Trade Mission to Colombia and Panama. May 13-16, 2013.

Latin America Economic Outlook. Courtesy of OECD.org

Latin America Economic Outlook. Courtesy of OECD.org

Colombia and Panama have a combined import business that exceeds $70 billion a year, primarily in the transportation, consumer products, and fuel industries.

The United States Department of Commerce is organizing a Trade Mission to Bogotá, Colombia and Panama City, Panama. Dates are May 13-16, 2013. This will be an executive-led mission, which will focus on helping U.S. companies launch or increase their export business in the promising sectors within the transportation infrastructure markets of these two countries. The mission will include business-to-business matchmaking appointments with local companies, as well as market briefings, and networking events.

In both Colombia and Panama the governments and private sector are investing some $30 billion in infrastructure projects. As a result, the mission will focus on export-ready U.S. firms in the following sectors: building products, construction equipment, electrical power systems, safety and security equipment, airport supplies, logistics and distribution solutions providers, port equipment, and intelligent transportation systems (ITS).

For more information, please contact Arica Young, (tel.) 202-482-6219 or (email) arica.young@trade.gov.

Export.gov – Trade Mission to Colombia and Panama.

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El Dorado: The Rebirth of the Mexican Economy

Coat of arms of Mexico. Español: Escudo Nacion...

Coat of arms of Mexico. (Photo credit: Wikipedia)

While the U.S. and European economies struggle to survive during 2013, the Mexican economy is expected to grow over 4% during the year. The continued grow of the country economy and business can be seen in the multinational expansion of the country companies from giants such as Telmex in telecommunications, and Cemex in construction materials, to companies like Fernandez Hinojosa Logistics in the supply chain and logistics business segment.

With over 100 million inhabitants, and an economy that exceeds $1.75 trillion, and unemployment below 5%, Mexico is not just one of the biggest economies in Latin America, but it holds the 12th place on a worldwide basis, and one that surprised many economists by growing faster than even Brazil’s during 2012. According to Forbes, the new president Enrique Peña Nieto, promised reforms that include “zero fiscal deficit, and reduced government operational spending”. The economic trend is even potentially making many citizens of la madre patria (Spain) to reconsider their employment and future opportunities, and some of them are starting to move to Mexico in search of new economic and social opportunities.

A mariachi band at the XIII Encuentro Internac...

The primary challenge that Mexico may be facing now is the perception of indiscriminate violence caused by the current drug cartel wars, as seen in popular news shows and newspapers worldwide. While this is true, I have visited Mexico over 30 times in the last 10 years and have still to witness or suffered a single violent act myself. I have friends all over, from Mexico City, Guadalajara and Monterrey, to Cancun, Cozumel, and many other places, and they are some of the most friendly and welcome people I have ever met. The country is on the mists of an economic development, and taking the necessary measures to improve the economy, reduce crime, and redirect the energies into the creation of a new beginning, and it welcomes entrepreneurs and established companies to participate on it.

English: A North American Free Trade Agreement...

Mexico is for an exporter or importer one of the best places to conduct your business. It currently holds FTA (free trade agreements) with over 40 different countries and it is one of the primary export/import partners with countries such as the U.S., Brazil, China and many others. Entrepreneurs are starting to take advantage of the country’s growing educated workforce, their solid business and communications infrastructure, and the newfound political and economic stability. If you are a U.S. entrepreneur looking for an opportunity to expand your business, Mexico should be one of the first ones to consider in your list.

Some additional Articles about Mexico and it’s economic development include:

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Venezuela Currency Devaluation: Risk and Opportunity.

500 Bolívares Front

500 Bolívares Front (Photo credit: abeckstrom)

How to convert $500 into $350..

