How to determine who is your best customer

21 12 2006

How do you determine who is your best customer or best employee?

The usual method is by analyzing revenue or sales.  The customer who buys the most, or generates the most profit is the best customer.

We almost never pin the “best customer” award on the client who pushes us, complains and forces us to change, unless they meet the sales volume or profit test.  It is exactly the “uncomfortable” customer who may be providing the new ideas required in order for your organization to survive in the future.

The same criteria applies to your employees and staff.  Who is the “best employee”?  Is it the conformist, the one who never makes any waves, never creates conflict or challenges your ideas?   The disruptor, the individual who questions and challenges the status quo,  might be your organizations best friend.

There are three types of organizations; one that creates the future, one that adapts to changes in the future, and one that fails to survive.

Your “best” customers and employees should be helping you prepare for tomorrow, not just sustaining your operations today.

Related Links

The Easy Way

Does your company like new ideas 

Individuality and chaos in the workplace 

Successful managers should be breaking the rules





Corruption in Mexico

15 11 2006

Corruption in Mexico.

Quite a bit of interest generated from the piece regarding corruption and bribery in Mexico. Corruption, bribes, mordidas, tips – Doing Business in Mexico

Don Gringo says “Mexico possibly has one of the best governments anyone could buy. And cheap, too.” Catemaco News and Commentary

Bernard Wasow writes in the Globalist “It is no secret that the at law enforcement in Mexico is a “for-profit” business.” Greasing Palms: Corruption in Mexico.

Wide Angle presents a Corruption Chart; How big is Mexico’s problem. Which gives a great state by state overview and comparison of corruption levels in Mexico.

A quote from the page: “According to anti-corruption czar Francisco Barrio, the cost of corruption by government officials and by everyday Mexicans surpassed the amount budgeted for education by more than three percentage points — some 9.5 percent of Mexico’s GDP of $550 billion. Recent studies by the World Economic Forum, an international organization that works to improve worldwide economic conditions, found that the business environment such as rule of law, transparency and corruption were disincentives for foreign investment in Mexico. Corruption, which is often described as a tax, adds to the cost of doing business. The Opacity Index, a study conducted by Pricewaterhouse Coopers, found that Mexico lost $8.5 billion in foreign direct investments in 1999 due to corruption and other suspect legal or economic practices.”

Corruption exists in every country in the world, in politics, in business, in everyday life. In some countries it’s more sophisticated or hidden, in others it’s obvious and required in order to get things done. Mexico is no exception.

People seem to ignore corruption in their own countries, and react with shock and anger to corruption in others.

Depending on where you live in Mexico, what you are trying to do, and who you are dealing with, your experience with corruption and bribery will not echo anyone else.

Evaluation of Mexico, China, Brazil, India or any other country as a potential business location or market should include an analysis of how corruption will threaten and affect your operations, efficiency and bottom line.

Your organization should have a clear understanding of the situation and create a set of rules governing how to deal with the reality and any situations that might arise.

You have to ask and answer the question, “do I want my organization to participate and be involved in corruption and bribery, and at what levels”?

Get advice and information from local businesspeople and consultants on the reality of corruption and bribery. Learn how the culture deals with it, detects it and punishes it before you commit to a strategy, path or action plan.

Related Links

How to do business in Mexico, Parts 1 – 28

Tipping guidelines for Mexico

Doing Business in Mexico – cultural tips

World Corruption Perception Index – 2006

Patience chaos and doing business in Mexico





Questions – Answers, Doing business in Mexico

14 11 2006

Have any questions about how to do business in Mexico?

Any specific problems or dilemmas related to doing business in Mexico?

Questions about the business culture in Mexico or Mexican culture in general?

Would you like to know more about a specific theme related to Mexican business?

Need references or information about organizations, people or associations in Mexico?

Send your questions to me at   lee.iwan  at  gmail.com
or post a comment here.

Related Links

How to do business in Mexico

Official government websites of the 32 Mexican States 

The definitive dialing guide for calling Mexico

Shorten your learning curve about Mexico

Business South of the Border





Use of business titles in Mexico – Doing Business in Mexico

3 11 2006

The use of business titles in Mexican business life is important.

Most people with professional degrees are addressed using their professional title. This is especially true in written communication. Failure to do so can be seen as lack of education and offensive.

Until you get to know a person, always use the professional title or full name, never address them by their first name until it is clear that they are comfortable with this.

You can ask how they wish to be addressed if unsure. It’s better to make a mistake on the side of formality.

