Category: News

Embracing the Local Customer and Market: “De-coupling” is the new reality of global business

In the ever-evolving landscape of 21st century international business, the era of traditional globalization, as we once knew it, is over! Provocative you say?  Yes, I understand the process of increasing interconnectedness and interdependence among countries, economies, cultures, and societies has indeed transformed the world. It’s raised the world’s overall living standard and brought millions of its citizens out of poverty[1]. This is a beautiful thing!

What’s called the 2nd globalization era beginning in the 1940’s enabled many companies for the first time to go beyond their land borders and reach an entirely new customer base for their products and services. This trend only accelerated at the start of the 2000’s by the creation of the internet which opened access to a rapidly growing worldwide consumer class while bolstering the bottom line of corporations who best leveraged this new distribution channel.

However, there are new and emerging challenges to the current state of play. We now stand at the threshold of a new age, an age where all companies are being tasked with reorienting their strategies for addressing customers, partners and governments as well as how supply chains are organized within the major global markets.

The days of resting on the laurels of past practices and assuming the unfettered flow of goods and technology are dimming. In 2023 the landscape has evolved, and formidable new challenges have emerged which are creating what can only be described as a de-coupling of global commerce as we have been used to. 

In response, companies are recalibrating their strategic approaches to international markets, driven by recent seismic shifts, such as the global pandemic, the rapid evolution of technology, and the heightened geopolitical volatility (think US-China, war in Ukraine etc..) that sets today’s stage apart from just five years ago[1].

These transformative dynamics are compelling companies to embark on a two-fold journey. On one front, they are initiating a de-risking process of proactively bringing strategic operations closer to their home regions, and in some cases, even within the confines of their own borders. This is visible today in the United States being driven by immense Government funded “re-shoring” programs such as the CHIPS Act[2] and Inflation Reduction Act which looks to secure key industrial resources like computer chips and EV batteries firmly under US control. 

In the Semiconductor sector, Intel is investing $45.3 billion in new manufacturing investments across US states Arizona, New Mexico and Ohio to bolster US chip-making capacity and R&D leadership. As semiconductors become the new “oil” of the Data Economy[1], both the US government and domestic companies are investing in strategic projects so they no longer remain dependent on overseas companies for their supply of critical components and materials while striving to enable development of a domestic base of supply.

Simultaneously, companies are adopting a somewhat counter yet complementary strategy of establishing a more direct and on-the-ground presence in foreign markets that are strategically important, now and in the future. This move allows them to be in close proximity to their customers while having access to cutting-edge technologies and governmental authorities that will shape the global economy. 

Within the United States it’s the establishment by overseas companies of independent subsidiaries with regional management, bypassing low value intermediaries. This ensures foreign companies don’t miss out on large growth opportunities due to protectionist policies and acts as a way to mitigate nationalist tendencies by attempting to be accepted as part of the local community. 

The example of Tik Tok (parent company ByteDance Ltd is headquartered in China) is well known and thus far their US business has escaped from being overly scrutinized. It’s also clear TSMC (Taiwan Semiconductor Manufacturing Corp.), the leading semiconductor foundry, understands potential risks from the current geopolitical tensions between the US and China. This was no doubt the main driver of their decision in 2022 to plan building of multi-billion-dollar, leading edge semiconductor fabrication facilities or fabs in the US.       

A lesser-known example is United Imaging, a top Chinese medical imaging company. United founded its US subsidiary in 2013 and continues to invest in its US footprint, including manufacturing and R&D capabilities, from funds raised in a $500M Series A financing round. United Imaging was early to understand the importance of a regional strategy for the US market and in recent years has competed quite successfully with other leading medical equipment companies at US hospitals. In recognizing the impact on their business from challenging US-China relations as being highly uncertain, United is establishing itself as a “local” player and is committing resources to its US strategy and image with its customers.            

We’re only at the beginning of a new era to be defined as a de-coupling from the trade norms of the past decades. Although complete de-globalization is highly unlikely, all companies valuing their market positions and seeking sustainable growth on the global playing field should be paying close attention.

