Dealing with Disruption in Latin America

In the annals of corporate history, there are plenty examples of companies that failed to adequately respond to disruptive threat: IBM, Kodak, Nokia, Blackberry and Sears, among others. They all saw disruption coming. A few even developed their own disruptive product. However, they all failed to sufficiently re-invent themselves and consequently lost market share (or worse).

Today, companies compete in markets that face an unprecedented pace of disruption, be it from technological change or new business models, both of which can undermine market share and profitability.

Alarmingly, in Latin America, the pace of disruptive change in some service verticals (taxis, hotels, entertainment, small business lending, digital payments, last mile deliveries) is even faster than in the U.S. While free trade upended Latin America’s manufacturing and agriculture industries, domestic services that represent 70% of Latin America’s GDP remained largely unscathed, still protected, and—by and large—inefficient. Now that 70% of urban dwelling Latin Americans own a smartphone, app-delivered business models are attacking those inefficient service sectors with resounding success. As such, companies operating in Latin America face a significant threat of disruption.

To assist our clients facing disruptive threat, we have joined forces with IG Motion, a boutique management consulting firm, formed by veterans of McKinsey, BCG, and KPMG LatAm consulting practices. We have devised a process that leads our clients from diagnosis of the disruptive threat to the delivery of a re-invented market position, a process that can take anywhere from 9-24 months to execute.