Mexico’s Mining Industry

8 Negocios ProMéxico Negocios ProMéxico 9
Five Lessons for
successful
InternatIonalIzatIon
The process of expanding a business internationally is a path
that can follow many routes, whether winding or direct, through
export, investment or acquisition of companies abroad. The
operation of subsidiaries in other countries enables firms to
diversify risk, generate income in other currencies, reduce costs
and gain more experience in new business opportunities.
____
According to the World Investment
Report (2012) by the
United Nations Conference on
Trade and Development (UNC-
TAD), in 2011 Mexican companies invested
about 9 billion usd abroad. This placed
Mexico as the country with the secondlargest
outflow of foreign investment in
Latin America, just behind Chile.
The food manufacturing, infrastructure
and service industries are the sectors that
have generated the largest number of international
companies in Mexico. Some take
their time to make the crossover and some
are born global. This note draws on some of
the strategies that the most successful Mexican
companies have applied to break into the
world market.
1. There is sTrengTh in numbers
Approaching an unknown market can be
daunting, which is why it is helpful to have
a partner who knows the market and is
willing to share the risk. An example of
this strategy is the joint venture between
General Electric (GE) and Mabe, signed
in 1987. Since then, both companies share
product lines and business strategies,
which enabled the successful internationalization
of Mabe and the mutual transfer
of technology and innovation.
by alba zazueta gaxiola*
photos archive
2. innovaTe, innovaTe,
innovaTe
With specialization in its product line and
strong vertical and horizontal integration,
including the purchase and merger of foreign
firms, Cementos Mexicanos (CEMEX)
became a success story in the global industry.
Based on its innovative and cutting-edge
logistics strategies, use of information technology
and a modernized service to clients,
the firm made its processes more efficient,
both in its own companies and in those it
acquired, and has continuously improved its
competitiveness.
3. Don’T hiDe your lighT
unDer a bushel
In 1999, Corona beer launched its “quality
has no boundaries” campaign, which has
helped to position the brand on the world
market and to associate it with Mexico and
its culture. This campaign stood out thanks
to its emblematic presentation of Mexican
elements at equally renowned global
locations (such as the Great Wall of China)
or using other national symbols (like the
Canadian Mounted Police), while stressing
the undeniable quality of the product. The
effort to internationalize this brand began
with exports to the US, Japan and several
European countries in 1985. Currently, it is
distributed in over 170 countries and has
established itself as the fourth most valuable
beer brand in the world.
4. all publiciTy
is gooD publiciTy
Who would have guessed that bad publicity
could bring benefits to a company?
Such was the case of the automaker Mastretta
and its MXT sports car. In 2011,
a British TV show called the first car to
be 100% designed and manufactured in
Mexico a product with a low level of competitiveness
in the automotive industry.
Rather than causing rejection, these assertions
aroused the curiosity of consumers
and led to the vehicle winning
recognition on the specialist automobile
market worldwide. The MXT is an elite
sports car that is distributed only upon
request and has been sold in the US, UK,
South Korea and France, among other
countries.
5. Know your TargeT
Identifying potential customers and affinities
with the productive capacity of
companies is crucial to advance the internationalization
process and effectively
measure business opportunities. Some
companies have had to adapt their products
to enter new markets. In the late
1990s, the tortilla dough company Gruma
made a full entry into the European market,
positioning new bread products in a
multicultural market. For that purpose,
the group acquired a number of plants
in Europe and Asia, indicating a growing
international presence.
Other Mexican companies such as
Kidzania, Cinépolis, Nemak, Bimbo,
América Móvil, TRALCOM, Ingenieros
Civiles Asociados (ICA) and Sushi-Itto
are also clear examples of the corporate
consolidation that has been implemented
across the globe in recent years. These
companies have shown that the capacity
to adapt and innovate is key to surviving
the process of natural selection in an
increasingly globalized economy. Moreover,
it sets the challenge of continuing
the successful internationalization of
Mexican companies and brands in order
to achieve the consolidation of Mexico as
a hub for development and growth. n
*Economist from the Tecnológico de Monterrey
(ITESM). Holds a Masters in Economics from
the University of Essex, UK.