Global Trends, Internet Marketing and Doing Business with Argentina

Undeniably the earth has become smaller, as the phenomenon we've come to know as globalization becomes more and more all-encompassing. Though this familiar term has no finite definition, several factors are widely agreed upon:

• The integration of markets, finance and technologies
• The influence on domestic politics, economic policies and foreign relations
• The emphasis on speed
• The internet as a major globalization-enabler (Friedman)

This last factor is one that has allowed globalization to take hold of trends as we know them, controlling them and spreading them like wildfire across the globe in a way that only rapid technology can. Just as teenagers in Japan can identify new trends in music and fashion in the United States as they are emerging and vice versa; companies in China can identify and meet demands for manufactured goods in the U.S. as fast as their high-speed internet will allow them. This power that technology, and more specifically the internet, has on globalization has created landmark global trends that influence almost every aspect of business.

Global Trends

The two global trends presented here are so tightly intertwined it is almost impossible to separate them. Both trends fall under the umbrella of "global business." The first global trend is the ever-increasing use of the internet as a means of conducting business. Whether it is used as a means of selling products or services, or merely a communication vehicle, in 2006 it is very rare for an established enterprise not to have an online presence, whether it's domestic or international.

The second facet of the global business trend I'd like to discuss is one facilitated by the technology of the internet: global business itself. The ease and speed of communication and transactions that the internet has made possible have enabled international business collaborations that never before could have been imagined. Whether a company is selling products in Europe, purchasing materials in China or outsourcing call-center and technical support services in India - you can bet the internet plays at the very least a small role.

The Field

The context in which these global trends will be examined is that which is of interest to an internet marketer. Internet marketing, is a field that has been in existence for less than 15 years. It is defined as the use of the Internet to advertise and sell goods and services. Internet Marketing includes pay per click advertising, banner ads, e-mail marketing, search engine marketing (including search engine optimization), and more recently: blog marketing, and article marketing. ("Internet Marketing")

As can be expected with an ever-changing medium such as the internet, the field has always been and continues to be in a constant state of evolution. As such, one of the absolutely most important tasks for any internet marketer is to stay current with changes in the internet marketing landscape, including competition, demand, user behavior and experience, as well as changes in the algorithms of the all-important search engines. As a Search Engine Optimization Strategist, I pride myself on ethically helping companies of all types to be found by internet users who are specifically looking for them. I enjoy the idea that through words, I am helping to match searchers up with the precise products and services they are looking for.

The Country

The relationship between the global trends identified and the context in which they will be examined also has a "global" component. The global component in this case is my favorite Latin American country, Argentina.

Argentina is rich in natural resources, has an export-oriented agricultural sector, and a diversified industrial base. Most relevantly, Argentina is known for its highly literate and educated population. However, over the last ten years, the country has suffered from economic problems that (particularly in the year 2000) lead investors to become skeptical of the government's ability to pay debts and maintain its goal of keeping the peso on par with the U.S. dollar. The economic situation worsened in 2001, causing massive bank withdrawals reminiscent of the Great Depression. Unfortunately, this promoted even further decline in consumer and investor confidence. In January of 2002, the peso's peg to the dollar was lifted and the currency was floated by the Argentine government. The exchange rate plunged, but by mid-year, the economy had finally stabilized. From that point on, growth has been steady, supported by a revival in domestic demand, solid exports, and favorable external conditions. ("Argentina")

The Thesis

My assertion is that the global trend toward internet use, paired with the global trend of doing business across international borders can open huge marketing opportunities in Latin America for internet marketing professionals with an intimate knowledge of the language and culture. It is through the field of internet marketing - particularly in the business-to-business sector - that mutually beneficial partnerships can be formed between foreign (U.S.) firms and their Argentine counterparts.

The Case

According to a Los Angeles Business Journal article written in November of 2005, American companies have underestimated international business opportunities in Latin America. In part, it is argued,the blame can be placed on the fact that U.S. companies have the benefit of such a large domestic market. (Neff and Magliona) Though increasing numbers of U.S. firms in all industries are exploring global business opportunities, there are still many companies - both large and small, that don't see an immediate need for global expansion. They might argue that there is enough demand, supply and labor to keep one hundred percent of their operations in the United States. Second, some of these companies who choose to remain purely domestic have a fear of doing business abroad. Perhaps they have a distrust of their foreign counterparts or fear of failing in international business endeavors. Maybe they see language and culural barriers as insurmountable. In terms of American companies who do choose to do business globally, Latin America faces severe competition from providers in Asia and Eastern Europe - namely China and India. In these countries, the capabilities have been well-defined, the relationships established, and the success well-proven.

The relatively slow speed at which American companies are initiating business with Latin American companies opens up tremendous opportunities to firms (both small and large) to enter these markets and ramp up their competitiveness.

While China may be the first international business vehicle executives consider for manufacturing, and India may come to mind first for call-center and IT outsourcing, let's consider some strengths Argentina has to offer the global business community and how the internet can help establish the proposed liaisons.

