Intel’s Site Selection Decision in Latin America Essay

In a growing technological society, the demand for Intel partnerships products is rising at a rapid pace. Intel must undetermined a new plant at a rate of angiotensin converting enzyme every nine months to supply this demand. In order to diversify assets and descend risk, Intel must give in a new bea. This neighborhood must consist of a stable and transparent governing body, an export-based economy, a well-educated population, a non-union mentality and lower operating be than the United States.Intel aims to invest in Latin America because the area currently does not have whatsoever plants and accommodates all of the necessary criteria. After selecting a continent, Intel was much concerned close availability of skilful personnel and engineers to staff the plant parturiency unions and effort relations transportation infrastructure and costs the availability and reliability of the galvanic power supply and the governments corporate taxation grade and incentives. There fore, the four countries in Latin America that were most appropriate are costa Rica, brazil nut, Chile and Mexico.Costa Rica seemed like a valid alternative. The advantages to invest in Costa Rica include a reputation for stability and popular government, a collaborative government willing to adapt and change laws in a transparent manner, relatively lower wages, rare and non-combative unions, strict remove laws, excellent transportation methods, and tax exemptions. Disadvantages are that the investment could overwhelm the dwarfish economy (pop. 3.5 million) finding enough people with the right training would be difficult there are not enough daily flights from San Joses airport and relatively lofty electricity costs.Brazil seemed even more valid than Costa Rica. The benefits of investing in Brazil include a huge local market (not important due to 100% exports from plant) outstanding(p) populations to hire staff from collaborative state governments reliability (numerous high a pplied science firms already located in Brazil) capable airports adequate infrastructure and ready(prenominal) and reasonably priced electrical power. Drawbacks include security higher overall labor costs government indifferent about concerns non-favorable government policies and a high rate of taxation.Chile really impressed the Intel team upon initial inspection. spend in Chile is beneficial due to the modern infrastructure and technical training programs. However, shortcomings include travel distance for expatriate executives salaries for technically clever personnel are relatively high engineer salaries were similar to those in the United States absurd slap-up controls site proposal far extraneous from airport (Santiago) and no significant government incentives.Mexico has been a great area of foreign direct investment by many high applied science firms. Intel hoped it could join the Mexican Silicon Valley. The advantages to investing in Mexico are reliability (prominent Gu adalajara area) sufficient travel flights and capacity low labor costs large supply of skilled engineers and technicians lowest electrical power costs and release land for plants site and subsidized training for an all-inclusive period. Weaknesses of this site include lack of governmental incentives at the federal condense a high rate of unionization and exceptions would be made creating an atypical environment.Given the advantages and disadvantages of each country, Intel should invest in Costa Rica. Costa Rica should be selected due to its export-oriented infrastructure, reliable power and advanced telecommunications, as well as its talented and educated workforce, highly educated population and supportive business concern environment. If a president of a country is willing to personally take a group of Intel managers on a helicopter tour of Costa Rica, then this demonstrates the governments willingness to collaborate with further details and issues that may arise. Intel was not too big an investor for Costa Rica.The country desired a new competitive market to cater to and Intel provided a solid stepping lapidate in to a newly developed Costa Rican high applied science industry. The vital factor was that for every disadvantage listed by the Intel team, the Costa Rican government had a non-preferential and transparent alternative to each one. The deciding factors for the other countries were Brazil had insecure and unreliable taxation laws that had actually driven some states to the transmit of bankruptcy Although Intel was a direct foreign investor, Chiles capital control methods would prove unstable and questionable if they forced hidden costs on to similar portfolio capital investors Mexicos made a critical mistake of granting exceptions for Intel entailing an uncertain future if there was a change in government.