The Differences Between Developed Nations and Latin America

The primary difference between developed nations and Latin America will be that of cost and competition. America is characterized by excessive competition, primarily in commodity based businesses. In many instances America practices protectionism in regards to its cocoa and sugar manufacturers. As a result, there are barriers to entry that cause foreign candy manufactures cost to rise substantially. Arcor does not have this problem in its home county as it can seamless and efficiently distribute is product with little addition costs associated with doing so. Furthermore, price competition discourages market participants as margins shrink. Margins for many retailers and manufactures are roughly 20%. However, due in part to extreme competition, those margins is significantly reduced for foreign competitors. Arcor is therefore forced to recoup these losses in the form of higher prices, lower costs, or by simply taking the mark down. Also, the sale to advertising ratio is about 6% for Am erican candy companies. Arcor, I suspect, will undoubtedly occur additional advertising expense due to the unfamiliarity of the product. Companies such as Nestle, DANONE, and Hershey have significant marketing and advertising budgets to maintain their respective market share. In some instances, NestlÃÆ' ©s advertising budget is roughly 34% of Arcors total sales! This present problems as Arcor is competition with larger players for a very small fraction of market share. These costs could easilyShow MoreRelatedU.s. A Multicultural Country1045 Words   |  5 PagesIn terms of diversity, the U.S. contains a lot of history, which makes them what they are now. Both the U.S. as well as Latin America were colonies, achieved independence movements and were directly influenced by countries like Spain and France. 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