The Unravelling of Traditional Globalization

For decades, traditional globalization was seen as the ultimate goal for businesses. It promised a world of borderless markets, where economies of scale and standardized products ruled. Global companies focused on mass production, global supply chains, and economies of scale to cater to an imagined universal customer.

However, this vision of a uniform global market is now giving way to a more nuanced reality. Although globalization elements remain in place and will be for the foreseeable future[1] (volume of goods traded increased by 10% over pre-pandemic levels in 2022), several key factors have contributed to the unravelling of traditional globalization. Moreover, impacts will be felt over the next decades at what could be a more rapid pace than macro changes in trade flows have typically occurred:

Diverse Customer Needs: Customers in North America, Asia, and Europe have diverse preferences, cultures, and regulations. A one-size-fits-all approach has never sufficed, and this is only becoming more apparent as the consumer class increases globally. 

Resurgence of Protectionism: One of the most noticeable signs is the resurgence of protectionist policies in various countries including US and China. Trade wars, tariffs, and the desire for self-sufficiency are causing nations to turn inward, placing their own interests above global cooperation.

Supply Chain Vulnerabilities: The COVID-19 pandemic exposed the fragility of global supply chains. Companies are now seeking localized and diversified sourcing options to ensure resilience, future prosperity.

Technological Advances: Technological innovation has empowered smaller, local players to compete effectively on both a local and global scale, disrupting traditional market dynamics. The pace of technology will only increase at breakneck speed, underscoring the need for companies to have full access to advancements in order to maintain competitiveness. 

Rise of E-commerce: The growth of e-commerce has made it easier for businesses to reach customers directly, bypassing intermediaries and forging personal connections. Asset-light platforms will become more the norm for sales distribution which further drives the interest in direct customer relationships.

There are more recent factors relating to the proliferation of Artificial Intelligence (AI) systems and generative AI “agents” that will presumably take jobs away from humans as well as eliminate many others in the coming years. There are several opinions how this will ultimately play out and the changes to be brought about by AI are still difficult to predict. However, we do know AI will have an outsize effect on the global economy and how companies ultimately organize their operations while addressing core markets and customers.  

The Dawn of a (more) Regional-Centric “Go Local” Approach

In response to this shifting environment, global companies are charting a course that combines traditional approaches with the new realities. They are embracing a regional-centric approach[1] that involves establishing local “footprints” in major regions of commerce (eg. North America, Asia and Europe) to protect against risk of losing access to key materials and technologies, to leverage new (sales) growth opportunities while intimately understanding and engaging with customers in these distinct markets. 

Here’s why this shift is essential:

Direct Customer Engagement: Setting up local operations allows companies to interact directly with customers, partners and regulators helping gather insights and building relationships. This has always been beneficial and the greater commitment by foreign companies through a direct approach only powers this advantage today.

Localization: Businesses are adapting to local tastes, preferences, and regulations, tailoring their products and services to meet the specific demands of customers in the region. 

Economic Clusters: Regional business ecosystems are forming, where companies collaborate closely, sharing resources, knowledge, and expertise to gain a competitive edge in a customer-centric environment.

Customization: The age of mass production is giving way to customized and niche market offerings, as businesses find success in catering to the unique needs of customers worldwide. The growth of additive manufacturing supported by software tools will bring the economics of customized and tailored products to be in line with more traditional manufacturing, which only increases options of where products can be produced.    

Market Sensitivity: Connected to the above, understanding local nuances and preferences enables tailored offerings that resonate with customers in each region.

Resilient Supply Chains: Local presence provides agility and resilience in the face of disruptions, ensuring a continuous supply of products and services.

Cultural Relevance: Companies can adapt their messaging, branding, and strategies to align with the cultural contexts of their target regions.

