Publication

Five key factors to become a Global Latino business

May 17 2016
Executive Education INCAE

According to the geographic distribution of its assets and its customer base, there are five categories in which Latin American companies are located, according to a study carried out by the company Deloitte.

Are the companies Local Latinas, which contain their operations within their own country, export little or nothing.

Those that export significantly within and outside of Latin America are called Exporting Latinas.

Then the multilatinas, that operate in multiple Latin American countries, but do not have significant business outside the region. Along with them, in this same category are the Multilatinas Regionales companies, which do not export much outside of Latin America, and the Multilatinas Exportadores, which do.

The fifth category is that of organizations Global Latinas which are companies that operate in multiple countries (with clients, revenues and operations within and outside of Latin America) and generate significant income outside the region.

Becoming Global Latinas involves five factors, the existence of which can give the company a differentiating advantage in the global area, although it is not always a guarantee of success.

These factors are divided, in turn, into two categories:

Competences

Improving through your own actions to boost competitiveness is what the following factors give:

• Establishing a market leadership position in their local markets

• The development of strategies and capabilities that focus on acquisitions and joint ventures as the main mechanisms of international growth.

• Adoption of world-class governance practices

Structural advantages

Along with them there are two more determined factors within the group of structural advantages, which means that they are mainly determined by the national business environment of a company:

• The availability and retention of qualified senior executives to lead international expansion

• Access to capital markets and financing

Brazil and Mexico stand out in these areas in relation to the other countries of the region. However, Brazil performs best in both categories and therefore hosts a disproportionately high number of Global Latinas, providing a clear policy model that can be emulated by other Latin American governments.

Country-based companies without those two structural advantages can still be successful globally; they just have to follow a harder path and must make a conscious effort to define alternative strategies.

Additionally, they may have to pressure their governments to implement new programs or redefine national policies to strengthen those areas, specifically:
1. Education programs that cultivate global leadership talent.
2. Business development or financing programs that help finance the

international business growth.


Excerpt from the study carried out by the Deloitte company entitled: Multilatinas -Key factors for regionalization in Latin America

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