While the failures of socialism and communism have been thoroughly documented, Venezuela announced a devaluation of their currency of 32% on Friday Feb 8th, 2013. In other words, if you had $100 on thursday, by friday you only had $68, an unwelcome surprise for any Venezuelan business or individuals that purchased goods on thursday in dollars and have to pay them on Friday. This from a country that has not seen their president in over 2 months (allegedly under treatment in Cuba), and a country with extensive natural resources in oil, and minerals. It seems that Bolivar dreams of the Grand Venezuela, have been utterly destroyed by the mismanagement and socialist practices of Cuban’s Dictator mini-me Hugo Chavez…

03 161691-chavez-castro-a-morales

As Cuba did in the past, Venezuela has engaged in nationalization policies, a disrespect for the democratic process, and a kingdom building strategy. The only thing missing from the Kingdom of Venezuela is the existence of a brother that could inherit the crown as it happened in Cuba just a few years ago. While as with many old european monarchies, the two brothers are similar, they still differ enough to make any forecasts difficult for companies attempting to determine if investing in either one, Venezuela and/or Cuba are worth the effort. The current devaluation of Venezuela has caused companies like Colgate-Palmolive, Avon, Procter & Gamble, and even Merck to restate their earnings from the country as their sales just lost 32% of their value. From a business standpoint, if they just had profit margins of 32% (after expenses) they just broke even.

Risk and Opportunity

Ying Yang

Ying Yang (Photo credit: Wikipedia)

As with any other calamity, individuals and business need to recognize that regardless of their own personal feelings, it is something that they need to deal with and adapt to the new realities. All business will be affected, and by extension all individuals will be severely affected by the currency devaluation since the measure affects not only their personal accounts, but the ability of the country to pay their international financial obligations with a severely devaluated currency. It even means that future growth could be slowed down, since it is easier to go down a 30%, but on the other hand that means that to recover they will need to revaluate their currency almost a 50% ( 32 = 47% of 68 ).. I know is a tricky math that the Venezuelan politicians will not like their own people to think about while they prepare their exit plan.

Opportunities

Any international currency fluctuations can create opportunities for the right investors, and as with any other business it only depends on the calculated value of the risk to be taken. The current devaluation of the Venezuelan Bolivar can open opportunities for their business and international investors willing to take a risk on the future of the country. Some of the easily identifiable opportunities are:

  • Luxury Residence in Costa RicaInvestments in Real Estate: Just think about it, if you were purchasing real estate in Venezuela today the house or condominium that you were going to purchase is suddenly 32% cheaper
  • Import/Export: Today Venezuelan companies could export their products at the same price and have an additional 32% profits, or they could just reduce their prices by the same 32% and substantially increase their sales. Good news for the well known Venezuela health and beauty, agriculture, and confections industries.
  • Outsourcing: Do you need a call center, do you need manufacturing operations, do you need consulting? If so your Venezuelan workforce just became 32% cheaper, and you could outsource your work to their local companies at a substantial discount (will any other of your providers give you a sudden 32% discount today, if not, then consider other providers).

In business there are no guarantees but import/export or international investment companies could take advantage of this measure, in order to increase their competitiveness and potentially move ahead of their competition. But of course, there are associated risks that need to be considered.

Risk(s)

Currency devaluations are a difficult trend to forecast, and the loss of 32% of their income can make the current social and political situation in Venezuela even more volatile and risky for international investors, and local companies alike. Some of the clearly identifiable risks are:

  • U.S. DollarSocial instability: Would you be happier loosing 32% of your income overnight, or would a country be happy suddenly getting a 32% unemployment figure? That is the unexpected consequence of the currency devaluation, and it could cause additional violence, strikes, and many other social challenges to the government and the country in general.
  • Financial Risk: Doing business in or with companies from Venezuela increases the financial liability for an individual investor or an import/export company since there is an additional risk for bankruptcies, or simply inability to pay for previously contracted products and services.

Even if many people consider that the financial risk is the biggest one, I will argue that the actual social instability risk is a more concerning trend for everyone, and the one that needs to be carefully considered by any international investor or import/export companies. If there are any questions about that, just remember that in a neighboring country (Cuba) social unrest culminated with a monarchy that has taken over the country for more than 50 years, and that resulted in the nationalization of all industries and business, and the destruction of the economic model that had the country at the time way ahead financially, economically, and socially than countries like Taiwan and Singapore.

The financial risks of conducting business in a country like Venezuela are not avoidable, but manageable, and a topic that will be covered in a future article. Please join us if you will like to be within the first to learn some of the potential financial tools that you can use to reduce the financial risks of the import/export business, or those of an international investor.

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American Airlines – US Airlines Merger: Valentine’s Day Gift for Passengers?

