Latin American Experts Discuss Challenges, Benefits of Conducting Business in Region with Executive MBA Students
October 21, 2014
|Pictured: Mauricio Ortiz, vice president and general manager for the Americas, Boston Scientific.|
Participants in The Miami Executive MBA for the Americas program listened intently as Boston Scientific’s Mauricio Ortiz held up his iPhone to demonstrate how his company plans to infiltrate the Latin American health care market. They’ll be going directly to patients who need the company’s life-saving devices, a creative strategy devised to circumvent the increasing corruption there.
“They don’t have wealth, but they have debt and they have the latest iPhone,” said Ortiz, the company’s vice president and general manager for the Americas. “If we’re able to network through the insurance company, we can get through to patients. It’s a very ambitious project based on technology.”
This was one of many insights into the challenges and benefits of doing business in Latin America offered by Ortiz and fellow panelist John Price, managing director of Americas Market Intelligence. These two-hour discussions with leading executives are a key part of the program’s weekend residencies, which are held every eight weeks.
The positives of operating in Latin America today, both experts agreed, include the increase in middle class population and spending power. That, coupled with the recent expansion of health care coverage, has been good for business. “These people demand more services and health care, and they have the ability to pay,” Ortiz said.
One reason for this explosion in disposable income, Price said, is that Latin America is enjoying a demographic sweet spot now as families have transitioned from four children and one income to two children and two incomes. The region also is benefitting from its production and exportation of commodities like minerals and oil. “Its natural resources have always been its competitive edge,” Price explained. “The last decade has been very fortunate to Latin America.”
|Pictured: John Price, managing director, Americas Market Intelligence.|
But, Price warned, the demand for these commodities is decreasing just as supply from other regions is increasing. This, despite the fact that Latin Americans have become addicted consumers. “The atmosphere of consumer debt in Brazil and Chile has almost reached unsustainable levels,” Price said. “People are living beyond their means.”
This is why, Price said, Latin America must embrace reform, especially by investing in education to produce much-needed technicians and engineers. Even more important, he said, is the need to establish and maintain a rule of law.
“Latin America is a very creative place, but until you have a rule of law that protects entrepreneurs, they will get on a plane and go to California to develop an idea,” he said. “The reason we do business with a handshake in Latin America is that we need to get to know each other to make sure the other person is not going to jeopardize things because you don’t want to resort to the courts there.”
While Price sees this as the biggest obstacle to moving forward, Ortiz points to the ever-growing corruption, which he blames for his company’s difficulty in penetrating the market. “I have left a lot of negotiation tables saying this isn’t how we work,” he said. “A lot of companies aren’t concerned about saving lives.”