How to Enter the Latin America Market?

Latin America and The Caribbean is one of the most dynamics regions in the world having an economy of US$ 6 trillion, population of 620 million people, and an IT market estimated to be $300 Billion. The size of the Brazil’s and Mexico’s economies, the new insertion of Argentina in the world financial markets, and the growth experiencing by Chile, Colombia and Peru makes this region a very interesting one for IT vendors to participate in.
As described on our blog dated March 26th, the region brings a level of complexity that requires knowledge and experience in the various countries to be successful. In addition, the current economic slowdown has caused a recession in some countries like Brazil.

In the book “Winning in Emerging Markets” (Harvard Business Press, 2010), the authors Tarun Khanna and Krishna Paletu, who have many years studying multinational companies entering new markets, present an interesting approach on how to be successful in emerging markets. This blog highlights some of the concepts discussed in the book:

One of the question we most commonly answer to companies entering the Latin America is if doing business South of the border is that different. The answer, similar to other international markets, is: Yes, and No.
On the No side, doing business in Latin America is similar to the US since Latin America is comprised of democratic countries with market driven economies, the rule of law, comparable vertical markets, and technology adoption that--with a time lag—mirrors the US.

The Pacific Alliance (PA), Alianza del Pácifico in Spanish, is one of two major trade blocks in the Latin America (LATAM), and is comprised of Chile, Colombia, Peru and México.

The GDP of the PA countries makes them the 8th largest economic power and a population of 216 M people. It represents LATAM’s 38% of GDP and 50% of trade. PA was founded in 2011 and its charter goals are: