DOING BUSINESS IN MEXICO

Mexico

Mexico

• Fear of the unknown– Language, culture– Export paperwork– International Insurance, Business Loans

• Budget

• Market entry

Mexico

• 102 million people

• 1.7% population growth per year

• 62% pop between 15-64 years

• 33% pop between 0-14 years

The Mexican Market

• Why is it important?– 2 defined economic groups: rich & poor

• Poor majority does not equal insignificant market

• 30 million consumers w/discretionary income• Concentrated in major cities• Sophisticated shoppers• Rich = really rich = 24 out of 500 richest men

are Mexican.

The Mexican Market

– Largest number of FTAs• Trade US & CAN tripled since NAFTA 1994

– Lots of $ in Mexico - Income distribution: top 20% earn 55% of total & private consumption lead growth in past 2 years

– Actively seeking foreign participation in its economy: no. state owned enterprises fell 1982 >1000, 2000 <200

The Mexican Market

• Exports: $168 billion - 2000

• Imports: $176 billion - 2000

• Infrastructure– Airports: 238 (paved), 1610 (unpaved)– Seaports:15 (major)– Expressways: 3960 miles – Highways: 56,178 miles

Expressways

Mode of Entry

• Exporting– Direct & Indirect

• Joint Venture– Licensing & Franchising– Management Contracts– Turn-key projects– Ownership arrangements

• Foreign Direct Investment

Challenges/Success Factors

• Foreigner• Language Barrier• Work approach• Relationships

• Perception Skills: blending in

• Few words• Access to high

levels & business etiquette

• Networking

Mexican Flag

Doing Business in Mexico

• Conscious of history and tradition - proud and patriotic

• Patience is advised - skeptical of foreigners in their country and business

• “Despacio que tengo prisa”

• Establish reputation by keeping every commitment

Business Savvy

• Initial contact with key decision maker

• Networking: opens doors

• Chambers

• Government contacts

• Before: Research & Recommendations

Business Savvy

• Telephone or verbal? In writing, email or fax & follow up

• Need signature for agreements

• Translations & translators - avoid mistakes

• Do you really speak Spanish?

• Advertising - hire a professional

Business Savvy

• Direct selling– Control over product– Expenses: staff & inventory

• Branch office– US trained personnel in control of ops– 183 days over 12 month-period

Business Savvy

• Broker/Representative– Familiar with your market– Not exclusive

• Master distributor– One client, large shipments– One more on his list?

Business Savvy

• Joint venture– Ownership position in your business– Finding Mr. Right

Business Protocol

• Non-smoking areas - unknown• Who pays? Whoever extended invitation • A woman NEVER pays.• Refer to people by their prefix• Prefix, First Name, (Middle name),

Paternal Last Name, Maternal Last name

Business Protocol

NAME

• Maiden– María (Elena) Gómez Ramírez

• Address– Lic. Gómez / Srita. Gómez

• Married– María Elena Gómez de Rodríguez

Business Protocol

ETIQUETTE

• Woman enters room - stand up

• Carry plenty of business cards

• Don’t be hyperactive

• Don’t look at the watch constantly– allow at least 2 hours per meeting (+ traffic)

• Be on time, expect others to be late

Business Protocol

ETIQUETTE

• Personal space closer

• Touching, hugging, kissing

• Louder

• Hand gestures

Business Protocol

ENTERTAINMENT

• May or may not discuss business– Avoid talking about income, status,

investment & historically sensitive topics

• Watch out for altitude & alcohol!

• Dining takes long, no rush

• Different hours - snacks

Business Protocol

Weekly Schedule

• 8:00-9:00/10:00 Breakfast

• 10:00-2:00 - Office hours

• 2:00-4:00/5:00 - Lunch

• 4:30-6:00/7:00 - Office hours

• 7:00-9:00 - Cocktails, happy hour

• 9:00-Midnight/beyond - Dinner