U.S. Business in Cuba (Part 1 of 2)
Nothing seems to incite a capitalistic feeding frenzy quite as fast as the scent of a potential new market. I’m referring to President Obama’s year-end announcement about restoring full diplomatic relations with Cuba. Since then, the media has been bursting with news about U.S. companies—from Iowa-based Caterpillar to global PepsiCo—that are developing strategies to introduce their products and services to the Cuban market.
While I’m the first to applaud entrepreneurial zeal, a bit of strategic reflection wouldn’t hurt either. I visited Cuba about 15 years ago, as part of a government-approved “cultural learning” group. It was fascinating to see the impeccably maintained mid-century jalopies, to learn about Cuban culture (those highly touted cigars, for example, truly deserve their stellar reputation!) and to see a part of the world so close to us and yet, for most, completely inaccessible.
While American companies are noticeably absent in Cuba, other countries appeared to have established a considerable business bulwark there. U.S. company leaders who imagine a sleeping Cuban giant, just waiting for American consumer products and services to flood their country, may be in for a rude awakening.
Notes Kirby Jones, founder of Alamar Associates, which has advised companies on doing business in Cuba since 1974, “It’s just not going to be like other regions where you see a McDonald’s on every corner.”
Jones opined in a recent New York Times article on the topic that while there may be robust opportunities for some companies, especially those selling products or goods viewed as enhancing Cuba’s domestic production (good news for Caterpillar!), other companies could get the cold shoulder (Pepsi perhaps?).