Companies that operate efficiently in LATAM benefit from incremental revenues, access to Global 2000 companies, and develop a WW customer base.
Despite the opportunities in the LATAM marketplace and the rapid acceleration of technology adoption (please refer to: Blogclean Blog!!) companies delay doing business in LATAM. We call this postponement “the LATAM deferment,” situation in which companies, instead of pursuing a parallel internationalization process, choose not to operate in the region.
This delay is explained by factors that can be grouped in two major categories:
1. Investment decision that would benefit large and more stable markets:
- Evaluating investment of entering LATAM vs developed countries or regions.
- Comparing the small LATAM addressable market potential of LATAM vs other business alternatives
- Applying a higher hurdle rate, either explicitly or implicitly, in the ROI calculation to factor-in LATAM’s political climate and economic cycles.
2. Region Complexity which is hard to manage through without the right expertise:
- Difficulty of planning and execution in a region with multiple languages, countries’ sizes, and business practices.
- Complexity of LATAM business regulations. Five of the ten countries with most complex business governance in the world is from Latin America (TMF Group)
- Scarcity of qualified candidates to represent an IT vendor in the local market, results in costly proposition.