International Strategic Rewards and Competitive Advantages Lure American Businesses to Mexico
There is certainly no doubt in everyone’s mind that Mexico has become a global phenomenon with an undeniable force to be reckon with. Mexico has a reputation of being an international leader — holding the status as the second largest export market and the third largest global trading partner. Today, there is a growing trend with more and more US companies expanding their business and strategically moving their headquarters to gain a competitive edge and their search for the best tech talent.
Amazon is the Power Player
Everyone knows that Amazon does everything in a very big way and even though Amazon is new to the Mexican market they are the only company to pull off a colossal project and open an enormous facility. One million square-foot warehouse near Mexico City—that means 15.4 football fields could fit into a 1 million-square-foot facility.
It’s mind boggling to see a facility of that massive proportion — tripling Amazon distribution space with the potential to reach 120 million. The new facility will hold more than 15 million products and allow the company to reach 1 million deliveries across Mexico with more than 3000 job opportunities. Amazon is currently the third-largest online retailer in Mexico. Mexico has two distribution centers with 500,000 square feet of space and is the home of more than 20 million people. Amazon recorded sales worth $253 million in Mexico and there are more plans to expand operations.
The decision to build another warehouse in Mexico City was Amazon’s idea of taking over the city’s ecommerce industry and further build its presence in Mexico. Today there are more than 115 full time open jobs available and the list is quite extensive from engineering, operations, software development, fulfillment, solutions architect, vm-ware, enterprise solutions, program, product and operations management.
Top Reasons Why American Companies Are Moving to Mexico
- Reduced Costs, Big Profitability
- Global Commerce
- Market Competition
- Very Low Wages
- High productivity, efficiency, tech talent and product quality
- Companies can create more products – without costing a lot of money and can rely on consistent results
- NAFTA (North American Free Trade Agreement) facilitates bringing goods into the U.S. duty free
- Cost effective for business using less resources (cost) to achieve the greatest product
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Mexico’s Global Economy at a Glance
Mexico dominates the global tech scene and as the technology culture mature in the region — the United States is leading the way in the technology sector. The largest media tech giants, venture capitalists and IT entrepreneurs are moving and expanding operations to its country in search of finding stability, growth opportunities and global prosperity.
Top 10 Fintech Companies in Mexico
- Kubo financiero
Mexican employees get paid twice a month — on the 1st and the 15th of the month. They have the same basic rights when it comes to standard hours, severance pay, health care and should be given safe and good working conditions. American companies are looking at profitability, do not hire Mexican workers directly but go through a staffing company and the benefits that are offered to these employees are significantly reduced.
American Companies are Looking at Cost Effectiveness Strategies:
- Strategic cost management
- Process automation
- Materials management techniques
- Labor infrastructure – Cross Training
Today, Mexico is one of the fastest growing economies in Latin America and the leader in the development of science and technology programs. Mexican employees produce the same product as their American counterpart but at lower wages and still deliver the highest product quality, proficiency, and competence and the quantity can be produced at a much lower cost.
Mexican workers work long hours, speak two or more languages and are well educated and are competent, knowledgeable workers.
Companies with the Largest Revenue in Billion Mexican pesos I Cloud, Information and Communication Sector
- IBM – 7.65 Multinational information technology compan Opens 7th office in Mexico – Opened one more office in Mexico as the U.S. technology giant intensifies its efforts to tap into a growing demand for intelligent solutions in the Mexican corporate sector.
- KIO Networks – 6.90 Data center, cloud and managed services, application management, cyber security and data analytics company
- Telmex – 4.95 Mexican telecommunications company headquartered in Mexico City that provides telecommunications products and services in Mexico, Argentina, Chile, Colombia, Brazil, Ecuador, Peru, Venezuela and other countries in Latin America.
- Oracle – 3.01 Multinational computer technology, enterprise software and cloud computing company
- Microsoft – 2.89 Multinational computer technology develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services
Mexico is the world’s fifth-biggest Facebook consumer with over 85 million users and YouTube with 16.90 million recording 16.90 million unique visitors per month. According to Spotify’s “newsroom,” the Swedish company has more than 200 million users around the world. More so, Forbes says that Mexico City is the fifth most populated city in the world with just over 21.5 million inhabitants by mid-2018.
Globalization in its true form have components that make it attractive for businesses and some include education, trade politics, production, financial gains of both countries. One advantage of globalization is that consumers have many wider choices of goods and services and high growth potential in exchange for an equity stake.
Mexico is the Newest Tech Hub for Global Business
Many US technology companies find Latin America the perfect spot to take up shop and Mexico is the go-to place for global reach and technology dominance. Recently Mexico is the topic of political discussion and across the globe with American businesses and investors looking for solutions to financial uncertainty.
- Softtek: Soluciones de TI y Procesos de Negocio
- Hildebrando: Inicio – Home
- Lanix | Estamos Conectados
- IBM – México
- Contact HP – Office locations
- Lenovo: Directorio global de oficinas e instalaciones clave
- Mexico | Alcatel-Lucent
- Huawei: A leading global ICT solutions provider
- Motorola Mexico: My Moto X
Looking at Globalization – Rewards and International Advantages
- Allows for free flow of services, technology sharing upon countries
- Knowledgeable and highly trained workforce
- Intelligence building, technically skilled workers and reduction in trade barriers
- Economic growth, financial stability, lower wages
- Reduced operational costs, business opportunities and rich global development
- Development of an environment for flow of capital and investment among countries
- Free movement of labor among countries
High-Influential Tech Giants and More in Latin America
- IBM Latin America
- IBM Mexico – opens cloud data center close to Mexico City
- Microsoft operates data center in Mexico to fight cybercrime in Latin America
The Best Place to Work as a Software Developer – Technology in Mexico
- Superior Standard of Living
- Immigration Policies Fast
- Legal Process is Easy
- Big Potential Gains
- Respect, Appreciation and Admiration of Technology-Based Position
- Presence of Start-ups
- Building of Strong Infrastructure
- Top Location in Latin America is Guadalajara metropolitan area and the core of Mexico for IT, Electronics and Software industry
- Educational Quality and Advancement is Promising
Moving to Mexico is not for everyone or every company, but for high-tech businesses moving to Mexico has considerable gains and with the proximity to the United States on a short flight, the attractiveness has led more and more start-ups to think twice. Many are taking the leap to find better opportunities, skilled workforce in a beautiful country. The American companies have brought a level of stability, stronger economy and have employed thousands of workers.
However, most of the high technology companies are still in the first Silicon Valley where California leads the way for the top, highly paid and highly skilled elite team of engineers and IT experts and trying to convince them to move to Mexico is another problem and not so easy. This growing trend will continue, and Mexico will continue to grow and move forward in technology and will soon be the next high-tech hub with solid connections to Silicon Valley where most of the computer, software and electronic companies still exist.
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