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The purpose of this report is to advise the chief executive officer of Cisco Sytems (pty) Ltd, on the impact of globalization on the company and also on the potential for expanding the operations into Mauritius.

Extracts from this document...

Introduction

Executive Summary The purpose of this report is to advise the chief executive officer of Cisco Sytems (pty) Ltd, on the impact of globalization on the company and also on the potential for expanding the operations into Mauritius. Cisco Systems in South Africa is strategically positioned to help further entry into the African continent. The company has expanded in many European, Asian and US markets with success but now the focus is on the South African entity to do the expansion through Africa. Mauritius was chosen due to its strong and consistently growing economy, political stability and it is ready to embrace the use of technology according to the Mauritius Board of Investment (www.mauritiusboi.gov.mu). Mauritius also has plans and incentives to attract foreign investment which makes entry into the country much cheaper and rewarding for investors. This study has covered areas relating to the Mauritian economy, government, local and international social and political issues with relevance to Mauritius as a potential investment opportunity. The Mauritian economy is now diversifying into new industries such as Information Technology, financial services and light engineering. The economy is growing with an increasing GDP, year on year, and with a highly literate workforce. The location is also strategic in terms of it proximity to South Africa and to the rest of Africa. Mauritius has strong trade agreements with South and the rest of Africa and has always been a good business partner to South Africa. Given, these factors an in depth study has been taken into the feasibility of investing into the country. TABLE OF CONTENTS Item Page Introduction 4 - Cisco Systems - Company Background 4 - Cisco Systems South Africa 5 The Information and Communications Technology Industry (ICT) 6 Country Background 7 E Commerce 8 Growth 8 Resource and Environment 9 - ICT Sector 9 - Labour Force 9 - Globalization 10 - Trade and Finance 10 Fiscal Policy 10 Monetry Policy 11 Taxation 11 Corporate taxes 11 Personal Income tax 11 Value Added Tax 11 ...read more.

Middle

Cisco is in the business of setting up networks and IT infrastructure which is the platform for E Commerce to be able to take place, thus would be in an extremely beneficial position as business in Mauritius starts to embrace the E commerce concepts. Growth There is a definitive strategy towards growing the economy and country as a whole. The ministry of economic development and corporate affairs, has done a national long term perspective study which is called the Vision 2020. The reports sets out plans to grow by focusing on quality and doing things well. Tourism is still a strong growing industry and focus will continue to stay with this industry. There is a drive to be the region's leader in the banking sector and to have the computer and linguistic skills to be accessible from anywhere in the world. Resource and Environment ICT Sector Information and communications technology is the focus as the new sector on which the economy will be built. Government is partnering with business on this project to make technology accessible to the people. According to the ministry of economics, there is a plan to transform Mauritius into a cyber island. The Business Park of Mauritius, Ltd. was set up by the government to spearhead the development, construction, and management of major business and IT parks in Mauritius. It has secured $100 Million from the Indian government for the creation of the first cyber city at Ebene, according to www.state.gov (2004). The cyber city concept has been attractive to companies in this sector and they have set up operations in these locations. The de regulation of the telecoms industry and the optic fibre cable that has been laid according to the Southern Africa Far East (SAFE) operation, has given the ICT sector the impetus that it needed. Labour Force The Labour Act of 1975 protects the workers rights in terms of remuneration, leave days, salary increases and terminations. ...read more.

Conclusion

petrol pries and destruction of sugar products - Devaluation of the Euro has impact on Mauritius as a large portion of its exports go to the euro zone. Conclusion Mauritius is has the profile of country that is feasible for investment and has the incentives necessary to provide Cisco Systems South Africa with a real opportunity for growth and further their plans for an African expansion. Mauritius has the stable economic and political platform that will allow Cisco SA to easily fit in and take hold of the opportunity for potential growth that exists in the country. Investment incentives that are offered by the Mauritian board of investments is very attractive to enter a country that has such real opportunities anyway. Cisco has the option to reduce it tax payments, duties and also should it use Mauritius as a entity to expand it into other countries it could well have its foreign revenues tax free. These benefits of setting up in Mauritius will help Cisco to remain competitive in spite of any challenges it may face as a result of expanding operations. The vision 2020 that Mauritius has is one of growth is all sectors of the economy and a sign of a country that wants to continuously improve itself for the benefit of its people. Tourism will always be one of the main pillars of the economy and given its location, landscape and unending beauty people will be drawn to this location. The ICT is being given all the support that it needs to be the future growth mechanism for the people, economy and government of Mauritius. This is is Cisco's playing field and therefore and drive in the sector will continue to create opportunity for the company. Based on the fact the ICT sector is receiving the investment at this present time and in consideration of the social, political and economic strengths of the country, Cisco is now presented a golden opportunity to make sound investment. References Reference from books Surjit, B. ...read more.

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