How companies will succeed in this new environment

In order to be well aligned with today’s circumstances and address de-coupling of our traditional commerce system that drives the need for a more regional centric approach, today’s companies are deploying the following tactics and tools to carry out their strategies:  

Market Entry Strategy:

  • Market Research: Conduct thorough market research to understand the target market landscape, including consumer preferences, competition, and regulatory requirements.
  • Market Segmentation: Identify target customer segments and regions within markets where the company’s products or services have the highest/most potential.
  • Entry Mode: Recommend the most suitable entry mode, whether it’s through acquisitions, partnerships, joint ventures, or establishing a new subsidiary.
  • Create a Go-to Market Plan and forming of an industry advisory board comprised of industry-credible advisors to foster a more effective and efficient pathway to connect to the desired industry stakeholders.

Business Development:

  • Strategic Partnerships: Identify and facilitate strategic partnerships with local businesses, distributors, or suppliers to enhance market penetration and efficiency.
  • Sales and Distribution: How companies establish effective sales and distribution networks, including setting up of local sales and business development teams or leveraging e-commerce platforms.
  • Client Acquisition / Marketing strategy: Developing a client acquisition strategy, including lead generation, sales funnels, and customer relationship management, to grow their customer base.


  • Product Adaptation: Assist in adapting products or services to meet the specific needs and preferences of target consumers, considering regional variations.
  • Technology Integration: Help integrate cutting-edge technologies, such as IoT, AI, or automation, into their operations to increase efficiency and competitiveness.
  • R&D Collaboration: Facilitate collaborations with local research institutions, universities, startups, or innovation hubs to foster technological advancements.

Organizational Leadership:

  • Leadership Development: Provide leadership coaching and training programs to equip company’s leadership team with the skills and mindset required to lead in the target market.
  • Cultural Sensitivity: Address cultural differences and promote a culture of inclusivity and diversity within the organization to facilitate effective cross-cultural collaboration.
  • Change Management: Guide company through organizational changes necessary for market entry, ensuring a smooth transition and alignment with strategic goals.

Regulatory Compliance:

  • Regulatory Guidance: Navigate market regulations, standards, and certifications to ensure compliance in areas such as safety, environmental regulations, and industry-specific requirements.
  • Quality Assurance: Implement quality control measures to meet market standards and enhance product or service quality.

Risk Management:

  • Risk Assessment: Identify and assess potential risks, including legal, financial, and operational, associated with entering the market. As example, be aware of local tax laws which can be quite different between regions/countries and may offer opportunities for R&D tax subsidies/credits. 
  • Risk Mitigation: Develop risk mitigation strategies and contingency plans to minimize potential disruptions to business operations.

Networking and Government Relations:

  • Networking: Leverage industry contacts and networks to connect with relevant stakeholders, including government agencies, industry associations, and potential partners.
  • Government Relations: Assist with understanding and navigating government policies, incentives, and support programs that can benefit company’s operations.

Performance Monitoring:

  • KPIs and Metrics: Define key performance indicators (KPIs) and metrics to track the success and effectiveness of the company’s operations.
  • Continuous Improvement: Encourage a culture of continuous improvement by analyzing data and feedback to make informed adjustments to strategies and operations.

Sustainability and Corporate Social Responsibility (CSR):

  • Sustainability Strategies: Develop and implement sustainability initiatives and CSR programs, aligning with market expectations for ethical and environmentally responsible business practices.

In conclusion, those companies utilizing the above tools to support a strategy that combines operational strength at home with the proper organizational approach abroad to navigate strategic relationships with their key customers, technology partners and government regulators will have a size-able competitive advantage in the new global commerce playing field of the 2020’s.  

Global Kinetics is a partner to both start-ups and established corporations alike to support and align their regional centric business strategies with the overall Vision and Mission for the enterprise.  

By offering comprehensive advisory services that encompasses market research, business development, innovation, organizational leadership, risk assessment and compliance, we guide international industrial companies to successfully establish their presence and thrive in the fast changing, highly competitive market regions of the 21stcentury.

