MT220 Unit 2 Country Profile Example

Why Colombia and Not Peru or Chile: A Unit 2 Country Profile for a Tacoma Roaster Maker

[Student Name]

Purdue University Global

MT220: Global Business

Unit 2 Country Profile

[Instructor Name]

[Date]

Cascade Drum Works and its buyers are composite and illustrative; country figures are approximate and bracketed where they change often or should be refreshed from the sources on the day of writing; the sources cited are real.

The Screen

Three markets were screened on four indicators that matter to a roaster maker. The first is coffee grown and roasted at home, since farms that roast their own beans are the most likely buyers. The second is the number of specialty cafes in the largest cities, a second group of buyers. The third is trade agreement status with the United States, which affects duties. The fourth is shipping distance from the Pacific Northwest.

Colombia leads clearly on the first two. It is one of the world's largest producers of washed arabica, with annual output of [about 12 million] sixty-kilo bags, and a growing number of farms now roast and sell part of their own harvest. Peru grows a great deal of coffee but has fewer farms roasting their own, and Chile grows almost none. On specialty cafes, Bogota and Medellin each have far more than Lima or Santiago in the sources consulted. All three countries have trade agreements with the United States, and all three can be reached by sea from the West Coast, so the last two indicators tie.

Ghemawat (2001) argued that firms underestimate the distance between markets by looking only at geography and income, when cultural, administrative and economic differences matter as much. The screen above is mostly economic; the cultural and administrative differences come in Units 3 and 4.

Fact Card

The figures below are the ones a seller would check before a first visit. Population is about [52 million], and income per person is about [$7,000] a year, according to World Bank (2024) data, far below the US level, which matters because a [$41,000] roaster is a large purchase for a farm. The peso trades at about [4,100] to the dollar on the day of writing and has moved by more than a tenth within a single year more than once in the past decade. Colombia's main Pacific port, Buenaventura, is the natural entry point for cargo from Tacoma, and the coffee region sits several hours' drive inland over the Andes. The country's domestic coffee consumption is about [2 million] bags a year and has risen as specialty cafes spread.

Who Would Buy

Two groups would buy a machine of this size. The first is coffee farms and small cooperatives in the departments of Caldas, Risaralda and Quindio, the coffee axis, that want to roast part of their harvest for direct sale in Colombian cities or abroad. Roasting their own beans lets them sell at several times the price of green coffee. The second is specialty cafes and small roasting businesses in Bogota and Medellin that have outgrown smaller machines.

The first group is larger and closer to the firm's existing inquiries. Most of the [40] emails received in the past year came from farms in the coffee axis, some with a few dozen hectares and some organized as family businesses with a brand of their own.

Economic Conditions That Matter

Three economic facts bear directly on the sale. Farm incomes rise and fall with world coffee prices and the peso, so a grower's ability to buy a roaster depends on the year's harvest price. Credit for equipment is available through Colombian banks and a national agricultural development fund, though interest rates have been well above US levels in recent years. And most growers sell in pesos, so a machine priced in dollars becomes more expensive whenever the peso weakens, a risk Unit 6 will measure.

Competition Already in the Market

Cascade would not be the first roaster maker to sell in Colombia. European manufacturers, especially German and Italian brands, are well known among specialty roasters in Bogota and Medellin and have local agents. Turkish manufacturers sell machines of a similar size at lower prices. Several Colombian fabricators in Medellin and the coffee axis build simpler roasters for farms at a fraction of the price, with local service but less precise controls. Each type of competitor sets a reference point for the buyer. A grower comparing Cascade's machine with a locally built roaster will ask why it costs three or four times as much, and the answer must be about roast consistency, fuel efficiency and service, not about the machine being American.

Political and Legal Conditions

Colombia is a democracy with an independent central bank and courts, and it has been a stable trading partner of the United States for decades. Its peace agreement with the largest guerrilla group in 2016 reduced violence in many rural areas, including much of the coffee region, though security still varies by area. The United States-Colombia Trade Promotion Agreement, in force since 2012, eliminated tariffs on most US industrial goods, which Unit 4 will examine for this machine. Hill and Hult (2019) note that political risk includes not only instability but also changes in regulation and taxes, and Colombia has revised its tax rules several times in recent years.

Infrastructure

Getting a crated roaster from Buenaventura to a farm near Pereira requires a truck route over a mountain pass, with delays in the rainy seasons. Electricity and propane, which the roaster's burner uses, are widely available in the coffee axis. Internet access is good in cities and patchy on some farms, which affects remote diagnostics and software updates. Spare parts are a separate problem: a burned igniter or a failed thermocouple shipped from Tacoma could take two weeks to clear customs and reach a farm, and a harvest does not wait that long.

The roaster's best buyers live on the mountainsides where the trucks take longest to reach.

Conclusion

Colombia is the right first market because its coffee farms are both numerous and moving toward roasting their own harvest, and because they are already asking. The profile also shows three risks the firm must manage: the price of a dollar-priced machine in a peso economy, the distance from port to farm, and a buyer group whose income swings with the coffee market. For a first year, that suggests targeting farms that already sell roasted coffee under their own label, since they have proven demand for roasted beans and a reason to need consistent roasts, rather than farms still selling all their harvest green. The next units will test how these buyers decide, what the border costs and how the firm should enter.

References

Ghemawat, P. (2001). Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(8), 137-147.

Hill, C. W. L., & Hult, G. T. M. (2019). International business: Competing in the global marketplace (12th ed.). McGraw-Hill.

World Bank. (2024). World development indicators: Colombia. https://data.worldbank.org/country/colombia