GENERAL REMARKS ON POTENTIAL TARGETS

 

Countries with high theoretical potential are not necessarily the most interesting.

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Find the country that has the best balance for your business between potential market  ,  product characteristics,   competitive environment , market entry costs, logistics and business opportunities.

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The main difficulty in assessing potential is often due to the lack of knowledge of the destination countries and prejudices:

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- Either these are developing countries and we underestimate the capacity of their market to integrate efficient tertiary services or high-level technologies for industry or IT, the quality of specific industrial sectors, the level of training of their engineers and their management,

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- Or conversely, the successful companies in these countries, out of ignorance, do not dare to attack the European markets (as far as France and Spain are concerned) for fear of not being credible or at the same level . 

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Companies are often influenced by global economic contexts on regions or countries (GDP), current events, trends, macroeconomics, corruption phenomena (mainly in the public sector), without taking into account the opportunities that offers the development of the private sector, the very high purchasing power of part of the population, technological leaps, the existence of local multinationals, the evolution of consumption needs, etc.

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Prejudices die hard.

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Spanish companies often fear the difficulties of being able to penetrate the French market, standards, language and are surprised when they discover the opportunities that the French market can offer them.

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French companies often underestimate the level of development of Spain, (yet 4th European economic power) at the technological level, the vitality of its startups, the first world positions of several of their multinationals in the field of communications, energies renewable, high speed trains, etc. and the opportunities it offers at all levels of internationalization.

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Portugal, companies are just discovering it, with its investment opportunities, the quality of its SMEs / SMIs and its professionals.

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Latin America also offers numerous opportunities for internationalization: export, import, industrial relocation, subcontracting, creation of a company or representative office, Joint Venture, etc. with the advantage that regional agreements and markets represent: NAFTA which opens the door to the United States, Mercosur (which includes Brazil), the Andean Pact.

 

Even if the language is very close, each Latin American country is very specific, culturally, economically, politically, in terms of logistical possibilities, labor policies and wages.

 

The cost of entry into each, the facilities and the time to set up a subsidiary, bureaucracy, corruption, legal guarantees for investment and export of capital, exchange rates, the presence of competition, quality of life, etc., demonstrate the importance of defining a personalized strategy in accordance with the objectives and possibilities of the company.

 

SMEs wishing to develop new markets and reduce costs must be particularly careful to limit the financial and operational risk of inappropriate decisions and "Business Plans" which do not take into account all the realities of Latin America.

 

Professional advice to guide a strategy has a very low cost compared to a single internationalization error.