Some titles are general, and when in doubt regarding the professional title, you should use these:

  • Joven – refers to any young man from birth to adolescent.
  • Señor (Sr.) – refers to any male older than an adolescent.
  • Don – a term of great respect used to recognize older males.
  • Señorita (Srta.) – refers to any unmarried female. Once a woman is above a certain age, she is referred to as Señora, even if unmarried.
  • Señora (Sra.) – refers to any married or widowed woman.
  • Doña – a term of great respect used to recognize older females.

Professional titles

  • Doctor (Dr.) masculine, or Doctora (Dra.) feminine – Refers to anyone with a PhD. or Medical Doctors degree.
  • Licenciado (Lic.) masculine, or Licenciada (Lic.) feminine – refers to anyone with a law degree (most common usage) or Bachelor’s Degree.
  • Contador Publico (C.P.) – refers to anyone with a public accounting degree.
  • Ingeniero (Ing.) – refers to someone with an engineering degree.
  • Arquitecto (Arq.) – Refers to anyone with an arquitectural degree.
  • Diputado (Dip.) masculine, or Diputada (Dip.) feminine – refers to a publicly elected official equivalent to Federal, State or Local representative in the USA.

Related Links

Doing Business in Mexico – Cultural Tips

Patience, Chaos and Doing Business in Mexico

How to do business in Mexico

Criticism – how to do business in Mexico

Meeting people in Mexico

How to negotiate with Mexican business people

How to call Mexico from the USA





Doing Business in Mexico – cultural tips

1 11 2006

When doing business in Mexico you are very likely to see some, or all, of the following during a business trip. It’s part of the Mexican business and social culture.

  • Late arrival for meetings by participants. This might be up to 30 to 45 minutes late.
  • Cancellations at the last minute.
  • Changes in agreed upon plans and agendas.
  • Long lunches or dinners, where business talk is not the major theme.
  • Meetings that seem to go on for a long time before coming to the business issue.
  • People will gesture and use their hands a great deal while speaking.
  • There will be a degree of emotion in business discussions and presentations.
  • People will be very formal and polite.
  • People will sit very close to you when speaking, and often touch your arm or shoulder while talking.
  • Your Mexican partners will not be forth coming and explicit regarding bad news.
  • You will not hear the word NO a lot.
  • Deadlines may not be met for reasons that you don’t understand or don’t believe.
  • Until you establish a social relationship with your Mexican business partners, your business discussions will seem very vague, cold and unsatisfying.
  • Decision-making may be extremely swift or excruciatingly slow. You never will know why.
  • Dinners, parties, weddings and social gatherings last for hours. There is no such thing as a 2 hour cocktail party.
  • You will be encouraged to eat everything, drink plenty and enjoy yourself while in Mexico. Failure to do this is seen as a refusal of hospitality or a sign that you are not comfortable in Mexico or with your hosts.
  • In a social gathering the men will tend to congregate in one part of the room or table and the women in the other.

 

Related Links

 

Patience, Chaos and Doing Business in Mexico

How to do business in Mexico

Criticism – how to do business in Mexico

Meeting people in Mexico

How to negotiate with Mexican business people

How to call Mexico from the USA

Great International Business Trip Results

16 Essential questions – the international business traveller’s quiz





Great International Business Trip Results

16 10 2006

In any international relationship communication and understanding are critical for success.

Problems created by; language, stereotypes, misinformation, lack of information, and cultural misunderstandings combine with normal business problems to create a complicated scenario for anyone involved in international relationships and global business.

Prepare your international meetings and business presentations using the following questions as a guide to organize your ideas and focus on actions that will produce positive results for everyone involved.

6 Questions – Create Great International Business Trip Results

  1. What does this organization know about me, my company and my country?
  2. What do they think they know about me?
  3. What can I tell them that they do not know?
  4. What do I know about my international partner, culture and country?
  5. What do I think I know about this business, culture and country?
  6. What can they tell me that I do not know?

1. What does this organization know about me and my company. When you walk in the room an opinion has already been formed about you, your organization, and your ability to perform in the future. These ideas are based upon facts, information and past experience.

  • What has been the history of our relationship in their country?
  • Who has been involved in our mutual business, and why?
  • What promises have been made and kept by both?
  • What promises have been made and not delivered upon?
  • What have the major problems and success been in the past?
  • Press and media, our organizations promotional material.

