Selling into Latin America has been an extremely challenging venture for most offshore consumer product manufacturers.

Because Latin America comprises 18 distinct markets – each with its own political climate, cultural nuances, currency fluctuations, and other influential factors – the complexity and expense of operating in Latin America has proven to be prohibitive, even for major retailers.

In the book Redefining Global Strategy by Pankaj Ghemawat, these complicating factors are grouped into four categories, denoted by the CAGE acronym:

Cultural factors that impede the flow of business for offshore manufacturers in Latin America include language/dialect barriers, various ethnicities, religious differences, lack of trust, traditionalism, and regional insularity;

Administrative factors, such as importation issues, lack of common currency, political hostility, corruption, and weak institutions, are pervasive;

Geographic factors include not only distance but border issues, time zones, climates, disease environments, navigability, weak transportation and communication infrastructure, and high transport costs;

Economic factors include currency fluctuations, disparities in local purchasing power, availability of financial resources, and local pricing instability.

Historically, manufacturers have relied on outside, contracted entities such as national distributors to navigate this complex web of factors. While this is a viable route to the consumer, it is inherently risky and expensive for the manufacturer. Both the brand’s integrity and the manufacturer’s bottom line are constantly at risk.

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