As I checked my email today, I was touch that the president of one of the biggest corporations in the world remember to send me an email in the day of San Valentine…

” Subject: A Message from Tom Horton: AMR-US Airways Merger.. Dear Jorge AAdvantage Number XYZ0000 Today is a historic day as American Airlines and US Airways announce plans to create the new American Airlines….”

Boston Globe / Refresh Review

Then I realized that it was just a corporate email announcing that two struggling companies were joining together to see if they could become a winning organization, and as you can imagine my enthusiasm quickly declined since I could not really understand what does it means really for us, the passengers that actually use their services. Does this means that suddenly their planes will take off in a timely matter, or that they will improve the quality of the peanuts and flat cola that they serve, or that the seats will actually become comfortable with more leg space and recline? Somehow I doubt that their merge has anything to do with any of my actual needs as a customer, and a lot to do with their needs as CXOs to keep their jobs, and enjoy their salaries, benefits, and guaranteed first class tickets.

Don’t take me wrong, I fully understand that mergers are actually in some cases a welcome shot in the arm for some companies, and that in some cases they could result in better products and services for the consumers but if we look at the history of mergers and acquisitions, that generally is not the case:

  • The merge of Novell and WordPerfect – FAILURE
  • The merge of AOL and Time Warner – FAILURE
  • The merge of ATT & NCR – FAILURE
  • The merge of Daimler and Chrysler – FAILURE
  • The merge of Pennsylvania and New York Central railroads FAILURE

There are some reasons when a merge makes absolute sense, and for those CXOs attempting to increase their compensations by talking merger, here are some rules that should be kept into consideration:

Mergers and Aquisitions. Courtesy of stillad.com

Mergers and Aquisitions. Courtesy of stillad.com

A merger is a addition operation not a multiplication:In other words from basic math, it should look like (+ and + ) not a ( + and – ) or ( – and – ).. Two negative numbers together do not make a positive

  • A merger will not increase intelligence or capabilities: To explain “1″ the merge of two second class companies does not suddenly creates a first class operation, it only gives the CXO’s a bigger platform to make mistakes
  • A merger will not magically fix problems: If the only objective is to save costs and improve efficiencies, the only potential way to do it is to actually go and fire redundant employee positions, and consolidate operations where it makes sense (basically you still keep the same problems, just merge them together and have less resources to fix them).

So what is my opinion about this merge:

 

  • Quick reduction in available flights, routes, and capabilities.
  • Quick increase in prices now that there will be less competing companies in the market.
  • Less incentives for the companies to actually improve in the long run since they will be focused on the short-term problems created by the merge.

I may be wrong (and I actually hope I am) but if we follow history, most of these massive mergers fail for the same reason the original companies were failing. Joining together two failing companies does not makes a winning one. What do you think?

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Small Business in Costa Rica affected by the Economy, Credit Card, and Logistics challenges

As it happened before in the U.S. and Europe, the ticos (as the people from Costa Rica are called) have started to reduce their consumption levels and this is raising some concerns about the country’s economic future. Between the increase in credit card interest rates, a reduction in the import trade figures, and the current increases in the current debt level, the country could find itself in a period of transition that could further challenge small business and individual employment in the short term.

CR - credit cards news-co-crTwo of the primary factors that could substantially affect the small business are the lack of a proper logistics infrastructure, and the current trend in credit card utilization changes. The lack of a properly developed logistics infrastructure in a country with a relatively small but highly diverse geographical area could be responsible for up to a 26% cost increase for small business, increasing their operational costs and reducing their competitiveness in the market. Just in transportation over 46% of the cost of transportation is due to the need to cover the empty returns of the delivery trucks and vans to the point of origin. In addition credit cards used only by 30% of the population and other consumer credits have increased their rates to more than 18%, further affecting the purchasing power of individuals and small business alike.

CR call-centerFor individuals, the economic challenges could further increase their abilities to find employment due to the cost increases for the small business, and the increased competitiveness in the local labor market. Call centers, once the staple of success for the middle class in Costa Rica, are increasing their requirements for the new applicants, and a good knowledge of english is no longer enough to guarantee a long term career. 

