas where the country has shown improvements and they are public institutions and security. The quality of transport has also increased and thus this shows the economic development of the country (Claessens and Van Horen, 2012).
The institutional environment of Argentina is very effective and efficient and also the legal framework introduction in the country helps in making determining the quality of the industries in the country and thus this shows the strong competitiveness in the country. It can be analyzed that the healthy employees and workforce plays a very important role in increasing the competitiveness of the country. In addition to the health, Education also plays a very important role in increasing competitiveness as it will increase the efficiency of employees. Argentina has showed a quality improvement in the education and health system which will lead towards increase in the competitiveness of the country. It can also be analyzed that the technological adaptation plays a very important role in increasing the productivity of the industries and also innovation leads towards competitiveness (Ronconi, 2012). Argentina is making various adaptations according to changes which are going to incur in future in the environment regarding changes in technologies, taste and preference.
It can be analyzed that the effectiveness in financial sector leads towards proper allocation of the resources to the population of the country and also lead towards more rate of returns for the entrepreneurs. Colombia is having regulated stock exchanges and other financial market and thus this will increase the competiveness of the country. The stability in the environment of macroeconomic shows the competitiveness of the country and it is said that if there is no stability in the macroeconomics than this will make various harm to the country’s economy. Colombia has a good results in macroeconomic. The market size of the country is also large and this will lead towards attainment of economies of scale and by including both the domestic and international market, Colombia is increasing its competitiveness (Brust, and Liston-Heyes, 2010).
It can be analyzed that Colombia is a proper choice on the basis of the differentiation between Colombia and Argentina regarding competitive position. Colombia has sounder institutional environment which will lead towards more sound legal framework in the country ensuring more competitiveness and growth. It can also be analyzed that the sound institutions always lead towards the development in the terms of the sustainable development in the country. This will also ensure transparency in the accounting standards and thus fraud and mismanagement can be prevented. Colombia has also showed stability in the macroeconomic environment and has the highest rank in the pillar of macroeconomic environment when a comparison is made to Argentina and thus Colombia will lead towards more productivity of the country (Bustos, 2011).
Colombia has the highest ranking in the terms of pillar of labor market efficiency when a comparison is made to Argentina. This will increase the effectiveness in the employees and thus lead towards attainment of more competiveness and thus lead towards more profit generation. Business sophistication includes two things that are the quality of the business network of the nation and the quality of the firms who are privately owned and this will lead towards more innovation as Colombia has higher business sophistication (Salvatore, 2010). Columbia has the high rank in terms of pillar of business sophistication is comparison to Argentina.
The 12 pillars of competitiveness are the relevant rules in order to make the evaluation of the competitive advantage of the countries Argentina and Colombia. The competitiveness can be defined as frame of institution, rules and the factors which help in determining the extent of the production of the nation. The level of the production of the nation will help in identification of the prosperity of the nation and this also helps in determining the return rate that can be attained by making an investment in the nation (Cassiman et. al., 2010).
The model of competitiveness consists of various factors like fixed and dynamic. It can be analyzed that the competitiveness of the nation helps in determining the level of income. The competitiveness also determines the potential of growth in the country.
Domestic market size
Colombia is considered as the fourth in the economy of Latin America and also has the third highest population. The country has showed improvements in its security systems and also showed an economic growth. Colombia has showed an increase in the investment and the other commercial tie ups at the international level. A continue growth can be seen to Colombia and majorly in the agriculture items. The rank of the country in the market of export showed a rank to 12th from 24th in 2011. The exports of the country were also showed a double value of USD in the year 2016 amounted to 2.38 billion as compared to year 2011 (Borland, 2016). This shows the competitive advantage of the country in the domestic market size and also with growth in economy.
Capacity for innovation
There are various innovation factors in Colombia and thus this helps will help the country to make adaptations according to changes which are going to incurred in future in the environment regarding changes in technologies, taste and preference and this leads towards competitive advantage. The country has scored 79th rank in capacity for innovation (Schwab, 2016).
Local availability of specialized training services
Colombia has scored 80th rank in Local availability of specialized training services and 98th rank in staff training which shows the competitive advantage of the country. If the country will have specialized training services than the productivity can be increased by effective and efficient utilization of resources present in the country (Brux, 2015).
Business costs of terrorism
Colombia has scored 133th rank in Business costs of terrorism and 127th rank in Business costs of crime and violence which shows that there is quite less risk for the organizations in order to start the business in the country. Colombia has scored 132th rank in Organized crime.
The country which has been selected for expansion In Latin American country is Colombia:-
The wide-ranging and competent infrastructure is vital for ensure the successful implementation of the nation, as it is a vital feature in formative the position of trade and industry activity that are developing in the nation. Strong transportation reduces the outcome of remoteness between regions and thus integration can be done with the international markets and this leads towards attainment of competitive advantages for the countries. . Colombia is having the highest rank in the pillar of infrastructure as compared to Argentina. Colombia has been chosen because of its competitive advantage in innovations, easy availability of specialized services in training and also in business costs of terrorism.
The countries which are having effective markets for the goods are termed as the well established in order to production of products and different services in according to supply and demand situations prevailing in the country. Healthy competition in the country in the both foreign and domestic way is quite important in order to increase the productivity. This will lead towards attainment of the competitive advantage, as it will force the countries to get more innovation and the approaches which are more customers oriented. Colombia is having the highest rank in the pillar of goods market efficiency as compared to Argentina (Komlos, 2014).
Conclusion
From the above study it can be determined that The countries which are having effective markets for the goods are termed as the well established in order to production of products and different services in according to supply and demand situations prevailing in the country are having more competitive advantage. It can be analyzed from the above study that Colombia is having the highest rank in the pillar of infrastructure as compared to Argentina. Colombia has been chosen because of its competitive advantage in innovations, easy availability of specialized services in training and also in business costs of terrorism. It can also be stated from the above study that Colombia has scored 80th rank in Local availability of specialized training services and 98th rank in staff training which shows the competitive advantage of the country. If the country will have specialized training services than the productivity can be increased by effective and efficient utilization of resources present in the country. Therefore it can be concluded that Colombia will be a better choice for the expansion of operations by Australian organization.
References:
Salvatore, D. (2010) Globalisation, international competitiveness and growth: advanced and emerging markets, large and small countries. Journal of International Commerce, Economics and Policy, 1(01), pp.21-32.
Brust, D.A.V. and Liston-Heyes, C. (2010) Environmental management intentions: An empirical investigation of Argentina’s polluting firms. Journal of Environmental Management, 91(5), pp.1111-1122.
Claessens, S. and Van Horen, N. (2012) Being a foreigner among domestic banks: Asset or liability?. Journal of Banking & Finance, 36(5), pp.1276-1290.
Ronconi, L. (2012) Globalization, domestic institutions, and enforcement of labor law: Evidence from Latin America. Industrial Relations: A Journal of Economy and Society, 51(1), pp.89-105.
Schwab, K. (2016) The global competitiveness report 2016-2017, ed. In WE Forum.
Bustos, P. (2011) Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms. American Economic Review 101 (1),pp 304–40.
Cassiman, B., Golovko, E. and Martínez-Ros, E. (2010) Innovation, exports and productivity. International Journal of Industrial Organization, 28(4), pp.372-376.
Borland, J. (2016) Microeconomics. USA: Cengage Learning Australia.
Brux, J.M. (2015) Economic issues and policy. USA: Cengage Learning.
Komlos, J. (2014) What every economics student needs to know and doesn’t get in the usual principles text. New York: ME Sharpe.
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