Coe Expansion to Mexico

Coe Expansion to Mexico

The United States and Mexico are neighboring countries that have diverse cultures, practices, and customs. Such differences pose a challenge for Coe and other business entities intending to tap into the large Mexican market. Most cultural practices in Mexico are rooted deeply in its history, religion, and strong beliefs (Minkov & Hofstede, 2011). Contrastingly, the culture in the United States is enshrined in Western values guided by freedom of operation and the rule of law.

Cultural Differences

One of the most prevalent disparities likely to affect Coe’s business model is the language barrier. Given the scarcity of specialized workforce that can be absorbed once Coe’s subsidiaries are operational in Mexico, the management will be obliged to import white-collar human resource. It will take a significant amount of time for such imported staff to understand the Mexican language and establish appropriate communication channels with Coe’s customers (Stephens & Greer, 2005). New market entrants will possibly join in as Coe spend valuable time adapting to the new business environment. If this is the case, the ensuing stiff competition may threaten the business operation in Mexico and can result in cease of operation.

Specific Challenges

Mexican business environment is bureaucratic. Government intervention in business operations is rampant (Becke-Olsen et al., 2011). A company likes Coe, that has its own rules and regulation will find it hard to survive in such a highly regulated environment. In fact, the government aims at protecting the native companies from foreign firm’s stiff competition. Therefore, a proper understanding of Mexican business environment is imperative before Coe’s entry.

The presence of cultural differences between Mexico and the West pose numerous challenges to Coe’s expansion program. For instance, in Mexico, the use of public means of transport is more prevalent than private cars. This implies that an idea of private possession of the property is still new, especially in rural areas. Coe business, therefore, is likely to fail because it is ‘lease-to-own' firm. Additionally, Mexico has a relatively young population (compared to the United States) that has ownership priorities unfavorable to Coe operations.

Lack of clearly outlined trade union regulations in Mexico has resulted in a deplorable working environment. This is uncharacteristic to the United States where Coe is more accustomed. Unorthodox trade unions have severely damaged the relationship between the employees and employers of several forms hence poor business performance. Coe should be careful not to ruin the cordial relationship among the stakeholders by joining the Mexican business environment.

Capabilities and Assets

Coe should invest heavily in research and development (R&D) activities to understand the new environment. R&D is also important in understanding the needs of customers in Mexico thus saving on time and resources. Moreover, the firm has to acquire land properties in strategic locations and to set up housing facilities for lease products. Product promotion is important in creating awareness of new product and services to the customers (Steenkamp, 2001).  Further, the management should legally secure the necessary registrations, permits and licenses to ensure a smooth flow once operations commence. Forging relationships and cooperation with like-minded organizations and the local community is imperative in securing the Coe's future. Most importantly, the firm should source for a competent and qualified workforce with experience of sustaining start-ups.

In summary, top multinationals in the world today risked joining new business environment with a different cultural background (Cuervo-Cazurra, 2008). Their success stories should serve as an inspiration for Coe’s management to face the risks in Mexico wittingly for proper establishment of the company’s operations. Business failures in Puerto Rico should not instill fear, but should be a learning opportunity on how to avoid possible mishaps in Mexico.

References

Becker-Olsen, K. L., Taylor, C. R., Hill, R. P., & Yalcinkaya, G. (2011). A cross-cultural examination of corporate social responsibility marketing communications in Mexico and the United States: Strategies for global brands. Journal of International Marketing, 19(2), 30-44.

Becker-Olsen, K. L., Taylor, C. R., Hill, R. P., & Yalcinkaya, G. (2011). A cross-cultural examination of corporate social responsibility marketing communications in Mexico and the United States: Strategies for global brands. Journal of International Marketing, 19(2), 30-44.

Cuervo-Cazurra, A. (2008). The Multinationalization of Developing Country MNEs: The case of Multilatinas. Journal of International Management, 14(2), 138-154.

Minkov, M., & Hofstede, G. (2011). Is national culture a meaningful concept? Cultural values delineate homogeneous national clusters of in-country regions. Cross-Cultural Research, 1069397111427262.

Steenkamp, J. B. E. (2001). The role of National Culture in International Marketing Research. International Marketing Review, 18(1), 30-44.

Stephens, G. K., & Greer, C. R. (1995). Doing Business in Mexico: Understanding Cultural Differences. Organizational Dynamics, 24(1), 39-55.