Venezuela Presented To: Backstage Dancewear- Tap Shoes Presented By:

Location: Puerto Cabello Mathematical Location: 10°N 68°W Situation: Gulf of Triste Formal Region: Northern South America, Venezuela Functional Region: Puerto Cabello

Demographic Transition Birth Rate: 20.29/1,000 + Death Rate: 5.14/1,000 = Natural Increase Rate: 1.5% A somewhat high birthrate and a lower death rate means that Venezuela is in stage three of the demographic transition. Natural increase rate has declined, but population is still growing. This stage of the demographic transition is beneficial for Backstage Dancewear because the country is industrialized, infrastructure is improved, government has funds, people are educated, and labor is cheap. What caused the industrial revolution in Venezuela to boom was the discovery of oil on their land. The market crashed when oil prices dropped. Money earned now is by manufacturing and steel production.

Demographic Analysis Guyana vs. Venezuela: Guyana has a birth rate of 18/1,000 and a death rate of 7/1,000. It has a natural increase rate of only 1.1%. This isn't the best for production because the country is closer to stage four of the demographic transition, which means larger costs. It also has a higher death rate and lower birthrate than Venezuela. Brazil vs. Venezuela: Brazil has a birth rate of 18/1,000 and a death rate of 6/1,000. It has a natural increase rate of 1.2%. It has a lower natural increase rate than Venezuela and more deaths. Colombia vs. Venezuela: Colombia has a birth rate of 18/1,000 and a death rate of 5/1,000. It has a natural increase rate of 1.3%. It is close to Venezuela as far as rates go, but has fewer births. All countries are in stage three of the demographic transition, the ideal stage for production. A larger natural increase rate is desirable. Venezuela has the highest out of it's neighboring countries.

Economic Development Primary Sector: -Farming: corn, sorghum, sugarcane, rice, bananas, vegetables, coffee -Live Stock/ Animals: beef, pork, milk, eggs, fish -Mining: iron ore Secondary Sector: -Mills/ Smelting: petroleum, steel, aluminum -Factories: construction materials, food processing, textiles, motor vehicle assembly Tertiary Sector: -a lot of international trade jobs -doctors,nurses, paramedics etc; (social medicine) -retailers -police force, law This level of development is suitable for manufacturing because more than 15% of the population is working in the secondary sector. That means cheaper labor costs. There are also enough workers in the tertiary sector to ensure safety and efficient help if needed. Higher than 5% in the primary sector means the country is developing, which is suitable for a factory to be put there. The people will accept low wages.

Site Factors: Land and Labor

Site Factors: Resources Proximity to Inputs: -white leather: cows are the main ranching animal of South America -steel: Venezuela has some iron ore mines and steel factories -thread and material: there are many textile factories in Venezuela and thread and material can generally be bought and made anywhere Proximity to Markets: This is a bulk-reducing industry because the leather and steel come in as larger parts and are shaped and cut to make something smaller; a tap shoe.

Situation Factors Headquarters: Pearland, Texas It is 1,158 miles from Puerto Cabello to the headquarters, all by ship. Cost to ship our product to Pearland is $38,000 including freight container and gasoline costs.

Infrastructure: Transportation *anything that is 30,000 is really much higher than that because the graph wouldn't go any higher Roads: -Venezuela: 96,155 -Brazil: 1,751,868 -Colombia: 164,257 Waterways: -Brazil: 50,000

Infrastructure: Communication

Taxes

Social Stability Elections in Venezuela are free and open. Even women have run for president. The government generally duplicates America's. A difference is that the presidential term is six years instead of four. Human rights are very similar, but have caused a lot of controversy, especially with the freedom of speech. Some branches of Venezuela's government have fought against each other and even broken off. Most corruption has occurred because of the discovery of oil in Venezuela. Prices fluctuate and incomes are inconsistent. The money earned in the oil industry was being spent by the government on buying loyalties instead of improving infrastructure. Angry citizens protested this with a lot of success. There are many improvements seen in their government. Venezuela ranks the second least corrupt nation in Latin America.

Conclusion Venezuela has its drawbacks such as higher corporate taxes and poor communication, but we can be assured that because the government is a stronger one, Backstage Dancewear will be protected and cared for. Labor is cheap, and infrastructure in Puerto Cabello is good. Brazil seemed a good location also, but its further distance from Pearland, Texas would cost much more. Choosing this nortern side of South America means no costly passage through the Panama Canal and it's nearly "crow flies" to headquarters. This company will benefit by building a factory in Puerto Cabello, Venezuela.