BLAIR THORPE CARMEN RIVAS DARA HILL RUSSELL GORDON RYAN FERONS

1. BLAIR THORPE CARMEN RIVAS DARA HILL RUSSELL GORDON RYAN FERONS

2. Peru’s PPP Per Capita GDPIn terms of U.S. Dollars PPP = Purchasing Power Parity. The value of all final goods and services produced within a country in a given year divided by the average population.

3. GDP Growth in Peru

4. GDP Growth Per Capita in USD US Per Capita GDP is $48,100 (as of 2010)

5. Inflation of the Nuevo Sol Percent of Inflation Year

6. Peru interest rates Interest Percentage Lower interest rates make it easier to get money, but also depreciates the currency, and raises inflation.

7. GINI Coefficient The USA is between .45-.49

8. Percent of Unemployment in Peru The US is ay 8.3 %

9. Currency

10. Peru’s overall Economic Freedom

11. Fiscal Freedom of Peru

12. Peru’s Government Spending

13. The Trade Freedom of Peru

14. Peru’s Property Freedom

15. Peru’s freedom From Corruption

16. Economic and Financial Risks • The Country is rated as an A4 country. There is a shaky political system and economic outlook in the long run • Relatively volatile trends in the business world • Lack of reliability in corporate financial information • Lack of infrastructure such as roads and utilities

17. POLITICAL - LEGAL ENVIRONMENT Peru does have a bad ranking on the corruption scale (3.4), but as you can see by the color coding below, it is average for Southern America.

18. Government • Presidential Representative Democratic • President, OllantaHumala • He led a rebellion around 6 years ago • Humala wants to distribute wealth from country’s key natural resources

19. Business • Rank in the world • 41st overall • 24th getting credit • 17th protecting investors • 22nd registering property • The Bad • 111th enforcing contracts • 101st construction permits • 100th resolving insolvency

20. Tariffs • In 2006 • 25% on food • Caused lack of trade • In 2009 • U.S. exports were duty free to Peru on 90% of trade • All tariffs with the U.S. will be phased out soon • Under ATPDEA legislation 99% of Peru’s exports to the U.S. will be duty free

21. Religion & Language • 90% of the country is Roman Catholics • 80% of the country speaks Spanish • 16% speaking Quechua

22. Relationships and Respect • Peru is a group-oriented culture, where the collective group is deemed more important than self • Business is built on personal relationships, which have been established over a long period of time • Business in Peru only proceeds after both parties have good working relationships and feel comfortable with each other • Business relationships in this country exist between people, not necessarily companies • There is great value placed on conducting yourself in every situation with: tact, diplomacy, sincerity, integrity, and sociability

23. Negotiation Tips Do’s Don’t’s Be Aggressive Be Loud Be Pushy Be late for appointments Use their negotiation tactics • Build Relationship • Be Persistent • Move at their pace • Show interest in Culture • Emphasis what you can do for each other • Be honest

24. Hofstede Dimensions PDI-Power Distance IDV-Individualism MAS-Masculinity/Femininity UAI-Uncertainty Avoidance LTO-Long Term Orientation

25. Consumer Culture • Religious practices • It is a democratic republic, where they elect a president and members of congress every five years. 90% of the country is Roman Catholics and 80% of the country speaks Spanish, then 16% speaking Quechua as the other dominating language. • Attitudes toward the U.S. & Shopping behaviors if different from the U.S. • The typical Peruvian consumer has considerably evolved over the last decade. The consumer is more interested in the components of a product before they purchase. If the product does not meet their expectations, they are more inclined to complain today, even if this attitude is still a very marginal phenomenon. They also view American products to be of superior making and are willing to spend top dollar on those items. They are still known to do the bulk of their leather and shoe buying from less expensive surrounding countries.

26. Some large companies but large population of illegitimate small miners • Currently use a mercury amalgam mix in order to separate Gold from ores • Mercury Burned in gold shops and produces high quantities of mercury vapor exposing many to health risks • Solution is to bring alternative process to extracting Gold from ores • Cyanide Leaching fields require a lot of capital up front and large plots of land that smaller miners don’t have capability to build Product # 1 - Cyanide Leaching Fields For mining Gold, not killing

27. Competition • Large corporations use this technique all over the world including U.S. • Opportunity: Normally they use it for their own mining purposes. • Threat: it would be easy for a large company to open operations for small miners.

28. Some large companies but large population of illegitimate small miners • Currently use a mercury amalgam mix in order to separate Gold from ores • Mercury Burned in gold shops and produces high quantities of mercury vapor exposing many to health risks • Solution is to bring alternative process to extracting Gold from ores • Cyanide Leaching fields require a lot of capital up front and large plots of land that smaller miners don’t have capability to build Product # 2 -BioFuel Producing Algea Mining large industry in Peru

29. Lots of biofuel companies in the world • Threat: A highly innovative technology, requires constant new developments • Opportunity: can license technology from Joule Unlimited • Renewable energy technology is not being used in developing countries Competition

30. Product #3: Mobil Phone Equipment

31. Market • Peruvian population had shown an increasing interest in the use of cell phones. • The market for it has been growing over time with an amazing speed. “The cell phone market during 2006 exceeded the growth rates in recent years, which had a direct impact in increased coverage nationwide,” says the author, “Since 1998 the market showed further growth as the year 2006, an increase of 68.99%.” • There are 3 companies that sell mobile service; TelefonicaMovistar, Claro, and Nextel del Peru.

32. Logistics • Equipment sold is not the latest technology, even though people are willing to pay in order to get it • Rural populations are increasingly using cell phones (from 1.1 in 2001 to 29.4 in 2008) • Peruvians love Americans and products imported from there as well • Direct competitors are small import companies listed in MercadoLibre.com (Craigslist or Amazon model)

33. Our plan: Get advantage of their high prices and/or narrow selection to offer quality equipment at reasonable prices. Also, work with cell phone companies to sell their services as third party, similar to Best Buy • Plan to serve two segments of the market; the high end that is attracted by exclusive last generation cell phone equipment, and the middle class with affordable second generation cell phones. • Their advantage: Well established in the Peruvian market and dominate the cell phone service segment; therefore, loyalty • Also, they have offices all around the country. • Vulnerabilities: Lack of first generation technology equipment at a reasonable price like in the US, and narrow selection of products.