For more information about how we can become a partner in supporting your growth ambitions, please feel free to contact Jeremy Simon:

[1] T.Fairness (2023), “Trade slump re-shuffles cards in favor of US”, Wall Street Journal

[1] S.Altman, C. Bastian (2023), “The State of Globalization in 2023”, Harvard Business Review

[1]A.Fitch, G.IP (2023), “Chips are the new oil and America is spending Billions to safeguard it supply, Wall Street Journal

[1]C.McCaffrey, O.Jones (2022), “How to shift strategy in a Geo-Strategie era in 2023”, Ernst & Young   

[2] USA Facts (2022), “What’s in the recently passed CHIPS Act”, USA Facts website

[1] J.Norberg (2018), “Globalization’s Greatest Triumph: The Death of Extreme Poverty”, Cato Institute

The Futility of Chasing “Unicorns”

Baseball has long been a sport that values home runs and grand slams (home runs hit while there are already 3 players on base) above all else, with fans and sports analysts alike often focusing on the big hits as the ultimate measure of a player’s worth. However, a sophisticated baseball enthusiast knows that this focus on grand slams may be misguided, and that the most desirable hitters are those with a high on-base percentage.

An on-base percentage (OBP) measures a player’s ability to get on base safely, including hits, walks, and even being hit by pitches. This statistic is widely recognized as a more accurate measure of a player’s overall offensive contribution, as it takes into account not only their ability to hit home runs but also their ability to get on base and contribute to rallies.

Conversely, the focus on grand slams perpetuates a “boom or bust” mentality that can lead to inconsistent and unsustainable offensive production. While grand slams can certainly be exciting and impactful, they are also relatively rare and often rely on a combination of luck and timing. Hitters who focus solely on hitting grand slams may sacrifice their ability to consistently contribute to their team’s offensive efforts.

Furthermore, the emphasis on grand slams can result in a lack of diversity within the sport. Teams may prioritize power hitters who can hit grand slams, even if it means sacrificing players with a more well-rounded offensive game. This can limit potential growth and innovation within the team and sport overall, as well as create a culture that values individual accolades over team success.

In contrast, focusing on players with a high OBP can lead to a more sustainable and consistent offensive approach. These players are more likely to consistently get on base and contribute to rallies, creating a more dynamic and diverse offensive attack. This approach can lead to more consistent success for teams and players alike.

As such, while grand slams may be exciting and attention-grabbing, the focus on these big hits is indeed rather misguided. The most desirable baseball hitters are those with a high OBP, as they contribute to their team’s offensive efforts in a more sustainable and consistent way. By prioritizing these players, teams can create a more dynamic and diverse offensive attack, leading to more consistent success on the field.

Now, while you might believe that this article is about the popular sport of baseball, in truth, it is actually about Silicon Valley. “Really?”, you ask. 

To be sure, Silicon Valley has long been a hotbed for startup investments, with investors seeking to find the next unicorn – a startup that achieves a valuation of over $1 billion. While the allure of such high returns is certainly enticing, sophisticated investors know that this focus on unicorns is misguided. To be more successful in achieving long-term, sustainable portfolio returns, investors in Silicon Valley and other startup ecosystems around the world should definitely consider shifting their focus away from unicorn startups.

Firstly, the unicorn mentality often leads to a focus on short-term gains over long-term value creation. This can result in startups prioritizing growth at all costs, even if it means sacrificing profitability or sustainability. This short-term mindset can lead to burnout and ultimately result in the demise of the company.

Secondly, the unicorn mentality often leads to a lack of diversity in the types of startups that receive funding. Investors tend to gravitate towards startups that fit a specific mold or have a proven track record, which can result in missed opportunities for innovative startups that do not fit this mold. This lack of diversity can stifle innovation and limit the potential for growth within the broader ecosystem.

Thirdly, the focus on unicorns can result in a culture that prioritizes hype and buzz over substance. Startups may feel pressure to generate hype and media attention to attract investors, rather than focusing on developing a solid product and sustainable business model. This can result in a skewed perception of success that prioritizes flashy headlines over real-world impact and steady, long-term investment returns.

