Thursday, January 25, 2007

Researching the Mexican market

Many messages I receive ask for assistance to find a particular type of business such as medical or computer companies. Often the person will state they want to find these companies "in Mexico".

Here's a potential problem. When someone simply asks to find companies in Mexico, what they are often saying is they have not researched the Mexican market. These professionals believe or "feel" that Mexico is a good market for their company's products or service. However, they may have few hard facts or industry reports to back up this belief about Mexico's market. I'm also making a generalization as if all of Mexico would equally welcome a company's product or service.

U.S. companies may assume that because their product or service is doing well in the U.S., this automatically means they will do well in Mexico. These companies could be correct. Or they could suffer massive losses as Wal-Mart did with the German market.

Wal-Mart is known as a company that does its homework before entering new markets. For whatever reason, Wal-Mart entered the German market without having a clear understanding of the demands and desires of the German consumer. Early on Wal-Mart suffered massive losses. One industry observer commented that Wal-Mart might eventually prevail but only because of the company's deep pockets. Last year, Wal-Mart pulled out of Germany. Imagine the billions of dollars Wal-Mart lost trying to enter the German market.

All companies including those of the U.S. would do well to emulate the example of Japanese businesses. They have a reputation of investing no less than two years to research a market before a sell is ever attempted. For many companies, two years is too long; however, the time spent on researching a market will give huge returns on investment either through increased profits or saving.

Preparation is vital for companies looking to enter the Mexican market. Research will provide guidance on where in Mexico your company should focus. When your company is ready to move forward, you will be working from a position of strength and knowledge rather than from a weaker position of uncertainty. And you'll be able to tell others exactly where you're going in Mexico.


Richard Villasana
Expert on Mexico culture, communication and business practices

Sunday, January 21, 2007

Immigrant Plan between Mexico and U.S.

In a press conference held in August 2001, it was announced that a preliminary agreement on an Immigration Plan has been reached between the U.S. and Mexico. Speaking for the U.S., then Secretary of State, Colin Powell, said the two countries would begin talks to form concrete proposals including a program to grant temporary residence to Mexicans working in the U.S.

Mexico's Foreign Minister Jorge Castaneda said the agreement would include protection of "the rights and the benefits Mexicans need - all Mexicans," who are living in the U.S. In 2006, Hispanics became the largest minority in the U.S. with more than two-thirds being of Mexican origin.

Immigration is still a hotly debated topic between the two countries. Escondido, California is just the latest entry into this discussion. The city is attempting to establish legislation that would fine apartment landlords if they rent to illegal immigrants.

Yet despite concerns over immigration, U.S. companies view Mexico as one of the leading markets for their products and services. Mexico is one of the largest economies in the world. Some economists speculate Mexico's economy will surpass that of Canada by the end of 2007.

Smart business owners recognize Mexico as an attractive market with commercial benefits due to NAFTA, the North American Free Trade Agreement. Since the agreement in 1992, trade between the three countries, Canada, Mexico and the U.S. has increased over 128%.

More businesses are being drawn to Mexico for both the economic opportunities and Mexico's young consumer base. These consumers view U.S. made products and services in a very favorable light.

The task now is for U.S. companies doing business with Mexico to develop solid relations with their Mexican associates. Knowing the business culture and how to properly communicate is becoming more important every day as other competitors such as China, Japan and the European Union increase their investment and trade with Mexico.

Companies from these countries are highly skilled in cross-cultural communication. It's up to U.S. companies to enhance and expand their own expertise in cross-cultural communication or risk falling behind the competition.