Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16/e
by Fred R. David, Forest R. David
External Issues
Geopolitical Risk
Despite being a global company and traded on the U.S. Stock Exchange, 46 percent of Gruma’s assets are located in Mexico and 39 percent of sales. Another 45 percent of sales are from the United States. The Mexican peso in 2014 fell to a year-end low a total of 13 percent against the U.S. dollar. Exchange rate instability and devaluation, coupled with inflation and interest rates, are factors facing Gruma in its home market. Inflation in Mexico, for example, was 4.4, 3.8, 3.6, and 4.0 percent from 2010 through 2013, respectively. Crime rates have been higher in Mexico in recent years and several drug cartels operate in the Monterrey area, the home headquarters of Gruma. With 15 facilities in Venezuela, Gruma has ...
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