A Word of Caution
Despite the obvious market incentives, corporate stakeholders must understand the barriers and risks associated with entering Latin America. Political instability, corruption, and economic struggles pose barriers to entry. However, these factors are commonly overstated (and thus have the silver lining of discouraging competition). In recent years, Latin America has been working with Transparency International to increase accountability and decrease corruption in the healthcare sector.
The Springboard Approach
A common tactic is that of developing a beachhead in a country of relative perceived safety and stability. For example, Mexico has been proved to be a great starter country for the Latin American market. Personal relationships are everything: For example, a Utah investment fund, profiled in the article, got buy-in from high-profile business leaders in their target market. After establishing a foothold in Mexico, the firm relied on personal referrals to gradually expand into Brazil, Peru and other countries.
Finding a Good Distributor
Local partners understand their own markets and can offer invaluable advice. When looking for a local distributor “realize that a little bit of time upfront can save you a lot of time in the back end,” said Justin Lampropoulos during the 2016 Utah Global Forum. Lampropoulos recommended that companies perform a thorough evaluation of a potential distributor: Look at government records, interview their customers, and otherwise poke about to get a fair snapshot of general reliability and good character. “Realize that the customers buy from the distributor, not you,” he said.
Additionally, a local partner can help one navigate through the often-labyrinthine regulatory and compliance processes involved in international trade. A word of caution, however: An unscrupulous partner could wind up with full control by using their insider knowledge against you. Again, choosing a partner of character goes a long way, as does retaining an attorney versed in the complexities of international commercial law.
The Right Stuff
If price points, profit margins and other metrics are favorable, Latin America can be a great backyard of expansion for U.S. firms. Demand for high-tech, high quality medical technology is strong, and competition is often weak. Public health crises, unfortunately, appear poised to accelerate into the indefinite future, offering suppliers a nearly endless market for specific device classes.
Rachel Gaines collaborated on this article as part of an internship program through Brigham Young University, where she is majoring in Spanish and minoring in localization.