Multilatinas: Titans Coming North

Despite the current financial crisis, multilatinas are poised for continued expansion in pan-regional Latin markets and internationally.

As Latin American economies grew up to 2008, companies in the region have been expanding their businesses from their home countries into other Latin American countries. Now, these companies, so-called "multilatinas," are competing with other multinational companies as never before by expanding outside Latin America into other emerging markets, as well as First World countries. A multilatina is a multinational company based in a Latin American country that has become an economic titan in its home country, dominated its domestic market and sought additional markets in additional countries to facilitate its growth.

Multilatinas are now being managed and led by a new generation of better-trained and educated executives. They are now as prepared as their counterparts in North America, Europe or Asia to lead their companies and their growth. Banco Itau, Grupo Bimbo, FEMSA, Vale, Tenaris and many others are clear examples of multilatinas with world-class management teams.

They have expanded from their home countries to other countries in Latin America, and, significantly, to international markets outside Latin America. Multilatinas, which in the past may have restricted their growth to only neighboring countries, have also expanded throughout all of Latin America and into North America, Europe and emerging markets worldwide.

For example, the leading Mexican baking company Grupo Bimbo has been so successful in dominating the Mexican marketplace that no major competitor has survived. A company like this, very efficient and capable, can continue to grow only by going to other countries. They went to Central and South America and have become a major or dominant force in every country they've entered. Today, they have approximately 40 percent of the marketplace in Brazil. They entered the United States market and acquired Entenmann’s and Thomas's. They also sold their “nostalgia brands” to Americans of Hispanic heritage. Recently, they also entered the China and Czech Republic markets as well. They are truly multinational company.

China's domestic market is becoming more attractive to certain kinds of multilatinas, as is India’s, given the growth of their middle class markets. Multilatinas are also expanding into Europe, as demonstrated by the merger of the Brazilian beer and beverage company Ambev with the Belgian beer company Interbrew. The merged company, InBev, recently acquired Anheuser Busch in the United States, to form Anheuser-Busch InBev, the largest beer company in the world. Other examples of expansions by multilatinas are the acquisition of US and Canadian companies by Grupo Comex, a Mexican paint manufacture, and its rapid expansion in China; the acquisition of Canada’s second largest mining company by the Brazilian mining company, Vale, now the largest iron-ore producer in the world, and its acquisitions of other assets in countries as varied as South Africa and Australia.

Net Geners vs. Old-School Management

The Net Geners (a.k.a. Generation Y) are fighting a war with old-school management and the balance of power is slowly changing. Some say that the Net Geners are highly motivated, multi-tasking, versatile workers and highly collaborative humans. For the old-school managers, they are simply lazy narcissists exposing their intimate life in Facebook, wasting their time and company resources in instant messaging, twitters, and other banalities. We are describing the war being fought between those born in the 1980s and 90s, vs. the others, more seasoned managers and employees, pre-1980s.

But this war is far from being contained between the walls of offices and cubicles. It transcends the corporate terrain, and is becoming part of the informal corporate academia as well as the consultancy swarms, always looking for a new field of flowers.

The Net Geners have grown with networked computers and are being challenged to take their new role at company headquarters, with the same enthusiasm they have killed virtual enemies on the PC screen. They have been encouraged to challenge received wisdom, to find their own solutions to problems and to treat work as a route to personal fulfillment rather than merely a way of putting food on the table. Not all of this makes them easy to manage. Bosses complain that after a childhood of being pampered and praised, Net Geners demand far more frequent feedback and an exact set of requirements for the project under development.

For the older managers, the current recession gives them a relief. Once again, the management fads that always spring up in years of plenty are transitioning to the more “brutal” command-and-control methods. Having grown up in good times, Net Geners have been under the illusion that the world owed them a living. But hopping between jobs to find one that meets your inner spiritual needs is not so easy: there are no jobs to hop to.

Net Geners will certainly have to change some of their expectations and take the world as it is, not as they would like it to be. The old-school managers should also be prepared to make concessions. The economy will eventually recover and the Net Geners will be the only resources available to tap.

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Note from Business Week: Author Don Tapscott coined the term Net Generation a decade ago in his best-selling Growing Up Digital: The Rise of the Net Generation (1998). Even then he was inspired by his kids: In 1993, seven-year-old Alex was already e-mailing Santa Claus. At that time the Web was "a place for outsiders, geeks, radicals or visionaries," Tapscott writes. Net Geners—those born between 1977 and 1997—had little say, as baby boomers and Gen Xers ruled. But fast-forward to now, and Net Geners—81.1 million strong, or 27% of the U.S. population—are starting to put a stamp on education, work, family life, and politics.

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