Company Expansion In South America Essay

2441 words - 10 pages

TO: Travel Express Management Team
FROM: Andrea Victoria
DATE: November, 5, 2014
SUBJECT: Company Expansion

TRAVEL EXPRESS EXPANDS IN SOUTH AMERICA

Travel Express has reached a growing point this year that was not expected after our county faced such economic difficulties these past few years. Travel Express was established in 2004 in Palm Beach, Florida, offering costumers cheap airfare tickets, along with, hotel, car rental, and discounts on tourist attractions. Now with twenty-four seven telephone assistant to our customers, they can book their vacation at any time. We have been named one of the most competitive price companies within the travel agencies. ...view middle of the document...

This can in the long run lead to repeat visit to Colombia.

Colombia currently has the third largest GPD in South America, with a free market economy. Colombia by so has a 3.7% of inflation rate, making it one of the lowest in South America; compare to Venezuela its neighbor country holding an inflation rate of 25.8%. In South America, Colombia has one of the fastest growing economies: “Colombia’s economy has been growing steadily and faster than the Latin American average, and the nation is quickly becoming one of the world’s leading emerging economies” (“About Colombia,” 2014). In addition, Colombia is friendly towards foreign investments: “According to the World Bank’s Doing Business Report, Colombia is the third most “Business Friendly” country in Latin America and the top reformer in the region” (“About Colombia,” 2014).

The following chart shows Colombia’s GDP growth compared to the rest of the world:

About Colombia. (2014). Embassy of Colombia, Washington D.C. Retrieved from:
http://www.colombiaemb.org/overview

The following chart compares Colombia’s annual inflation rate to the remaining countries in South America:

About Colombia. (2014). Embassy of Colombia, Washington D.C. Retrieved from:
http://www.colombiaemb.org/overview

Even though Colombia has been classified as a dangerous country due to its guerrilla and drug cartel involvement, in the last past years it has taken big steps in transforming and restoring its safety regulation not only to visitors but to its citizens as well. “The introduction of the democratic security and defense policy by former president Alvaro Uribe Velez has proven invaluable in the renewed growth of Colombia’s tourism sector. In fact, international tourism arrivals have grown at an average annual rate of about 10% since 2002” (“Emerging Tourism,” 2012). It still has a long way to go, but most tourist areas are kept safe for visitors. This may seem as a disadvantage to our company because safety is a major factor to travelers.

Panama’s Economy and Government
Panama has a constitutional democracy, with a “civil law system; judicial review of legislative acts in the Supreme Court of Justice” (“Panama: The World,” 2014). Panamas currency is mainly US Dollar as well as Panamanian Balboa, with a GDP of $40.62 billion in 2013; ranking in thirteen in its region (South America, Central America and the Caribbean). Panama has a low unemployment rate of 4.5 %; its labor force mainly consist of services (64.4%), industry (18.6%) and agriculture (17%) (“Panama: The World,” 2014). In addition, Panama is undergoing transformation to improve their economy: “Economic growth will be bolstered by the Panama Canal expansion project that began in 2007” and is estimated to be completed by 2015; a long with new developed metro system in Panama City (“Panama: Forbes,” 2014).

Just like any third world country Panama faces some great disadvantages: First, Panama depends greatly on the demand for...

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