2. What do they think they know about me. Clarifying the unknowns or presumed realities in a relationship is crucial to success. These ideas may be very damaging and limit your ability to trust one another. What stereotypical behaviour can you avoid or prevent? What can you clarify or refute through information or actions?

  • Behaviour and reacts based upon past experience with your organization.
  • Rumour and innuendo, press and media reports.
  • Negotiation styles.
  • Business objectives.
  • Behaviour, goals and methods of doing business based upon country and cultural stereotypes.

3. What can I tell them that they do not know. Today’s business world requires trust, information and solutions. Reinforcing your need to work with your international partner, providing important information or solutions, and clarifying misunderstandings can only help the relationship.

  • Clarify or destroy cultural stereotypes.
  • Clarify business objectives and why they are important in order to reach these objectives.
  • Provide solutions and alternatives to existing situations and challenges.
  • Provide information of value for their business and strategy.
  • Clearly identify current or potential business problems.
  • Predict and have answers ready for their questions.

4. What do I know about my International partner, culture and country? What do I know is true and not innuendo or interpretation? The numbers, facts, information, agreements and past performance history of the business. Information about the country and the business culture.

5. What do I think I know about this business, culture and country? What preconceived ideas and stereotypes are you working with? What are you assuming and what has been proven?

6. What can they tell me that I do not know? What questions do you need to ask in order to verify information or create plans. What pieces of your information puzzle are missing? This is the time to get your questions answered, what are they?

Related Links

Cultural misunderstanding it can happen to you

Stereotypes and global business

Create great international business relationships

16 Essential questions – the international business traveller’s quiz

Lessons in international business





Lessons in international business

10 10 2006

The most difficult part of doing business overseas will occur when you have to explain your country’s politics and culture, and provide answers on why you do things the way you do.

Related Links

Cultural misunderstanding it can happen to you

Stereotypes and global business

International business traveller, ambassador, explorer, map-maker





The easy way

9 10 2006

Despite all the attention on the power of marketing in order to create and maintain a successful product and business, there are still many organizations and people who don’t want to, or don’t know how to market their products.

They want others to buy their product because they are less expensive than the competition.

It’s the easiest way to sell, requires no planning, no marketing, no effort on the part of the salespeople or the organization. Quick short term results.

Everyone is in the market with the same goods, all screaming and shouting for the customers attention. The customer finds the seller by accident or luck, and proceeds to bargain and negotiate for the lowest price in the market. Very colorful.

It shows a lack of responsibility, lack of marketing, and lack of imagination on the part of the seller.

The owners say: “We need more profit, cut costs and sell more”.

The sales managers say: “We can sell more, but the product is a commodity, what can we do, cut the costs and we can corner the market”.

Production says: “We’ll cut costs, get cheaper raw materials and tweak the design”.

Buyers tell suppliers: “We can try your raw materials or products and see if the market accepts that price, but you have to give me a better price if you want me to buy more”.

Salespeople tell the sales manager: “I don’t know if I can meet that sales quota, it’s not up to me, it’s up to the market to decide”.

Salespeople tell the customer: “We’re cheaper than the competition, buy now”.

The competition is doing the same thing you are.

The customer faced with similar products and lack of information says: “Give me the one that costs less”.

Where was the marketer during all this?

What should they have been doing and saying to the organization and the customer?

If your product isn’t distinct, different or better than the competition. If you are not educating your customer about the advantages of your products and services. You will never have to the chance to market your products.

You will only be able to offer them for sale.

Related Links

Seth’s Blog: Cheaper

The power of something extra

Sales and marketing terrorism





20 ideas – how to avoid major problems with your export business

29 09 2006

Exporting is an extremely difficult process as compared to selling in the local or national market. Exporting is not easy, and it’s not inexpensive. It takes planning and requires people that are open, flexible, problem-solvers, and quick at adapting to new situations.

A smart organization that desires to export their products will invest time and money building the proper administrative and sales structure before they begin operations.

20 ideas – how to avoid major problems with your export business

1. Say no to customers. When you can’t do it, say no upfront, before you make an agreement.

2. Create an export strategy before you begin to export. Don’t get sucked into exporting by “accident”.

3. Samples should be equal in quality to the actual production that will be shipped.

4. Make everything perfectly clear with customers. Don’t assume anything, don’t work with suppositions.

5. Learn and understand the business culture of your export market and customers before you begin.

6. Provide detailed price lists and price quotations to the customer. Understand your Incoterms (if you don’t know what these are, stop know and click here)

7. Contemplate what problems might possibly arise (internal and external) that could affect shipment or delivery. Prepare alternatives or take preventive action.

