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Martha RIVERA; Silvia CACHO-ELIZONDO (2015)
Publisher: Faculty of Management National University of Political Studies and Public Administration
Journal: Management Dynamics in the Knowledge Economy
Languages: English
Types: Article
Subjects: Business, HF5001-6182
This paper explores how Mexican companies in different industries have achieved international expansion, while at the same time preserving local elements in executing their strategies. For this initial stage of research, the analysis focuses on two companies: a) Grupo Bimbo, the number one company in the bakery industry worldwide and b) KidZania, one of the world’s top indoor family entertainment centers. The research methodology is based on in-depth interviews with CEOs and key executives from the two companies done over a period of more than ten years. We have also used secondary data such as press releases and case studies. By contrasting their strategies and comparing them with those of other multinationals like Ford Motor Company and Santander Bank, we identified major issues that we condensed into 10 key insights. Understanding how these companies have struggled and succeeded in gaining international markets can help other companies tailor their own strategies. Our argument is that the typical simplified international expansion process is insufficient when companies need to compete in the global arena. Becoming an MNC implies handling an entire ecosystem: building local presence, establishing joint ventures or alliances with local companies, recruiting local talent, developing new business models, reshaping the value proposition, developing new brands or introducing traditional ones with a local flavor, and understanding the supply chain and routes to market. Therefore, a number of aspects have to be taken into consideration beyond just simply selecting a market. For certain companies in emerging markets, making the decision to grow internationally was not initially in their strategic vision, but economic liberalization in their home country and the threat of being purchased by an MNC from a developed country triggered the decision. There is a learning process in international expansion, and trial and error is common and useful. The challenge for companies after conquering new markets is how to successfully transfer the enhanced processes and new skills acquired to strengthen the whole organization, both locally and abroad.
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