Rica Cheesecake & Coffee Company

Executive Summary: Rica Cheesecake & Coffee Company

Imagine sitting at a trendy and relaxing cafй in the middle of a dynamic and energetic town square, in Latin America, enjoying a cup of fine coffee with a slice of delicious American style cheesecake. You have just entered the world of Rica Cheesecake and Coffee Company.

Our team was tasked with developing a concept or service in a foreign country and delivering a research project. The key to this project was selecting the country and a product that would have the greatest chance of success.

We focused on the Central American region of the world. We evaluated the seven countries that comprise Central America and chose one country with the most potential to deliver our product. The countries that were evaluated were; Guatemala, Belize, El Salvador, Honduras, Nicaragua, Panama and Costa Rica. As you can gather from our name of our concept, we have selected Costa Rica.

Each country was evaluated by the geographic, cultural, political, infrastructure, economic and overall risk to determine the optimum country. The countries in Central America had similar characteristics, from their religious beliefs to their "Metizo" population. They also depend on agriculture and tourism for their economies. Central America is plagued with political corruption, economic challenges and a continued drug trafficking problem.

One thing that these countries do have is the abundance of natural resources, fertile land, water and wonderful weather. This is what drives thousands of tourists to this part of the world. We found that a large number of U.S. citizens vacation in Central America, especially in Costa Rica, in fact, they like it so much, they retire there.

We have developed our concept with these and may other demographics in mind. In an effort to attract customers and create a competitive advantage, we will commit ourselves to a differentiated product/service strategy and will differentiate ourselves based on customer service, product quality and product uniqueness.

Our start-up strategy is to establish a joint venture with the well regarded coffee company, Aventura Ltd. This will help reduce our initial capital investment and help minimize risks associated with Greenfield operations. By establishing a joint venture we are able to recognize synergistic transfers of product knowledge, this adds more value to our company and our product which ultimately can be passed on to our consumers.

Now it is time to imagine the "American" style cheesecake, with a touch of local flavor in coffee. So sit back and relax and enjoy the experience.

Introduction

The following portion of our paper will detail the Central American countries of Guatemala, Belize, El Salvador, Honduras, Nicaragua, Panama, and Costa Rica that we have researched. It will provide insight in the following areas: Geographic, Social, Economic, Political, as well as the Infrastructure of these countries. This analysis will help illustrate our decision in terms of the country we have selected and the product and service we have chosen. Also, the following segment will provide illustrative tools that we have employed to derive the best location and best possible product.

Country Analysis: Central America

Guatemala, Belize, El Salvador, Honduras, Nicaragua, Panama, and

Costa Rica

Guatemala

Geographic:

Guatemala is located in Central America, below Mexico. It borders El Salvador and Honduras to the east, Mexico to the north and west, and Belize to the Northeast. The Pacific Ocean is south of Guatemala.

Social:

The population of Honduras is 14,280,596 million (2004 est.) with an annual growth rate of 2.61% (2004 est.). Ethnic groups are divided as follows: approximately 55% Mestizo, 43% Amerindian and 2% whites and others.

The official language is Spanish (60%), although there are 23 existing vernacular languages (40%) comprising the cultural patrimony. The most important are: Quichй, Kakchiquel, Quekchн and Mam. Guatemalans are classified as highly religious. Roman Catholicism is the primary religion. Small sub sectors include Protestantism as well as indigenous Mayan beliefs.

The literacy rate of the population is approximately 70.6%. The Guatemalan government provides free education which has helped increase the literacy rate considerably in the last 10 years.

Political:

Republic of Guatemala is the official name of Guatemala. The capital is Guatemala which is largest city in the country. The government is a Constitutional democratic republic and the current president is Oscar Berger. There are three principal branches Executive Branch: president, vice president, Council of Ministers (cabinet); Legislative Branch: unicameral National Congress (Congreso Nacional) and Judicial Branch: Supreme Court of Justice (Corte Suprema de Justicia).

Corruption is one of the most prevalent problems in Guatemala. Since January 2004, a new government has taken power since then many cases of corruption as a result of the prior government have been discovered. This has caused a growth in tax fraud by many private companies. As a result, the government has fewer resources to spend on public institutions such as the educational system.

Guatemala has a civil law political system which politicians have continuously manipulated. As a result, the U.S. government decertified Guatemala on counter narcotics cooperation in January 2003. According to the U.S. Department of State, about 40 percent of the cocaine that arrives in the United States each year passes through Guatemala. The country is suffering one of its worst political crises since democratic reforms took hold nearly 20 years ago

Economic:

Guatemala's GDP for the year 2003 was $56.53 billion. Guatemala is classified with a C economic risk rating. The GDP real growth rate is 2.1% (2003 EST.). Its economy is based on agriculture, which accounts for 25% of GDP, employs about 60% of the labor force, and supplies two-thirds of exports. Coffee, sugar, and bananas are the main exports at $2.763 billion annually (2003). The cost of total imports is estimated at $5.749 billion. The main imports are fuels, machinery, transport equipment, construction materials, grain, fertilizers, and electricity; these constitute the largest portion of