8. Understand that there is a learning curve that affects the organizations ability and performance when exporting to new markets. Calculate the time this will require, and it’s cost.

9. Write down and sign all agreements with the customer (dates, specifications, changes, time, everything). Verify everything with an email or fax if unable to physically sign the agreements and changes.

10. Use caution about exclusivity agreements. Everyone wants exclusivity, will that exclusivity support your entire export production? Will it limit your ability to grow?

11. Develop a quality control system throughout the company.

12. Never send poor quality products, especially in order to meet a shipping deadline.

13. Research the transportation, temperature and climatic conditions that the product will be subject to prior to arrival at the export destination.

14. Create an export price strategy. Know where you are going, and how you want to get there, your costs and required profit margins before you begin to quote prices.

15. Clearly define the costs of production and separate them from the costs of the sales required for exports. Give the sales department a base price to build upon, and make sure they clearly identify the costs related to sales and promotion in the export markets.

16. Always have at least 2 customers in the export market. This will provide protection and stability for your production and for the customers in the export market.

17. Customers who provide the research, development and design for the product may bring samples to you. Assist in the development and manufacture of the samples. Your production know-how (turning ideas into product) is fundamental and important for all involved.

18. Research and investigate fashion, trends and tendencies. In order to survive, you have to create, not pirate and copy.

19. Quality complaints and suggestions must be addressed and implemented immediately. This has to be part of the understanding of every worker, from production to sales to executive suite.

20. Discipline, planning and order. Production planning, raw material purchasing decisions, financing, infrastructure investment, human resources, sales and marketing all must be planned and coordinated, at all times.

Added Oct. 1, 2006 – Bonus legal reminder:  Know the law of the country to which you are exporting concerning:  retention of documents for litigation, product quality and manufacturing and product safety before you begin sales and shipping.  Understand your responsibility and liability for recalls, retrofitting, refunds or destruction of the product.  Learn about your legal responsibility and relationship with brokers, agents and distributors and your products.

Related Links

7 tips for doing business internationally

Maquila and Maquiladoras in Mexico

Why you should pay attention to free trade treaties

Mexico and international free trade treaties





Maquiladoras in Mexico

28 09 2006

An Internet search for the definition of the terms maquila and maquiladora will turn up quite a variety of ideas and interpretations.

The maquiladoras have created quite an emotional and political reaction on both sides of the US and Mexico border. They have been accused of stealing jobs from the US, promoting sub-standard working conditions, lowering wages, exploiting workers, and not contributing to the Mexican economy.

Despite the controversy, the maquiladoras are growing and thriving in Mexico. They offer attractive benefits to organizations that are seeking competitive production and assembly costs, skilled labor and Mexico’s proximity to the US market. Recently many transnational organizations that moved manufacturing operations to China in the 1990’s have moved back to Mexico due to cost and logistic advantages.

Maquila and Maquiladoras – definitions and activities

  • The term maquila comes from the Spanish term that refers to the portion paid (in grain, flour or oil) to a miller for milling a farmer’s grain.
  • Maquiladoras are legal entities under Mexican law, with special tax privileges, they provide service, assembly or manufacturing operations.
  • Maquiladoras are able to import raw materials or semi-processed materials from foreign countries, in order to service, process or assemble them in Mexico, and then export the finished product back to that country. These activities take place without the collection or payment of import, export or V.A.T. (value added tax) taxes.
  • The maquiladora program was created by Mexico in order for foreign organizations to take advantage of low labor costs in Mexico (primarily the USA), and to provide employment to Mexican workers in Mexico. Initially the maquila operations were located close to the US border. Currently maquila operations can be found throughout Mexico.
  • Maquiladoras can be 100% foreign owned, 100% Mexican owned, or a joint venture between Mexican nationals and foreign investors.
  • Maquiladoras are also known as twin plants, in-bond industries, export assembly plants and offshoring.
  • The maquiladoras in Mexico suffered from a crisis of plant closings in the 1990’s and early 2000’s as many companies moved operations to China. Since 2004, Mexico has seen a resurgence of the maquiladoras.

  • Check with your attorneys and accountants in Mexico about the specific benefits of the maquila program. As of September 2006, there were important legal changes (simplification and consolidation of government compliance and monitoring programs) that will affect current and future maquiladoras.