So instead of focusing solely on unicorns, investors in Silicon Valley and elsewhere should consider a more measured approach to startup investments. This includes a focus on sustainability, diversity, and long-term value creation. Investors can seek out startups that prioritize profitability and sustainability, rather than simply prioritizing growth at all costs. Additionally, investors can broaden their investment portfolios to include startups that may not fit the traditional mold but have the potential for significant impact.

In conclusion, like measuring the success of a baseball player on the number of grand slam home runs they hit, Silicon Valley and other startup ecosystems should not measure their success on the number of unicorn companies they produce. One very important thing to bear in mind is that all great home run hitters have one other very specific thing in common – they strike out a lot. So, analogous to measuring a ball player’s OBP to gain a more accurate assessment of their overall contribution, startup ecosystems and investors should be measured based on how many of their portfolio companies are “singles, doubles or triples” vs. just home runs and/or grand slams. And to put one final nail in this point, nearly 1 in 5 unicorns no longer exist or are “under water”, i.e., below their earlier valuation in public or private markets.

So, let’s strive to create startup ecosystems that foster high numbers of successful, viable, profitable businesses, stimulating economic growth, job creation, increased tax revenues, innovation, international competitiveness, and numerous other benefits, versus merely focusing on creating unicorns. 

Let’s play ball!!

#siliconvalleyinyourpocket #sviyp #startupecosystem #unicorns #investors #startups

Enterprise Mobility: The Key for a Company’s Development

What is Enterprise Mobility?  How can your company benefit from it? Tigo Business Forum in Guatemala City promoted new ways of adapting technology to your production chain.

By Louisa Reynolds,

Enterprise mobility as a new global trend was the main subject of the second edition of Tigo Business Forum 2015, which had the participation of distinguished international speakers such as Apple’s co-founder Steve Wozniak, enterprise mobility guru Jeff Wallace and Waze’s co-founder, Uri Levine.  Leading companies in the technological sector such as Fortinet, Huawei and Avaya were amongst others participating at the event.

Tigo Business’ Director Francisco Mancilla, explained that enterprise mobility is a new way of doing business that promotes innovation and new ways of external and internal collaboration. Amongst the industries that are adopting enterprise mobility are distributors, manufacturers, educational and health services, Banks, entertainment sector, financial services and automobile industry.

“The most important corporate processes require for employees to have essential data at their fingertips so that they can make crucial enterprise decisions”, said Mancilla.

Steve Wozniak captivated the audience with his anecdotes and advice to become a successful entrepreneur in modern times. “I think there are two versions of success: the success that others think you have and the success that you think you have. I think I got to impress myself. I would be my own hero”, said the innovator.

Apple’s co-founder said that as a child he stood out in math and developed the capacity to design a computer in just two days, but he asserted that “his only stroke of genius lies in his ability to make others believe that he is a genius.”

He added that “the most important thing in life is to be happy” and said that “honesty is the center of everything that is good in life.”
His main advice for Central American entrepreneurs would be to design projects anchored in local needs and reality.

How to implement enterprise mobility?

Jeff Wallace, enterprise mobility guru, said that currently, technology is advancing in giant steps, which imposes companies with the challenge of remaining up to date, but this must not inhibit the creative and development processes. “Companies are in a rush, they are pressing the panic button and saying: ‘let’s build an app’”, said Wallace.

To effectively implement enterprise mobility, Wallace said, it is necessary to follow the next steps:

1) Form a Mobility Council within the company to determine the needs of the organization in terms of process support, policies and tools that support mobility;

2) Develop an enterprise strategy and roadmap that should include the organization’s justification to create the app and its competitive advantages;

3) Invest in projects that will not be outdated in the future;

4) Create an organizational policy that allows collaborators to bring their own devices.

