Several Mexican companies such as Cinepolis, Grupo Bimbo, Grupo Industrial Lala, and Gruma have consolidated themselves in the US market. Their strategy to gain their spot and to significantly increase their income derived from operations in this country has been supported in a variety of ways by investing in capital and technology.
A series of strategic purchases of North American companies was a big part of their plan. For example, Lala bought Dairy Farmers of America and Grupo Bimbo bought Weston Foods, a baked goods manufacturer already established in the United States and Canada. This transaction catapulted Grupo Bimbo into one of The Leaders in the U.S. Baking Industry.
These Mexican giants expanded their portfolio acquiring US brands well-positioned in their market. This probably helped these companies to “dollarize” themselves. In Mexico, the mentioned companies have an impressive infrastructure for distribution and have incorporated technology for their massive demand and supply. Resources like this helped them enter the US market with an advantage.
Smaller companies have to rely on different strategies. For example, when the company KidZania was looking for where to install the first franchise of its children's entertainment center in the United States, they decided on North Texas because of the area's approachability. The closeness and similar backgrounds made the transition easier, and it was the demographic they needed: families with children that are in a good socio-economic position to buy tickets. From the experience, the chief of staff and business liaison for KidZania USA said that one of the key steps was to change the company's strategy, especially concerning marketing, because it is not the same audience.
Other small companies seem to agree that it is crucial to understand how different your audience will be when entering the US market. They also emphasize on learning the different tax and commerce laws when trying to transition. Getting the support of an accounting and tax consulting firm could make it or break it for many companies when it comes to getting the necessary documentation and permits to start operations in the United States.
If you are thinking of starting your journey to expand into the US market and don't know what strategy is best for you, Nepanoa can help. We accompany businesses through their US expansion efforts by providing strategic project management services, guidance, and company.
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