Related Links

Why you should pay attention to free trade treaties

Industrial and business parks in Mexico


Official government websites of the 32 Mexican states

Maquila and Maquiladoras in Mexico





Why you should pay attention to free trade treaties

27 09 2006

Globalization, transnational companies, global sourcing and outsourcing, free trade, do any of these terms sound familiar?

Obtaining products and raw materials for the lowest price possible is a fundamental concept in business. Today organizations are looking for manufacturers and locations worldwide where they can find lower costs of production in order to remain competitive.

Combine the factors of: quality control, low cost production, logistics costs, and the time involved to get the product to market from the factory, and you understand the challenge of doing business and sourcing products in today’s global economy.

To truly determine the final cost of the product, all these factors must be calculated. This will determine which country offers the best competitive advantage. Make sure you are analyzing any existing free trade agreements when you are seeking suppliers globally.

Free trade treaties between countries have a significant impact upon the final cost of goods. These free trade agreements eliminate the tariffs and taxes on imported and exported goods between the countries involved, depending upon their concentration or percentage of “local” or national raw materials (including labor), as specified in the free trade agreement.

Free trade agreements between countries are of great importance and value only if are exclusive and not accepted by all trading countries. The more free trade is embraced by the international community (through treaties or elimination of import and export tariffs) the less impact the current free trade agreements have in determining competitive advantages for a single country.

Here is a simple example of how the NAFTA (North American Free Trade Agreement) free trade treaty between Mexico and the USA, would favor the US supplier over a Chinese supplier.

Example of free trade agreeement competitive advantage:

US supplier to Mexico. If I want to purchase paint made by a US paint manufacturer and have it shipped to my warehouse in Mexico, my total cost to bring the goods to my warehouse in Mexico would be the cost of the paint, plus freight and customs clearing costs. There is no import tariff on this product due to the NAFTA free trade treaty. It would take 4 – 6 days to arrive in my warehouse in Mexico once the product has been shipped from the USA.

US paint $ 20.00 + Freight $ 4.00 + Customs $ 1.00 = $ 25.00 total cost of the US product in my warehouse in Mexico

Chinese supplier to Mexico. If I purchase the same product, from the same transnational company, but it is manufactured in China. Transportation time is 40 days from date product is shipped from China.

Chinese paint $14.00 + Freight $ 8.00 + Customs $ 1.00 + Import tariff (13% of CIF value) $ 2.86 = USD $ 25.86, total cost of the Chinese product in my warehouse in Mexico.

In this example the final cost of the product is $ .86 lower from the US supplier as compared to the Chinese supplier, despite a lower initial product cost. Factor in the financial cost and time required to move the product from the factory to my warehouse, and the lowest final cost in this case would clearly come from purchasing product from the US supplier.

Mexico’s aggressive free trade strategy

Since the 1990’s Mexico has bet heavily on international free trade agreements as a method to improve their competitive advantage and increase their manufacturing base and attract foreign investment.

Mexico has signed 11 existing free trade treaties and 2 complementary economic agreements with 42 countries. It is the only country in the world to have standing free trade agreements with North American and the European community.
The free trade agreements have greatly increased international competition (imports) in Mexico (good for the consumer).

Free trade agreements have allowed Mexican exports to increase and reach destinations and markets that were closed before due to tariffs and costs. There has been increased foreign investment from countries that desired to use Mexico’s free trade competitive advantage for international manufacturing and export projects.

The Mexican manufacturers and suppliers of the national Mexican market were given a “sink or swim” option. Virtually overnight (many of the treaties were phased in over a period of 3 – 10 years), their previous protected market was filled with imported goods (more competition, lower cost, higher quality).

Those that have survived the “invasion”, have had to improve their efficiency, quality and costs. Making them much more competitive in todays global economy.

Britannica’s Definition of free trade:

“Policy in which a government does not discriminate against imports or interfere with exports. A free-trade policy does not necessarily imply that the government abandons all control and taxation of imports and exports, but rather that it refrains from actions specifically designed to hinder international trade, such as tariff barriers, currency restrictions, and import quotas. The theoretical case for free trade is based on Adam Smith’s argument that the division of labour among countries leads to specialization, greater efficiency, and higher aggregate production. The way to foster such a division of labour, Smith believed, is to allow nations to make and sell whatever products can compete successfully in an international market.”

Related Links

Mexico and international free trade agreements





World Bank report – Doing Business in Mexico

23 09 2006

The World Bank has an on-line report available entitled “Doing Business in Mexico“. The study was published in December of 2005.