While none of these changes by themselves should substantially affect the current economic perspectives of the Central America nation, they could be the heralds of further economic challenges in the near future. In order to increase their competitiveness the country needs to invest heavily in the development of a solid logistics infrastructure that will allow the local industries as well as foreign investors to expand their operations from the capital San Jose, to the rest of the country. This could help diversify both the employment opportunities as well as the investment opportunities to other areas of the nation, helping improve salaries, launch new small and medium business, and even increase overall real estate values in other areas of the country.

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Ticos moderan el ritmo de sus compras – ECONOMÍA – La Nación.

Tarjetas de credito se afianzan a la vida de los ticos – La Nación.

Productores pequeños pierden por doble costo en logística-La Nación.

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The customer is NOT always right: But you better ask the right questions..

English: Cutaway drawing, illustration of an i...

Cutaway drawing, illustration of an inkjet printer (Photo credit: Wikipedia)

This is one of the articles born of my own personal experience with the customer service of what I consider one of the best companies in the computer industry HP. To make a long story (over one hour) short after spending over one hour attempting to set up an inkjet printer and over 25 minutes in the phone with their customer service, I decided to return the printer and buy a competitor. While I don’t still know if the competitor printer will work as I expected, the inability of HP’s CS team to properly answer my questions and address my concerns make me decide to change brands. In my opinion if they can’t help me with a basic setup (the printer hardware was stuck and will not even complete the boot cycle), how can I expect them to help me later if I have a real problem.

Now before all I want to recognize that I have worked with HP for over 20 years (pretty much since they got into the personal computer business).. I have sold and supported their computers, printers, hubs, switches, and pretty much any product that they have made for the PC industry. I have also outsourced IT field services to HP in over 25 countries and during all my experience the company, its products, and its people have always been at the top of the game. It is one of the few companies that I can today still trust to do business with a handshake and trust that they will always be there for you and your customers.

Assessing how Indian farmers manage climate an...

That’s one of the main reasons why I was so surprised with my call to their CS team today when their first line support person seem to be only interested in obtaining the necessary product registration information (my name, phone number, where did I purchase the product) before even asking me what was the nature of the problem. After that once we finally got to start the troubleshooting her only suggestion was to turn off the printer and restart it.. After I did (and then confirmed that I had done the same 4 times already) she just put me on hold to ask her supervisor what to do next… And her suggestion.. well, just replace the printer..

So going back to the title of the article, I am sure that I am not always right, but I expect the person on the other side of the interaction to buy into the issue and find me the right answer (not just an answer to get me off the phone and clock in the next call). As part of my professional experience I have served in multiple roles in the international IT industry, and have seen customers at their best, but also at their worst; and I have never seen a problem being solved by ignoring it, or by bullying the customer, or the employee (if you are a manager) to give you the answers you want just because.

One of my preferred customers from our lovely city of NY used to call and ask for one of my support buddies (EF), or me, and her calling card was “tell them that it is The Bi..h calling, that I need them to call me back”.. The fun part is that while that scared off many tech support engineers we knew that she was actually a really nice (but businesslike) lady, that was just tired of support people that had no clue about how to truly solve a problem; and that will waste her time in the phone by asking unnecessary questions and not really looking to solve the issue.

Telecom tower

Telecom tower (Photo credit: nicolasnova)

Another of my preferred customers a very large telecommunications provider always had unreasonable demands, and terrorized his account team based on the fact that their purchases were usually over 30% of the territory quota any year. Based on that they just ran over the account team and got pretty much their wish every time. To that customer once I had to tell them that we (the company I used to work for at the time) were as big as they were, so when I say no was not based on the lack of resources, but just that what they wanted was not right. I give that VP my business card and told him that if they had a true emergency I will lease a plane if needed to get the equipment and products anywhere, any time, BUT that if he called me everyday for small stuff I was going to send him a bill for services since he knew that emergencies didn’t happen every day. I’m glad to say that in five (5) years I never hear from that VP at all :)..

So what do the two cases have in common, basically that I always asked the customers the tough questions needed to find out what their true problems were, and then solved their problems; and that in those same two years (each one in a different role and company) I was recognized in the first company as being “the best support engineer of the whole company” and in the second one as being Excellent (basically the top 5% or less of all employees).

