The LATAM Deferment

July 2024

Companies that operate efficiently in LATAM benefit from incremental revenues, access to Global 2000 companies, and develop a WW customer base.

Despite the opportunities in the LATAM marketplace and the rapid acceleration of technology adoption, companies delay doing business in LATAM. We call this postponement “the LATAM deferment,” a situation in which companies, instead of pursuing a parallel internationalization process, choose not to operate in the region.

This delay is explained by factors that can be grouped in two major categories:

  1. Investment decision that would benefit large and more stable markets:

    1. Evaluating investment of entering LATAM vs developed countries or regions.
    2. Comparing the small LATAM addressable market potential of LATAM vs other business alternatives.
    3. Applying a higher hurdle rate, either explicitly or implicitly, in the ROI calculation to factor in LATAM’s political climate and economic cycles.

  2. Region Complexity which is hard to manage through without the right expertise:

    1. Difficulty of planning and execution in a region with multiple languages, countries’ sizes, and business practices.
    2. Complexity of LATAM business regulations. Five of the ten countries with the most complex business governance in the world are from Latin America (TMF Group).
    3. Scarcity of qualified candidates to represent an IT vendor in the local market, resulting in a costly proposition.

LinkIT LATAM's business value proposition confronts head-on the LATAM deferment and offers their clients a unique approach to enter the LATAM market.