“Cosponsored by COFEMER, USAID, and the World Bank Group, Doing Business in Mexico is the first state-level report of the Doing Business series in Latin America. This report investigates the scope and manner of regulations that enhance business activity and those that constrain it.

The report covers the following thirteen Mexican cities and four areas of regulation: Starting a business, Registering property, obtaining credit and enforcing a contract.”

“When compared, Mexico City and the 12 other cities differ dramatically on the four indicators the report measures. “

The cities and regulations analyzed include: Aguascalientes, Celaya, Ciudad Juarez, Guadalajara, Monterrey, Veracruz, Merida, San Luis Potosi, Torreon, Mexico City, Tlalnepantla, Puebla, and Queretaro.

Of special note is the following comment. “The report concludes that reform is sorely needed. Much of the opportunity for improvement is in local administrative procedures, which can be changed by a governor or a mayor.”

This is very important. A governor or local mayor can make an important difference on the ease of setting up and doing business in Mexico. Seek out those states and cities with pro-active leadership. Find those areas that are investing heavily in infrastructure or have a dynamic policy focused on foreign investment and economic development.

Related Links

Doing Business in Mexico – World Bank

Doing Business in Mexico (PDF)

Press Release (PDF)





Industrial and Business Parks in Mexico

20 09 2006

Looking for a “plug and play” solution for your business or factory in Mexico? Take a hard look at the advantages that Mexican industrial parks offer.

AMPIP (Mexican Association of Business and Industrial Parks) can partner with you and provide contacts and information about Mexico’s industrial and business parks. They work closely with private industry, state and local governments and real estate organizations in order to provide solutions for companies seeking to quickly and easily establish a physical presence in Mexico.

“Investment Promotion
AMPIP has become one of Mexico’s leading agencies for the promotion of foreign investment projects, thanks to its participation in national and international shows, the advertising in specialized media, the alliance with other business associations and the permanent contact with a wide network of corporations and real estate players, as well as with government officials.

Part of the promotion activities include the registration of industrial assets owned by AMPIP members in our Industrial Real Estate Promotion System, available on-line at our Internet site, apart from the printed material, such as location maps edited in conjunction with the Mexican Bank for Foreign Trade (Bancomext), which are distributed worldwide.”

There are specific and unique advantages of industrial and business parks. Saving time and money are among the biggest factors. Access to transportation, power and communication infrastructure is another. The definition of “Industrial Park” will provide some idea of the other advantages.

“What is an Industrial Park?

An industrial park is a delimited extension of land, characterized by four main aspects:

1. It is located close to transport facilities, such as hightways, airports, sea ports and railways.

2. It concentrates essential dedicated infrastructure in one location for industrial operations, such as water (including sewer lines, drainage systems), electricity (including high power supply lines), telecommunications and roads.

3. It fulfills all the prerequisites to obtain the permission from local authorities for the set up of new operations (construction, environment, etc.)

4. It has a central administration that coordinates the internal safety of assets, the maintenance of public infrastructure, the promotion of new operations and the affairs with local authorities”

For more detailed information, contact: Associacion Mexicana de Parques Industriales, Monte Camerùn 54 – 1, Colonia Lomas de Barrilaco, C.P. 11010, Delegacion Miguel Hidalgo, Mèxico D.F., Mexico Tel. +52 (55) 2623-2216 Fax +52 (55) 2623-2218 Email ampip@ampip.org.mx

Related Links

AMPIP Mexican Association of Business and Industrial Parks

Official Government websites of the 32 Mexican states

How to do business in Mexico

How to negotiate with Mexican business people

Mexican official (and unofficial) holidays

Tip: How to call Mexico from the US

What to dial in order to reach a cellular phone in Mexico

Advice on what to expect when doing business with Mexico

Meeting people in Mexico – kiss, shake hands or hug?

Before you go on your business trip to Mexico

Tipping Guidelines for Mexico





Mexico and international free trade treaties

19 09 2006

Mexico has signed 11 international free trade treaties and 2 complimentary economic agreements since 1993.

Mexico is the only country in the world with active free-trade treaties that cover North American and the entire European Community.

These free trade agreements have made Mexico highly competitive in terms of manufacturing for export to world markets, for the importation of raw materials for manufacturing and for the import of consumer goods for sale in Mexico.

