Companies like Tacna in Mexico are on the rise and they represent an ideal location for outsourcing. Companies cannot keep all their jobs in-house anymore because of the high labor cost and the difficulties of locating a decent location. Mexico is the second largest Latin American country after Brazil and it has the ability to attract hundreds of multinational companies due to its proximity to the United States, the ability to attract educated workers with the schools and universities in Mexico, low labor cost and its desire to be known as a world leader in outsourcing.
Companies have different ways of measuring what it costs to do business in Mexico. Some look at the cost of building assets in the United States and the cost of supplies that must be imported into the United States. Other companies look at the cost of doing business in Mexico. While many think of cost when it comes to doing business, there is a much larger component of value added to a company from the standpoint of the environment where the company operates, the people in the country, the skills of the employees and even the infrastructure required to run the operation successfully.
A company that decides to operate in Mexico can save money with the lower labor rates because the cost of living in Mexico is less than the United States. Companies that operate in the U.S. are able to pay a higher price for labor because of laws in the United States requiring that companies place a higher price on productivity by requiring paid vacations, overtime and other employee perks. Companies that do business in Mexico can get away with paying less because they are not forced into these types of fringe benefits. Companies are also able to buy products and services at a cheaper price because of lower transportation costs.
Companies Succeeding in Mexico are able to tap into the talent pool from Mexico because of the close proximity to the United States and a strong economy. There are thousands of professionals that live and work in Mexico. Many of these individuals come from places such as India, who have the benefit of being able to travel across the border and return to work in the United States because it is financially feasible for them to do so. Some of these individuals will also take a short term contract to help them get experience in a particular field and then go home to seek higher pay in their home country.
The other way that companies Succeed in Mexico are able to succeed is because the Mexican market is a competitive market and is open to foreign direct investment. Foreign direct investment is a type of funding that allows companies to purchase raw materials and equipment in foreign countries to make their products available to the United States market. In addition to having access to foreign labor, companies that do business in Mexico also have access to a large market that consists of consumers who are very aware of the brands that they like and patronize and will use those brands when they travel to Mexico. By being able to create a name for your product and becoming known in the Mexican market you are establishing a name in a location that is desirable.
One thing that many companies struggle with in Mexico is location. There are so many different cities and towns in Mexico, that it is difficult to choose one that works for your company. However, if you do your research you will find out which cities in Mexico have the most potential for success for your type of company. Once you determine which cities have the greatest possibility for success for your type of company, you can then begin to explore those locations. In doing so, you will be able to help your companies succeed in Mexico.