The aforementioned recent history, the stabilization of the economy and the slow and steady economic growth contribute to the first benefit of doing business with Argentina. Argentina's currency is much cheaper now, and that makes its goods and services more competitive overseas. (Tomas) This makes the country particularly attractive in terms of imports, or what I like to call niche imports. Argentina produces high quality wine, beef, leather and artesanal artifacts. Curently, the exchange rate is roughly over 3 Argentine pesos for 1 U.S. dollar. That translates to huge profits for American resellers, as well as a further boost for the Argentine economy, especially in these smaller niche markets.

Another benefit of doing business with Argentina is the level of education. Argentina's population is known as a very well educated one. Universities are very accessible and virtually free. Upon completing high-school, Argentine students do not think they are finished, but rather just beginning. This, paired with the favorable exchange rate mentioned above makes Argentina an ideal destination for U.S. companies looking to outsource software development, IT, call-center operations, etcetera. "Central and South American countries are improving on outsourcing competitiveness," said Mark Minevich, international strategic advisor and principal at Going Global Ventures, a consulting firm (that focuses on outsourcing centers) that evaluated and ranked countries across the globe. (Hook)

Other benefits include being in the same time zone as the United States, some government incentives already in place, and also the language. Spanish is the native language in Argentina. Spanish is also the second most frequently-used language in the United States. Many customer-service call centers offer Spanish-speaking service. Setting up operations in Argentina would have this benefit built-in. Also, in Argentina, students (from elementary school through high school and beyond) study English as well as Spanish. This makes for a highly bilingual population and facilitates business with firms in English-speaking nations.

According to a study by research firm comScore Networks, the U.S. Hispanic online population, which comprises more than one third of the total U.S. Hispanic population, is 11 percent larger than the total online population of Spain, and 4 percent larger than the total online population of Mexico, Argentina and Colombia combined. (Yunker) This further proves the scope and depth of opportunity for partnerships between Argentine companies - in this case internet marketing companies or even individuals and U.S. businesses that want to reach the U.S. Latino market.

Finally, though these multiple business opportunities exist and continue to grow, companies are reacting slowly and not taking advantage of them. Some might argue that the responsibility for this lies with the Latin American countries - not with the U.S. businesses that stand to gain from the relationships. Argentina, among other Hispanic countries should be more aggressive in pursuing the relationships with foreign companies. Eugene Kublanov, vice president of corporate development at neoIT, a consulting firm that specializes in providing advice on offshoring said the following:

"Central and South American service providers need to mature at a faster pace in their marketing and sales in the U.S. to compete effectively with entrenched offshore players." (Hook)

The Conclusion

Herein lies the answer for how to bridge these gaps for beneficial business partnerships between U.S. businesses and Argentine service providers. As Kublanov states, "marketing and sales" are key. This is where the two global trends come in and truly unlock the aforementioned opportunities. It is through the internet, particularly in business-to-business models that profitable relationships can be initiated and where Argentine service-providers should focus their marketing and sales endeavors. The ease and speed of communication mentioned in the beginning of this article are what will bridge the gap between Latin American "nearshoring" prospects and the American partners that stand to benefit from such relationships.

Argentina is a ripe market for U.S. companies and other foreign firms looking to enter into the global business landscape. It offers an educated labor pool, a very favorable currency exchange rate, a well-developed infrastructure, political and economic stability, and a high degree of proficiency in the two most popular U.S. languages. The interrelated global trends of doing business across international borders and employing the internet as a means of communication for conducting said business are ideal grounds for establishing business partnerships with Argentine firms. The field of internet marketing should be instrumental in bridging these factors and bringing together American investors and businesspeople with nearshoring and other business opportunities in Argentina.

Moreover, the portfolio I developed in this program, particularly the sections involving globalization and international business, will allow me to deal with these trends and other societies in a number of ways. First, through thorough examination of the global business environment and through the cultural training I received in various courses, I have overcome the "fear" of doing business abroad mentioned earlier in this paper. This is the first step toward dealing with these trends in a competitive fashion. Secondly, my acquired proficiency in performing in-depth industry, company and opportunity analysis as demonstrated in my portfolio has prepared me to consider the different threats and opportunities of different societies and settings as applied to these global trends. Most importantly, however, the development of my portfolio has allowed me to identify and build my unique, distinctive competencies that will propel my career within this global context.

Cited Sources

"Argentina." The World Factbook. 20 July 2006. U.S. Central Intelligence Agency.

25 Jul 2006 .

Ferraro, Gary P.. The Cultural Dimension of International Business. 5th ed. Upper Saddle River, NJ: Pearson/Prentice Hall, 2006.

Friedman, Thomas. "DOSCapital." Foreign Policy v. 116 (1999)

Hook, Brian. "Latin America: Outsourcing's New Hot Spot." Ecommerce Times Outsourcing 21 Jun 2005 25 Jul 2006 .

"Internet Marketing." Wikipedia. 2006. MediaWiki. 27 Jul 2006 .

Kelleher, Ann, and Laura Klein. Global Perspectives: A Handbook for Understanding Global Issues. 2nd ed. Upper Saddle River, NJ: Pearson/Prentice Hall, 2006.

Tomas, Juan Pedro. "Fresh air: no banks? No problem. Businesses in Argentina are doing just fine on their own." Latin Trade April 2005 29 Jul 2006 .

Yunker, John. "Spanish Speakers and the Internet." Web Globalization News 31 Mar 2003 22 Jul 2006 .