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How to achieve a successful landing in Mexico
Wed, 03/06/2024 - 17:21

David González Natal

David González Natal
David González Natal

Socio y director general de la Región Norte de Latinoamérica en LLYC

Nearshoring is the buzzword in the Mexican business sector and a concept that we read and hear in almost any presentation or conversation, since there are many foreign companies that are arriving in Mexico for the first time or that are decisively increasing their presence with operations and investments to take advantage of the proximity of Mexico and preferential access to the largest and most developed market in the world, the United States.

A phenomenon that is already being translated into figures, since in 2023, for the first time in 21 years, the United States imported more goods from Mexico than from China, according to the United States Census Bureau. This report indicates that Mexican imports increased almost 5% compared to 2022, while Chinese imports fell up to 20% compared to the year.

However, it is not news to anyone that throughout North America we are living in uncertain and polarizing times, a compelling reason for these companies that are relocating to Mexico to be proactive in protecting their reputation and business during their arrival in the country, based on a data-driven strategy and knowledge of the national context in political, business and talent issues.

Nobody wants a bad neighbor to come to their community, city, or neighborhood, and it will be increasingly difficult for those companies with a bad reputation to obtain good financing, business partners, attract the best talent or maintain consumer preference. Therefore, some of the keys to pay attention to are the following:

- Specialized advice throughout the process. Having a good business plan with adequate financing, a solid brand and good products and services may not be enough for a company to successfully land in Mexico, if it does not have the correct advice. The support of a specialized team with knowledge of the local environment that reaches the institutions can make the difference between consolidating the investment and facing government refusal.

- The weight of reputation. The fact that a company that is about to venture into Mexico knows precisely its reputation and what consumers think of it, thanks to the analysis of the conversation using big data tools, can be very useful in building its equity story and how needs to present itself in this new market.

- Have a solid talent strategy. The main challenge of the labor market in Mexico for companies that are arriving in the country is finding and attracting key talent for the start and development of operations. Reason why a comprehensive strategy must be worked on around talent, from the development and positioning as a solid and aspirational employer brand that connects with the needs, interests and concerns of the candidates, as well as from a deep immersion in the labor market with knowledge not only of the regulations, laws, compensations, but of the very essence and Mexican culture.

- Effective communication. Poor communication can ruin the hard work behind any transaction. Whether due to ignorance of the peculiarities of the local market or by not considering the government narrative in the discourse, a company can set itself up for failure without even having arrived in the country with a poor communication strategy.

- Constant adaptation. Today's political, business and human capital context is very different from what we will have tomorrow or the following year, especially because it is an election year, so it is important that companies have an arrival strategy that is flexible enough to adapt to these constant changes.

- Proactive risk prevention. Finally, any investment carries risks, and relocating a company to Mexico is no different. Risk scenario manuals have become obsolete in the face of the speed and uncertainty of the current moment, which requires companies to know the probability of each one. of their risks in real time and execute strategies that mitigate their exposure.

The nearshoring phenomenon has led to significant growth of foreign companies in Mexico, but as we have seen the route to a successful arrival goes beyond a good business plan, a well-thought-out landing strategy can make the difference between consolidating investment and not doing it.