When it comes to analyzing the challenges of doing business in Mexico, one of the benefits you’ll find with the Mexican economy is its status as an emerging market. Countries with stable economies that are becoming more developed countries, like Mexico, offer a wide range of benefits for investors and businesses. If you’re wondering what the pros and cons of doing business in Mexico really are, we’ll help you make your decision by discussing five key advantages.
#1 Emerging Market First-Mover Opportunities
One huge benefit any company has when doing business with an emerging market, like the market economy currently present in Mexico, is the ability to get first-mover advantages. If your company is able to start doing business in Mexico’s emerging economy early on, you’ll be able to corner the market and make your business successful. You may even be able to make your brand the leading name in your industry. Being able to corner the market early and become one of the major brand names for your type of product or service will help benefit your business. Also, you’ll be able to build a bevy of partnerships early on.
#2 Boost Your Capital Potential
In an emerging market, you’ll get a lot of access to new capital, which can really help boost your place in the industry. As emerging economies become more developed, like what we are currently seeing in Mexico, there is an increase in available capital which businesses can grab to expand into the country. By taking advantage of the capital available in Mexico, a company can expand to a new country and also help boost product potential and availability, making the country a better place for everybody. If you’re currently involved in an industry that seems to have reached its maximum capital potential, expanding into an emerging market like Mexico can greatly boost your growth and income potential.
#3 Mexico’s Economy Has Remained Stable
Another huge advantage of doing business in Mexico is the stability of Mexico’s economy. While much of the world is still recovering from the 2008 recession, Mexico has stayed very stable since then, meaning there is plenty of economic investment potential as a result. Mexico’s banks are stable and diversified, so their economy was able to handle the recession well and continues to provide stability for investors. That current economic climate in Mexico seems to have the potential to last for many years, which makes Mexico a great place to invest in or expand your business into the country’s borders.
#4 A Familiar Cultural Relationship
Another benefit to doing business in Mexico is the fact that most Mexican consumers are very familiar with American brands and products, so Mexican culture is willing to accept American manufacturing. Thus, it’s easy for Americans to launch new businesses in Mexico, or expand their businesses into Mexico, because Mexicans won’t be shy about purchasing the products. Of course, that provides a huge advantage over some other countries, like China. If we were to consider the pros and cons of doing business in China, one disadvantage would be that many Chinese consumers wouldn’t recognize American products. However, in Mexico, American brands are already widely recognized and purchased.
#5 The Exchange Rate
Currently, the exchange rate between the United States dollar and the Mexican Peso actually makes it cheaper for U.S companies to set-up operations. One U.S. dollar is worth about 19 (January: 2018) Mexican pesos, when, traditionally, the peso was usually worth more. So capital coming from U.S. companies that invest in Mexico have a greater purchasing power, thus, lowering the cost of real estate, construction and equipment.
By Fernando Ortiz-Barbachano
CEO & Founder of Barbachano International (BIP) the Human Capital Solutions leader in Mexico, Latin America and the USA offering high impact executive search, executive coaching and outplacement. Directly and through our partners we have offices in Mexico, USA, Canada, Brazil, Argentina, Colombia, Chile, Peru, Uruguay, and Ecuador. Our corporate offices are in San Diego, California. For more information please visit: Barbachano International Executive Search Firm. Email: firstname.lastname@example.org. Phone: 619-427-2310.