The free trade agreements currently in place include:

  • TLCAN – Includes Mexico, USA and Canada – Initiated January 1, 1994 (NAFTA in English)
  • TLC-G3 – Includes Mexico, Colombia and Venezuela – Initiated January 1, 1995
  • TLC Mexico-Costa Rica – Includes Mexico and Costa Rica – Initiated January 1, 1995
  • TLC Mexico – Bolivia – Includes Mexico and Bolivia – Initiated January 1, 1995
  • TLC Mexico – Nicaragua – Includes Mexico and Nicaragua – Initiated July 1, 1998
  • TLC Mexico – Chile – Includes Mexico and Chile – Initiated August 1, 1999
  • TLCUEM – Includes Mexico and the European Union (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, United Kingdom, Cypress, Czech Republic, Estonia, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia) – Initiated July 1, 2000.
  • TLC Mexico – Israel – Includes Mexico and Israel – Initiated July 1, 2000
  • TLC Mexico – TN – Includes Mexico, El Salvador, Guatemala and Honduras – Initiated on March 15, 2001 with El Salvador and Guatemala and June 1, 2001 with Honduras
  • TLC Mexico – AELC – Includes Mexico, Iceland, Norway, Liechtenstein and Switzerland – Initiated July 1, 2001
  • TLC Mexico – Uruguay – Includes Mexico and Uruguay – Initiated in July 15, 2004
  • AAE Mexico – Japan – Includes Mexico and Japan – Initiated April 1, 2005

In addition there are Complementary Economic Agreements (ACE’s) in place with Brazil and Argentina.

Related Links 

Why you should pay attention to free trade treaties 





Business in Mexico, conversation themes

15 09 2006

When going to Mexico for business, be prepared for conversations. Mexicans are social people. They love to gather in groups and socialize. You can be assured of plenty of conversations during your visit.

Most business meetings and business dinners will involve a great deal of conversation of off-topic ideas before getting to business. Your ability to participate and keep the conversation moving is an important part of creating trust and the bonds required for doing business successfully in Mexico.

What topics are of general interest in Mexico?

Be cautious about introducing your personal opinions about politics and religion. Asking others to explain the current situation, so that you can understand it, is a safe way to venture into themes related to politics and economics.

Currently (September 2006) the following themes are sure to provoke conversations, discussions and opinions when in Mexico.

  • The recent Mexican presidential elections. Predictions for the future, scenarios, how it will might affect business and Mexico.
  • Your industry or business sector. Any international or national news, information, gossip, trends or tendencies related to your business sector.
  • Infrastructure projects in the city or state where you are visiting
  • China and it’s impact on the Mexican economy
  • Children and family
  • News or current events that can be found on the front page of the local or national newspaper
  • Recommendations on when and where to vacation in Mexico

Related Links

Create great international relationships

Advice on what to expect when doing business with Mexico





Cultural misunderstanding, it can happen to you.

15 09 2006

When we think of industry leaders in marketing and branding, Disney comes to mind. Geniuses in promoting their brand. Magnificent marketers. Leaders in the theme park industry. Universally recognized brand.

What could possibly go wrong with their expansion into Hong Kong and the Asian-Pacific market? Cultural misunderstanding.

Expansion into international markets and working with other cultures has created unforeseen headaches and problems for Disney once again. Disneyland struggles in Hong Kong

This is not the first time Disney has encountered cultural problems in international projects. EuroDisney also suffered from problems related to culture and customs that were not predicted or not taken seriously.

Disney is not alone. Virtually all organizations seeking to export and participate in international markets face steep learning curves about culture, customs and manners. Mistakes are made, at times very costly mistakes.

The lesson to be learned is to spend the time and money to understand your international markets and the culture where you will be doing business. It’s not enough to understand your brand and current customers. Never underestimate any cultural factor, and never assume that your model, project or way of life will be embraced fully and without reservations.

Related Links

Create great international business relationships

Stereotypes and global business





Doing it for the money?

11 09 2006

I was watching the movie Risky Business and the following quotation jumped out at me.

“Do you want to do anything meaningful, or are you only in it for the money”.

It appears that others are thinking about exactly the same thing. Take a look at Doing it for Free.





Stereotypes and global business

8 09 2006

A stereotype is defined as an unvarying form or pattern, specifically a fixed or conventional notion or conception of a person, group, idea, etc., held by a number of people and allows for no individuality or critical judgement. (Webster’s New World Dictionary, 1998)

Stereotypes are representative of a society’s collective knowledge of customs, myths, religion, ideas and sciences (McCrea,Stangor and Hewstone)

Working with global clients and international cultures provides the opportunity to breakdown and destroy existing stereotypes. Global business encourages and forces a confrontation of cultures and preconceived ideas.

