Different seasons between the northern and southern hemispheres also affect global strategies. JC Penney had planned to open five stores in Chile as part of its expansion into countries below the equator. It wanted to capitalize on its vast bulk buying might for its North American, Mexican and Brazilian stores to provide low prices for its expansion into South America. After opening its first store in Chile the company realized that the plan was not going to work – when it was buying winter merchandiser in North America, it needed summer merchandise in South America. The company quickly sold its one store in Chile; its expansion into South America was limited to Brazil.
South America represents an extreme but well defined example of the importance of geography in marketing considerations. Economic and social systems are explained, in part, in terms of the geographical characteristics of the area. It is a continent 4,500 miles long and 3,000 miles wide at its broadcast point. Two-thirds of it is comparable to Africa in its climate, 48 percent of its total area is made up of forest and jungle and only 5 percent is arable. Mountain ranges cover South America’s west coast for 4,500 miles, with an average of 13,000 feet and a width of 300 to 400 miles. This natural, formidable barrier has precluded the establishment of commercial routes between the Pacific and Atlantic coasts. South America’s natural barriers inhibit both national and regional growth, trade, and communication. It is vast land area with population concentrations on the outer periphery and an isolated and almost uninhabited interior. In Colombia, mountain ranges are a major barrier to travel. The air time from Bogota to Medellin the second largest city in Colombia is 30 minutes by highway the same trip takes 10 to 12 hours. Other regions of the world with extreme topographic and climatic variations are China, Russia, India, and Canada.
Mountains oceans seas, jungles and other geographical features can pose serous impediments to economic growth and trade. Geographic hurdles have a direct effect on a country’s economy markets and the related activities of communication and distribution. As countries seek economic opportunities and the challenges of the global market place, they invest in infrastructure to overcome such barriers. Once seen as natural protection from potentially hostile neighbors, physical barriers that exist within Europe are now seen as impediments to efficient trade in an integrated economic union.
For 200 years the British resisted a tunnel under the English Channel – they did not trust the French or any other European country and saw the channel as protection. But when they became members of the European Union, economic reality meant the channel tunnel had to be built to facilitate trade with other EU members.
From the days of Hannibal, the Alps have served as an important physical barrier and provided European countries protection from one another. But with EU expansion the Alps became a major impediment to trade. Truck traffic between southern Germany and northern Italy, which choked highways through some of Switzerland’s most treacherous mountain roads and pristine nature areas, was not only burdensome for all, travelers but was becoming economically unacceptable. The solution, the 21 mile Loetschberg tunnel opening in 2007, burrows under the Alps and trims the time trains will need to cross between Germany and Italy from athree and a half hour trip to under two. By 2014 the 36 mile Gotthard Tunnel will provide additional rail coverage for the area and be the world’s longest rail tunnel.
Other projects that help to further integrate the European Union, the 10 mile long Oresund Link, a bridge and tunnel across the Baltic strait to continental Europe completed in 2000. It accommodates freight and high speed passenger trains and reduces a five hour trip between Copenagen, Denmark, and Malmo, Sweden, to two and a half hours. Ultimately it will be possible to drive from Lapland in northernmost Scandinavia to Calabria in southern Italy and then on to Sicily when the bridge over the Messina Strait connecting Calabria to Sicily is completed – all tangible symbols that these nations are ending their political isolation from one another as they break down natural barriers in an increasingly borderless Europe.