Wallace warned that no device is one hundred percent safe. “If you want security guaranties you must disconnect the devices. Any device that has an IP address is susceptible to hacking”, said the entrepreneur.

He also mentioned the role that technology and social media have played in recent social movements going on in Guatemala and Honduras that have demanded the resignation of President Otto Pérez Molina and Juan Orlando Hernández respectively.

“It is a phenomenon that is not exclusively Central American; we have also seen it in the Middle East. Social networks have become a vehicle to communicate the truth about what’s going on. People with mobile devices have the freedom to communicate the truth in ways that defy traditional media”, said Wallace.

The Waze phenomenon

Waze’s co-founder, Uri Levine, said that between 60 and 70 million people around the world have downloaded this innovative community based traffic and navigation app. Initially, the user profile was professional men, between 30 and 50 years old, with vehicle and access to smartphones, but gradually became popular between women and currently the number of women who use the app is greater than that of men.

At a Latin American level, countries with the larger number of Waze users are Brazil, with 30 million, Mexico and Colombia. In Central America, Waze has become popular in countries like Costa Rica and Guatemala, where it has 800,000 users.

After Google purchased the app for US$1.3 billion in 2013, the enterprise has continue to grow and Levine estimates that it is very likely that in the future it can be used for Google’s automated vehicles. A new app called Moovit, developed in 2012, seeks to adapt Waze’s concept to public transportation.

After selling Waze, Levine has worked in developing other apps that seek to empower consumers, the main ones being: Feex, an app that calculates the fees for financial products acquired by consumers (for instance, retirement funds and credit cards), Zeek, a virtual market where vouchers obtained by consumers when returning items at retail stores that are not frequently used can be sold, and Engie, an app that logs into your vehicle’s internal computer to detect mechanical failures, find the best car shops and compare prices.

Trends: Enterprise Mobility and Apps for Social Change

By Soy502

During several hours, great gurus of technological entrepreneurship shared with Guatemalan entrepreneurs in Tigo Business Forum, whose main figure was Steve Wozniak, co- founder of  Apple.

During the Forum, Wozniak explained how he designed the Apple I and II, while Steve Jobs was the one who sold and monetized his ideas, but neither of them knew about business management.

“I wanted everybody to have a computer and I didn’t mind to give away my designs so that others could replicate them. But Steve Jobs told me once: we could sell this.

Steve Wozniak

The entrepreneur of the gigantic Cupertino company gave advice to Guatemalan entrepreneurs, indicating that if “you have an idea, you don’t have much money and you want to begin an enterprise, how do you do it? Simple, work from your home garage”, he said.

During a press conference, Wozniak explained that the next steps for technology are headed towards developing more software, and the famous wearable devices.

“There is enough hardware already, there are tablets, watches, smartphones, laptops… the next step will be towards software, developing more ideas.

Steve Wozniak

Enterprise Mobility

Tigo Business Forum 2015 focused on enterprise mobility for enterprise transformation, looking for new ways to work, as well as adaptable innovation for companies.

800 thousand Waze users in Guatemala

The speaker who opened the forum was Francisco Mancilla, Director of Tigo Business, who highlighted that technology reaches companies with its employees, whom already have devices with internet access and that is something that needs to be used to improve work processes.

Mancilla assured that there is an estimate of at least 7.5 million smartphones in the country, which implies a potential to improve enterprise productivity and lessen operational costs.

Enterprise mobility is a global trend that contributes with the development and growth of companies through the use of technologies that facilitate work. Currently we account for 7 million smartphones, and that improves the internet’s penetration in the country. 

Francisco Mancilla

John Cupit, Huawei Global’s Director, presented organizational structures that entrepreneurs can use to improve processes.

Jeff Wallace, co-founder of Global Kinetics, spoke about technological aproaches that companies can use to improve their processes, reduce costs and grow their contacts and possible client’s lists.

Uri Levine, founder of Waze, was the last speaker to be on stage and he described that in Guatemala there are more than 800 thousand users of this app, and currently they are developing more apps that seek to empower the user.