The cross-cultural problems we encounter with the Americans, in trying to do business or work with them in the same company, are something we are by now used to and familiar with. Israeli high-tech also has great potential in Latin America, but there, it's a very different game.
Dario Zutel, general manager of Win Systems, that engages in real-time clearance for telecom companies, lottery enterprises and all sorts of other businesses, was born in Argentina. This gives him a tremendous edge in the Latin American market.
Zutel explains: "Today, everyone is talking about the attraction of emerging markets, but penetrating them isn't always that easy. For me, the choice was simple; due to my origins, I chose South America. Incidentally, the best positioned there today are the Spanish, since they have the advantage of language and a similar mentality. Traditionally, of course, the South American market has always bought from North American companies, but today, the US hegemony is fading in favour of companies that the South American market feels comfortable with".
South Americans, it appears, very much want to be able to see the whites of your eyes. In other words, they want to feel they are working person to person, one on one. "When we worked vis-a-vis a company in Peru", Zutel relates, "my partner, who is not of South American origin, told me 'look what's going on, I try over and over again to make contact with the manager, and time after time, he does not bother to answer me'. I asked him: 'Did you call him, did you try to talk to him directly?' 'No', he said, 'but I have already sent him three faxes'".
What they do with fax messages, Zutel explains, is throw them straight in the waste paper basket. If there is no close personal contact, business has no meaning for them.
Marketing manager Gadi Shoshan, of Rit, that engages in the field of telecom, relates that his company's success in penetrating South American markets is directly proportionate to its ability to develop warm, pleasant inter-personal relations there. Their sales personnel for South America are chosen not only for their ability to speak Spanish, but very much in accordance with their familiarity with the local culture and customs, and the region. That is how it works.
According to general manager Noam Kra-Oz of Eshed Robotec, which exports training systems in technological fields to South America, a substantial part of export, up to one fourth, goes to Latin American countries, due to the development impetus that is happening there just now. The company works mainly through distributors, since fluent Spanish is a sine qua non for penetrating the market, he explains.
Kra-Oz says Israelis have an advantage over many others, such as the Germans, for example, in selling to Latin American countries. "Israelis put the dialogue on an equal footing, whereas the Europeans, for example, talk down to them. If they have the feeling they are being patronised, being treated as if they are less knowledgeable and less than equal, it's impossible to sell them anything", he concludes.
Israelis, like South Americans, are informal. They do not insist on the niceties of red tape and all the formalities, and the South Americans like that, too, since they, for a change, also prefer to skip onerous procedures, just as we do.
"It is true that customers over there say the technical aspect is very important to them", Shoshan relates, "that the system should be of a high technical level and so forth. But to the best of my understanding, the deal will always ultimately be concluded on the basis of personal relationships that have been established. That is why we make sure that our sales personnel should themselves be South Americans. In places where we do not have sales personnel of the same origin, we work strictly through local distributors, who are able to create such relationships.
"Incidentally, they work with us on a percentage basis, and we do not ask how they divide up the money. The main thing is that we ourselves should not have to work with 'dirty money', because that is a method that we ourselves take care to avoid".
With a view to establishing personal ties, Rit personnel invite potential customers to Israel, to gain first-hand impressions of the enterprise. "Even with their press it works the same way", Shoshan explains. "Nobody will write about us unless we have met with him and invited him out to dinner. Only after forming an acquaintance and becoming friends will they write".
Sometimes, Shoshan relates, South American customers have to be allowed to try the system for themselves, or even be given a system for a free try-out for a certain period. What must be understood, Zutel says, is that you cannot sell to South Americans as you do to Germans or Americans. The latter can read specifications ('specs') and usually know very well what they want and who can supply it. They also know what their criteria are for choosing, and the quality and nature of the suppliers.
"In South America, it must be understood, there are no infrastructures. They sometimes make the leap into the twenty-first century from almost zero. They need to build all the infrastructures, including electricity, telephony and water infrastructures. So there is sometimes a great deal of money there for investment which we Israelis too, want to benefit from".
They have money but they do not have know-how or experience. For that reason, they do not know how to ask for what they want, and one must invest time in order to build their work plans together with them, in accordance with their specific needs. "That is why we also advise our customers", Shoshan says. "Sometimes this actually boomerangs on us, because as soon as they know what they want, there may sometimes be another supplier who will offer it to them more cheaply, and then they purchase from him. But this is a risk we have to take".
Eshed Robotec, casting its bread upon the waters, also provides a "tasting menu". It extends invitations to the people who need to decide, and lets them see to what extent activity in the State of Israel can serve them as a model for development in their country. "Israel, too, is one step behind the United States in industrial development. Thus we can show them here how it is possible to advance and make up for lost time. They can copy our model without sensing any arrogance on our part", he explains.
"Meeting the needs of the South Americans calls for a very large investment also in a series of repeat meetings. "I assume that there are many businesspeople who regard such an investment in an endless number of meetings as a waste" Zutel says. "It does not happen anywhere else in the world, but it is interesting that after all that, projects actually take off very rapidly. Which is to say, all those who think the South Americans are characterised by the 'ma?ana' attitude, of delaying everything repeatedly, are proved wrong. Today, there is a tremendous momentum there, and everything is rushing ahead very fast. They need everything, from today to yesterday, and that fetches us very handsome profits. To sum up, one could say there is a great deal of risk there, but also a great deal of possible reward".
Published by Israel's Business Arena on 24 April, 2000