Thursday, October 7, 2010

Business Models For CALA Market Entry

Many companies operating profitably in North America and in EMEA assume that their products, in their current version, are suitable for the CALA market.
There are some companies that recognize that they might have to deliver product documentation in either Spanish or Portuguese. And some companies recognize that if the product requires post implementation support, they will make the necesary investment to meet this requirement but...only after the sale!.

The reasoning is that once the customer agrees to the transaction, then, and only then, the required investment will be made so as to minimize risk. Management in these companies is convinced that the CALA region should be developed organically, although their other markets were not.  

When a market is new and unknown to a company, this approach presumablymakes sense. Particularly since CALA has a reputation among sales and business development executives that business in the region is tricky, closing sales takes a long time and success can be uncertain.

Sales and business executives don't have to navigate blind the CALA currents and can insure the success of their market entry initiatives by considering these four basic factors:
  • Hire Experienced And New: A technology company's first instinct would be to hire a sales person with experience specific to the company's product line; perhaps from a competitor. The sales person would have current customer contacts and first hand knowledge of deals that can be closed quickly avoiding a long opportunity development effort. The truth is that potential customers in CALA would be reluctant to do business with a sales person after he/she switched hats overnight. Credibility is at stake and credibility is perhaps the most important criteria in the LatAm market. My recommendation is to hire a knowledgeable person who not only understands the tehnology but also buyers' purchasing process. Someone who is a new face for a new product! 
  • Don't Go It Alone: CALA customers demand assurances of capable and immediate post-sales support. A local partner can be an effective extension of the company's support team. another reason is that most purchasing contracts and country's fiscal requirements will invariable prove advantageous to in-country established vendors. In absence of a foreign subsidiary, the right local partner is the ideal complement.
  • Dividir Para Multiplicar: Which translated from Spanish means sharing to grow. A company wanting to succeed in CALA will do so through the loyalty from their local partners and must develop two solid and complementary value propositions: one for the end customer and also one for the in-country partner. Distributors are also being targeted by the competition! 
  • Invest In Pre-Sales Support: Hiring a bilingual sales person is a given but investing in equally diverse pre-sales support personnel is often second priority. While it is true that the in-country partner will eventually become the first line of support to the end customer, developing t he partner's expertise will take time. Furthermore, customers want to see and have direct access to the main vendor. With qualified pre-sales support one can immediately pursue opportunities wth the assurance that products will be represented fairly and accurately while providing on-the-job trainig for the partner.
A complete CALA market entry strategy requires more than these factors but these four are the absolute minimum necessary to succeed while minimizing the investment.

(If you are interested in a sample budget, please feel free to contact me and I can e-mail you a Excel file)

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