While the customer is important, here are some reasons why they are not always right:

  • Customers are not really sure what they really need or want
  • If a customer does not know the answers, they make it up
  • Customer expectations are not always rational

In addition to the previous reasons, we need to remember that customers must be defined above and beyond those individuals or companies that purchase products and/or services from our company. Customers are all individuals and organizations that receive products or services from us. As it happens in supply chain a customer chain could include:

Export Process. Courtesy of speedycargo.com

Export Process. Courtesy of speedycargo.com

a) End users that purchase products and/or services from your company are customers of your company

b) The company employees are the customers of the company HR department

c) The company is the customer of their own materials or OEM product suppliers

d) The OEM manufacturers are the customer of the raw materials suppliers

e) The raw material suppliers are the customers of the transportation and financial industry suppliers

f) And so on and so forth..

Asking the right questions and providing the customers with the right answer, will not only help your customer, but also if consistently done will help your company and yourself professionally. In a time where ethics is not being taught anymore in business schools, we suffer from one crisis after another, and we see companies like Enron, Nortel, and recently too many financial institutions to even list here, an ethical and  consistent answer is not only rare to find, but priced by customers all over.

Courtesy of psmag.com

Courtesy of psmag.com

In one case I remember one regional sales person calling me and telling me that his customer didn’t want to sign a multimillion dollar contract just because they were not happy and concerned with the quality of the service. Since I was the regional operations and service manager, and had been this specific customer consultant engineer before I asked the salesperson to tell the customer´s VP that they had my cell phone number from before, and that I was still the regional manager. That if they had any questions they could call me directly,  and was done with the call. After a few days I decided to call back the salesperson to follow up on the contract issue and his answer was “once the customer hear my message, they just signed the contract right away”, that they knew that I would be there for them if needed. That was one of the sweetest moments in my professional life, the fact that after more than 5 years the customer still trusted my word enough to sign on without even having to call me to verify it.

For those of you that conduct your business in the international arena, you must remember that in addition to all of the classical issues related to customer service, you will encounter the additional challenges associated with different cultural expectations, extended logistics chains, international monetary transactions, different laws, and even changing customs and government regulations. Join us and stay tuned for a future article dealing directly with the issue of selling overseas. Copyright © Inloso, 2013.Creative Commons License

The Customer Is Always Right – This Minute.

The Customer Is Not Always Right, But They Do Have All the Answers – Forbes.com

3 Reasons Why the Customer Isn’t Always Right - Forbes.com

Who Owns Your Customer Relationships: Your Salespeople or Your Company? – Uvacustomervalue.com

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Brazil Logistics and Supply Chain Summit: May 20-21, 2013

If you are interested in learning about the latest trends in the Latin America supply chain business segment then you must attend The Supply Chain and Logistics Brazil Summit, in Sao Paulo, Brazil May 20-21.

Brazil Waterfall

Brazil Waterfall (Photo credit: @Doug88888)

The event will be focused on the supply chain strategies of the future and discusses the tools and techniques to successfully respond to new Brazilian consumer demands, infrastructure investment and development amidst exponential economic growth and massive opportunity in the region.

Some of the primary business segments expected to be represented include:

  • Agricultural
  • Automotive
  • Logistics and Transportation
  • Oil and Gas

The Supply Chain & Logistics Brazil Summit provides the most lucrative opportunities for business success and the know how to successfully succeed in the region’s most dynamic and lucrative market. By participating in the event you will have the opportunity to:

Brazil: Muriqui Hills

Brazil: Muriqui Hills (Photo credit: Rhys Asplundh)

Develop the supply chains to cater for new consumers demands

  • Successfully segment and align supply chain design with consumers and market needs
  • Update yourself on Olympic and World Cup infrastructure developments and investment
  • Achieve global competitiveness
  • Learn and implement the latest tax advantages and warehousing strategies
  • Improve supply chain collaboration by implementing holistic, integrative supply chain processes
  • Maximize your logistics and distribution strategies throughout the region
  • Build well balanced, flexible and adaptable distribution networks to serve both modern and traditional trade channels
  • Train and retain the next generation of supply chain leaders in Brazil
  • Implement successful forecasting programs for unpredictable markets

For additional information please visit:

 

Supply Chain e Logística Brasil Summit.

If you are interested in participating in the event, or already conduct business in Brazil, you can also take advantage of our Brazil Resources page  by going to our top drop down menu under the “resources” heading. There you could find companies that can help you meet your business needs in the country.

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