Smoke detectors - Essay Example

Task “Smoke Detectors” A smoke detector refers to a device that detects smoke. It gives a signal of fire. Several companies such as concept Smoke Systems, Apollo Fire Detectors Ltd among others engage in the smoke detector business in Chile. This essay seeks to examine the both the political risk and consumer behaviour attributed to the smoke detector industry in Chile. As a point of departure the fundamental political risk facing most of the multinational companies engaged in the smoke detectors industry in Chile is the judicial unpredictability on matters concerning contravention of the international environment requirements on the amount of emissions and its effects (Francisco, 234).

This aspect compels companies that contravene these laws and other government policies on emissions to pay more in terms of hefty fines and this weakens the financial positions of most companies resulting to closure or struggling of subsidiaries in emerging markets. On equal measure, corruption has seen the recent claims on the dangers of ionization detectors kept from the public. Conspiracy between the government authorities and the some manufacturing companies forms a significant portion of a political risk on the smoke detector industry, because if the agitation on the issue persists, the companies stand to lose on the profits due to low sales.

The Chilean government’s stability and convenient policies on smoke detector industry have encouraged foreign investors to invest. For instance, Chile’s stronger governance has enabled existence of a favourable taxation policy, which has relatively reduced the cost of foreign investors entering a country. This has increased business activities in the smoke detector industry. In essence, the Chilean government provides a favourable environment for investors in the smoke detector industry through tax incentives and protection against public misconception about the dangers of diverse products.

The target market for the Chilean smoke detectors in the US market is the students and homes. An estimated 20% of homes in the US are installed with the smoke detectors and the government policy requires that all learning institution be installed with such equipment (Razin, Assaf, Vosgerau, and Bufman, 123). This indicates that most of the Chilean smoke detectors land in the schools, colleges and homes. The perspective of this target is that it forms a large market niche for the detectors from the Chilean manufactures.

Similarly, another portion of the US market for the detectors from Chile is the residential pool owners who add up to around 6 million.According to (Short, Whittle, and Owarish, 114), the consumer behaviour in the US market varies from one place to another, however, the general opinion indicates that the smoke detectors from Chile manufacturers are safe, cost effective and efficient. The positive consumer response is attributed to the less number of equipment that has been recalled in the recent past.

The US market enjoys the Chilean product and this trend is expected to continue, if the local manufacturers will continually increase the cost of the equipment.In conclusion, the political stability in Chile plays a fundamental role in encouraging foreign investors in the smoke detector industry. This trend has seen the industry grow rapidly. Equally, the consumer behaviour of the US market on the Chilean smoke detectors is positive because of the aspects of cost effectiveness and superior quality (Parker and Philip, 67)Work citedMoreno, Francisco J.

Legitimacy and Stability in Latin America: A Study of Chilean Political Culture. New York: New York University Press, 2009. Print.Razin, Assaf, Hans-Jürgen Vosgerau, and Gil Bufman. Trade and Tax Policy, Inflation and Exchange Rates: A Modern View. Berlin: Springer, 1997. Print.Short, C A, G E. Whittle, and M Owarish. "Fire and Smoke Control in Naturally Ventilated Buildings." Building Research & Information. 34.1 (2006): 23-54. Print.Parker, Philip M. The 2006 Chile Economic and Product Market Databook.

San Diego, CA: Icon Group, 2006. Internet resource.