Export Analysis with Tecnológico de Monterrey students

In Fall 2020, I took an International Finance course at Trinity University that assigned many interesting experiential projects, and this was one of those projects. For this project, a classmate and I worked (virtually) across the border with students at the Tecnológico de Monterrey (Monterrey Tech University) to analyze a hypothetical situation where we were an exporter seeking to enter a new market.

We decided that our faux-company would be a manufacturer of glasses frames in Mexico, and we researched political, economic, and social factors involved with consumer behavior and trade in many Hispanic and Latin American countries. Then, we used that research to pick 3 desirable markets and performed a currency analysis; this currency analysis consisted of a comparison between Purchasing Power Parity (PPP) and Covered Interest Rate Parity (CIRP.)

Through our qualitative and currency analyses, we came to the somewhat surprising (well, our combined professors were surprised) conclusion about which country was optimal for the expansion of our glasses company: Uruguay was a more compelling market compared to Brazil or Spain. While Spain had a theoretically advantageous currency position--their more expensive currency would make our product relatively cheap for Spanish customers--we found that it would be difficult to sell a high enough volume in the Spanish market.

Contact me at ty@tykrieger.com if you have any questions.

Have a great day!