This Global Management Project (GMP) is focused on two different international economic development methodologies, microfinance institutions (MFIs) and business incubators for economic development. This is in response to assumptions made by co-founders Mr. and Mrs. Jones (names have been substituted) and their long-standing interest in international development and poverty alleviation. The Jones’ believe that supporting formal above-board business creation and providing ongoing support through the means of a business incubator is more effective at addressing poverty than the approach taken by MFIs to support the informal market and consumption lending. They also believe that there is a market within the study abroad sector for using students and study abroad programs as a resource for international development. Based on these assumptions, the Jones’ wish to enter the study abroad industry and launch a new venture. This new venture, Global Riplz, is a small and medium-sized enterprise (SME) incubator/accelerator whose mission statement is, “to establish Global Riplz as the premier solution for applied study abroad options for business students, bringing together great minds in an environment conducive to innovation while supporting local economic growth.”

As such, this GMP is being completed as a two-stage analysis for the successful strategic entry of this new venture and to answer the question, are economic incubators more or less effective than MFIs at addressing poverty through job creation? Stage one is literature review and discussion of MFIs and incubators for economic development. While, stage two of the analysis is to evaluate the external environment, the major competitors in the study abroad industry, current products offerings and to define the company’s internal environment through the development of a targeted marketing plan.

Introduction

From the 1970’s onwards a large number of MFIs got underway in Latin America. This was due primarily to US government funding and “the perceived need to provide the poor in Latin America with the hope of a way out of poverty” (Bateman, 2013, p. 12). By the 1990’s the microfinance model was thoroughly embedded within Latin America’s economies. Financial systems and resources were being shifted away from higher risk and less profitable applications such as registered SME development and into microfinance and consumption lending (Bateman, 2013). This shift in economic development policy sparked rapid rise in the informal sector in the 1990’s (Loar and Marquez, 1998).

After extensive experience working and traveling in Latin America, Mr. and Mrs. Jones have developed a long-standing interest in international development and poverty alleviation. They have developed a desire to launch a new venture that might be able to help address economic development and job creation. The founders have based the concept for this new venture on two major assumptions including, their belief that supporting formal above-board business creation and providing ongoing support is more ef