Is it the land of promise for business in 2020 and afterward?
Almost all economic analysts and business observers have positive attitudes toward the future of Latin American economies, and they expect more economic growth in almost all the continent’s countries.
Music to the ears of global-minded businesses that wish to enter the markets of Latin America?
Definitely Yes. Everyone believes that the region of South and Central America is prepared to survive the short-term economic impact of Coronavirus pandemic and to continue to sustainably grow in 2021. According to many estimates, [https://www.cepal.org/sites/default/files/pr/files/table_press_gdp_preliminaryoverview2019-eng.pdf], Brazil, Mexico, Argentina, Colombia, and Chile, the five largest economies in Latin America, are projected to achieve positive growth.
So, what about the attitude of investors?
According to a survey that was conducted by Biz Latin Hub two months ago, the majority of respondents said they would be expanding their business into Latin America and expressed a positive attitude about the abilities of South America’s economies to improve in the post-coronavirus era.
Therefore, we may logically attribute investors’ overall positivity toward Latin America as a viable business destination to several factors, including the region’s competitive labor costs, the continued economic growth, and the region’s nearness to American markets.
However, we still need to answer a few important questions. Is it enough for an investor to believe in the feasibility of investing in a certain market or country? Is it just an issue of taking your product to Brazil after having done well in London or Chicago? Do cultural nuances matter? Let’s see!
How Culture Affects Work Practices in Latin America
“Don’t cry for me Argentina
I kept my promise
Don’t keep your distance”
In the musical masterpiece, Don’t’ Cry For Me Argentina, Madonna told us in a beautiful way how things might be culturally different across this wonderful continent, Latin America! Significantly, this applies to the sphere of business too!
Yes, culture makes a difference when it comes to expanding your business into such countries as Brazil, Argentina, Honduras, Guatemala, and the other countries of Latin America. So, what are the main things that everyone should take into consideration about Latin America’s cultural idiosyncrasies? Let’s look at some of them.
First, across most Latin American countries, except Argentina and Costa Rica, the company is regarded as a family. For instance, at most businesses, a senior executive usually has a personal obligation to protect subordinates and to care for the personal needs of workers and their families.
It’s a paternal culture of managing a business. One of the advantages of this style is that managers and senior staff are viewed as fathers who care for their subordinates as sons and daughters. Significantly, one of the main disadvantages is that these kids might wind up being too dependent and passive throughout their career paths.
Second, in Latin America, personal relationships are very important. Companies know that they can’t continue to do business in these countries unless they have good social and governmental relations.
Third, popular celebrations, including religious events, are playing an important role in the workplace of Latin American businesses.
Fourth, teamwork is part and parcel of the standard culture prevalent across Latin America. Employees always attach great importance to social relationships based on personal communication and empathy, which is essential to teamwork.
Last but not least, when it comes to the confrontational style in times of conflict, in the Dominican Republic, they prefer autocratic intermediaries. In Argentina, people prefer mediating between parties in a conflict. In Mexico, the trendy style involves concern for others. However, in times of conflict, most people across Latin America would identify with their ‘in-group,’ rather than the organization. This is natural for a culture that prefers social networks based on friendship.
So, it seems your business is going there? Take this and take it firmly!
Tips for Expanding into the Latin American Market
Let’s now suppose that your business seriously intends to have some sort of presence in Latin America. Since LatinoBridge has been for 10 years using our business localization solutions to help businesses in various industries to expand and thrive into this part of the world, we’ll give you a few tips to take into consideration upon entering Latin America’s market.
First – Take Your Time to Identify the Most Attractive Markets: Don’t be in a hurry. You need to study the market, review your resources and take your time to understand each advantage and every risk before you’re ready to unlock the full potential of Latin America.
Second – Visit the Countries You’ve Chosen to Expand into: Yes, research and investigating the information of others may be great, but they can never replace the insight you’ll get from visiting the countries and seeing things on the ground. You’ll have to see if your product or service will work in Sao Paulo as it did in Seattle. Do it yourself!
Third – First Things First: When you’ve reached this stage, you now need to decide which country to start with, Brazil or Argentina or Honduras for instance? Your experience and resources might match this country but not the other one. It’s a choice which differs from company to company, and from industry to industry.
However, to choose which country to start with, you will have compared the various countries based on research and investigations. No guessing or gambling here!
Fourth – Define Your Right Market Entry Strategy and Business Model: Yes, it will take some time and numerous experimental trials, especially if it’s your first time to do business in this area. Yet, you’ll finally decide on a definite market entry strategy and a specific viable business model to carry out. What is important is that once you have done that, you need to stick to it and give it sufficient time to make it work.
However, it may be important for you to remember that to do good business in Latin American countries, you need to listen to the pulse of the continent’s business culture. It is incredibly relationship-based. You won’t do unless you build a rapport on a personal level first and regularly meet face-to-face with partners and clients. These are the rules there, whether you like it or not!
Fifth – Choose the Right Local Experts and Partners: Focus on your core responsibilities and hire local experts to take care of the rest.
Sixth – Time for Projecting Your Budget: When you reach this stage, the only piece of advice is for you to avoid unrealistic sales projections. In other words, you need to be very conservative in estimating your sales and a little generous in estimating when your business will hit the break-even point.
Seventh – Start Confidently with your First steps: It’s D-day after all this effort. Ok, don’t worry, go quite confident that each step forward and each strategy will depend upon a few factors, including, but not limited to, your company resources and the market conditions.
However, suffice it, for now, to remind you of two things. First, outsource all non-core activities to focus. Second, each market is different, so refer to the experience of other markets with discretion and a bit of caution.
For more than 10 years, our job has always been as simple as that: We provide business localization services that help our regional and global clients expand their business across the globe.
According to our corporate customers, when they launched their products in any new market, our services would make their audiences feel like these products were designed for them. In other words, a website, or any other digital product, localized by LatinoBridge usually looks like it was created in the target culture, for the target culture.
When it comes to objectives, we’re clear. With us, you’ll achieve 3 goals. Increase reach. Improve user experience. Grow global sales. Boost ROI. Sorry, they turned out to be 4!
Contact us today so our experts may discuss how to help grow your business worldwide.