Country Analysis of Chile, Essay Example

Chile has an extremely diverse geography. Many attributes of this country are beneficial to the country’s trading and economy. Chili is surrounded by two countries: Argentina and Peru. Additionally, Chili has 8,800 feet of coastal range (Maps of World.com, 2009). Santiago, the capital of Chile, is centrally located between the Andes mountain range to the east and the coast to the west (Maps of World.com, 2009). Its location so close to the coast is a key geographical strength in influencing Santiago as the choice for a business “partnership” between Santiago and Victoria Secret. The climate in Santiago is Mediterranean, with mildly cold, rainy winters and hot, dry summers that reach highs of around 82 degrees. This thriving metropolitan has a population of more than six million inhabitants and a vast metro and bus system within the city (Country Profile: Chile, 2009).

Political Stability

The Chilean Republic government was built using the basis of Roman, French, and Spanish judicial systems. The Chilean laws are “implemented for the overall benefit of the country” (Maps of World.com, 2009). Laws are fair and Chileans have freedom to speak their minds and purchase items without consequence of the government. These facts will benefit Victoria Secret’s plan for expansion because the government will not interfere with men or women purchasing the items sold at the store or with the importing and exporting of stock. Current President Michelle Bachelet, the first woman president elected in Chile (Candia, 2006), will complete her first term in 2010. Given the Chilean governments history of “hands off” policy in the marketplace, worries that a new president would create challenges, such as changes to current trade tariffs or the government decreeing Victoria Secret an inappropriate store, are negligible.

Economy

The Chilean economy has been hit hard by the international economic crisis. Inflation has risen to 8.8 percent in 2008 (Banco Central de Chile, 2009), an environment that does not promote consumer confidence. Interest rates have dropped sharply, from 7.25 percent in January 2009 down to .50 percent by November 2009 (Banco Central de Chile, 2009), making business loans a good prospect. The value of the Chilean Peso needs consideration. Currently the ratio of the United States dollar is 1US to 0.001994 Peso (Banco Central de Chile, 2009). Unemployment rates have begun to lower in current months, but still remain high. In September 2009, unemployment in Santiago, Chile was reported to be 10.7% (Zarchy, 2009). This would make welcome the employment opportunities a new Victoria Secret store would offer the community.

Culture

The country of Chile has a well-defined culture. Santiago, is considered not only a geographical capital, but a cultural capital as well. Within the culture, social gender roles are strongly defined. In a study conducted amongst Chilean men and women, 43% surveyed agreed that “it is better for women to concentrate on the home and men on their jobs,” (Lewis). This may be an issue Victoria Secret will have to face when attempting to fill positions at their store. Victoria Secret hires women because it provides a comfort level to other women when measuring for bra and panty sizes. Men may make customers uncomfortable when they are shopping for personal items that they may only share with a spouse or significant other.

Santiago provides an excellent geographical location for the marketing of Victoria Secret items, especially swimwear. The economic climate, though hit by the international crisis, is rebounding and employment opportunities are needed. Politically, the country shows a history of stability. Though an at-home role is generally preferred for women in Chilean culture, this would be a natural niche market for those women who do choose to work outside the home. Given these factors, Santiago, Chile would prove a reasonable choice of location for a Victoria Secret expansion.

References

“Stimulating; Chile’s economy (Chile’s counter-cyclical economic policy). (2009, February 21). The Economist (US). (2009). Retrieved November 20, 2009, from Maps of World.com: http://www.mapsofworld.com/chile/government/law.html

Banco Central de Chile. (2009). Retrieved November 20, 2009, from http://www.bcentral.cl/eng/press/communications/index.htm

Candia, R. (2006, January 16). Chile elects first woman president . Retrieved November 22, 2009, from MSNBC: http://www.msnbc.msn.com/id/10819903/

Country Profile: Chile. (2009). Retrieved November 20, 2009, from World News Digest: World News Digest Database

Lewis, J. J. (n.d.). Retrieved November 20, 2009, from About.com: http://womenshistory.about.com/library/ency/blwh_chile_gender_family.htm

Zarchy, D. (2009, October 31). Housing sales up 13 percent in greater Santiago area. Retrieved November 22, 2009, from Associated Content: http://www.associatedcontent.com/article/2340336/housing_sales_up_13_percent_in_greater.html