Wednesday, 16 September 2020 03:07

Covid-19 and Business Models changes for LATAM Featured

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“En Rio Revuelto, Ganancias de Pescadores”. This Spanish saying means that there is somebody ready to take advantage of change, which captures well the opportunity to serve the growing digital citizens that has sprung up due to the pandemic market disruption.

Latin America is taken a heavy toll on this pandemic, with countries like Peru, Chile, Brazil, and Mexico among the worst affect in the world as measured by deaths/1 million-population. The GDP drop in 2020 is expected to be -5% in Colombia to -11% in Argentina; the two largest economies, Brazil and Mexico, are expected to fall 6.7% and 8% respectively (Focus Economics, July/August 2020).  Despite these sobering statistics which are driving major cost and busines model adjustment to tackle a potentially long-lasting demand softness, there are some industries that are holding their investment technology budgets in areas such as Digital Transformation and Security.

 Not that different from other regions in the world, we should see this new normal in LATAM as the base line of future growth as the increasing number of digital citizens, pushed by their physical confinement and limited social interaction, have made themselves more comfortable buying products and services through digital channels

 For IT vendor re-assessing the deployment of resources in the LATAM market Covid-19 may generate more questions than answer. With the background of LATAM’s difficult health and economic climate, topics related to past failed initiatives, higher cost of sales, and overall profitability vis-a-vis other regions become major hurdles to continue investing in the region. And for vendors exploring how to drive revenues from the region to take advantage of the current steep technology adoption curve, choosing the right internationalization process becomes a critical strategic imperative.

 The rapid ramp up of digital engagement is happing at a time of major disruption in which companies has  forced companies to  change how to deploy their human and capital resources and rethink their business models to in survive or remain competitive. Today more than ever agile and flexible business models will determine the winners that will benefit from the current market changes.

 Together with the lost lives and the economic crisis, the growth in digital engagements and appearance of new and successful business model will be lasting effects of Covid-19.

Read 8 times Last modified on Wednesday, 16 September 2020 13:16
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