Successful international trade and business is all about marketing. Marketing your product, yourself, the organization, your country and customs. Changing fixed and conventional notions and beliefs.

Interactions with other countries and cultures will be successful when we create an atmosphere of trust, build enthusiasm and excitement, and project an image of the organization or product that appeals to, and will be embraced by the client.

In essence, we are breaking the old stereotypes and helping to create new ones.

Related Link

International business traveller – ambassador, explorer, map-maker

7 tips for doing business internationally





Top 4 growth industries in Mexico

7 09 2006

I’m often asked what opportunities are available in Mexico. My answer is always the same. Mexico has enormous potential and many opportunities for business.

A better question is “what do you want to sell or invest in”? Without a doubt you will find that Mexico is a receptive market.

Here is my list of the top 4 industries and areas with great growth potential in Mexico.

The top 4 growth industries in Mexico

Construction – You name it and it will be built in Mexico in the coming years. Mega-infrastructure projects (electric plants, hydroelectric dams, highways, airports, marinas and ports, petroleum extraction), commercial, industrial and office construction and residential projects can be found in abundance throughout the country.

Tourism – Big push to develop tourism from the Federal, State and local governments. Tourism is a priority item on government agendas including: high-end hotels and resorts, sports and eco-tourism, business and professional events. Mexico has perfect weather, incredible rich history, open and accessible culture, thousands of miles of beaches, deserts and jungle, and easy access to the USA and Canada.

Medical and Pharmaceutical – Another government priority. Emphasis on preventative medicine and improving the quality of life provides rich areas of opportunity. The demographics in Mexico show that the market is growing and will continue to do so.

Security – This industry will remain strong and show exceptional growth in the future. There is strong demand by private industry, government, telecomunications and computer-related activities, the financial industry, international commerce, and the transportation industry to name but a few.





Advice on what to expect when doing business with Mexico

4 09 2006

Advice on what to expect when doing business with Mexico and Mexicans.

1. It is difficult to reach the top executives and business owners. The first contacts are difficult or impossible to make through “cold calling”. A much better strategy is to get personal introductions from consultants or other local business people.

2. Mexico is all about personal networks. They prefer to do business “face to face”. Impersonal methods of communication will be used, but plan on meeting your clients or suppliers as often as possible in order to maintain good relations and communications.

2. Use metric measurements, forget all other systems. Inches, pounds, feet, yards are not part of the Mexican culture. This is especially true for your promotional material and catalogues.

3. Don’t expect business people will return your phone calls. If the business item is important you should call several times.

4. Business negotiations will always be preceded with small talk and light conversation. This may continue for some time before business is finally discussed. Dinners and lunches are important for negotiations and often the items of real importance surface over coffee and dessert.

5. Proper etiquette and manners are very important. You will find the Mexicans are very cordial and polite, and they expect the same treatment from others. This is true for business and social occasions.

6. Secretaries and personal assistants are very important. They control who has access to executives and decision-makers. Many times they are responsible for answering the executive’s email and correspondence. Never underestimate the power of the secretary, and always maintain a friendly cordial relationship with them.

7. Meetings don’t start, or end on time. Don’t come late, but don’t get angry or upset when it doesn’t happen at the appointed hour.

8. The entire country shuts down from December 15 until about January 3 for vacations. Do not expect to find decision-makers in their offices, and expect slowdowns in logistics, paperwork and other communications during this time.

9. Everyone has a cellular phone. Get the cellular phone numbers of your contacts to avoid the filters in place at the office.

10. Mexicans tend to be reserved with foreign business people in the first business encounters. Business in Mexico is based upon trust between people. Take the time to create a relationship and build trust with your clients and suppliers. Don’t be in a hurry to close the deal. Don’t be in a rush to get the business over with. Don’t be afraid to visit several times without a specific work agenda. Get to know the people and culture.

11. Mexicans don’t like to disappoint others, and may prolong and delay bad news until the last possible moment. This can be prevented by establishing many short term objectives and chronologies. Constant open communication will also provide opportunities to discuss and find solutions for any set backs before it becomes a major problem.

12. Always try and deal with the boss or top executives. Business is done, approved and maintained by the top levels in the organization. Make sure the Mexican company understands that you are your company’s top executive with important decision-making powers.

Related Links

How to negotiate with Mexican business people

Meeting people in Mexico -kiss, shake hands or hug

Before you go on your business trip to Mexico

Tip: How to call Mexico from the US

How to do business in Mexico, parts 1 – 28