This document summarizes a study on large regional firms in the Caribbean. The study examined the growth strategies, trajectories, and patterns of large regional Caribbean firms with 500+ employees across several countries. It involved interviews and surveys with CEOs and top executives. The study identified three geographic growth trajectories: country-centric, Caribbean-centric, and using the Caribbean as a platform for global growth. It also identified three patterns of growth relative to markets: market dominance, market development, and using market dominance as a platform for market development. Finally, the study outlined some common generic growth strategies used, including integrating new value chain steps, deploying value through new channels, and old patterns of growth.

1. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
DRIVERS
OF
GROWTH
AND
OPPORTUNITIES
FOR
EXPANSION
INTO
NEW
MARKETS
1
BEING
KNOWING
DOING
THINKING
EIL
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets
An
approach
from
the
Base
of
the
Pyramid
Prof.
Miguel
Carrillo,
Ph
D.

2. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
2
BEING
KNOWING
DOING
THINKING
EIL
• Objec5ve
of
the
Study:
Understand
and
Document
Growth
Strategies,
Trajectories
and
PaLerns
in
Large
Regional
Caribbean
Firms.
• How
LRCF
are
deliberately
designing
strategies
for
the
BOP
• Large:
Typically
>>
500
employees
• Countries:
– DR
– Guyana
– Jamaica
– Suriname
– Barbados
– Trinidad
and
Tobago
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets

3. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
3
BEING
KNOWING
DOING
THINKING
EIL
• Project
Funded
by
Compete
Caribbean.
• Method:
– 37
in
depth
interviews
with
CEOs,
Chairman
and
Top
Execu5ves
of
Largest
Corpora5ons
in
the
Caribbean
– 21
Surveys
– 6
Surveys
of
Base
of
the
Pyramid
Market
Profile
– Iden5fica5on
of
about
9
Growth
Trajectories
– Mapping
of
LRF
– Cases
and
Mini
Cases
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets

4.
The
CARIBBEAN
BOP

13.
Business
Mapping
of
Large
Regional
Firms
in
the
Caribbean

14. Local
Regional
C
O
N
G
L
O
M
E
R
A
T
E
S
I
N
T
E
G
R
A
T
E
D
Jamaica
Broilers
Bermudez
Group
TSTT
Blue
Waters
Associated
Brands
SM
Jaleel
Angostura
Jamaica
Producers
Group
Pres5ge
Massy
Group
Ansa
Mcal
Goddard
Grace
Kennedy
Sandals
Sol
Group
Sco5a
Bank
Republic
Bank
First
Ci5zens
Bank
Guardian
Holdings
Sagicor
Trinidad
Cement
Ltd
CIBC
Kerstens
Agos5ni
Holdings
Fernandes
Group
Banco
Popular
Grupo
Ramos
Jamaica
Money
Market
Digicel
Courts
Grupo
Corripio
Grupo
Vicini
Grupo
Leon
Jimenez
Grupo
Punta
Cana
Grupo
Linda
Centro
Cuesta
Nacional
Sociedad
Industrial
Dominicana
Banco
BHD
Leon
One
Caribbean
Media
Electrical
Industries
Limited
Strategic
Groups
Grupo
Almonte
Banks
Holding
Limited

19. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
19
BEING
KNOWING
DOING
THINKING
EIL
• Geographic
Growth
Trajectories:
– Trajectory
1:
Country
Centric
– Trajectory
2:
Caribbean
Centric
– Trajectory
3:
Caribbean
as
pla`orm
for
Global
Growth
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets

20. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
20
BEING
KNOWING
DOING
THINKING
EIL
• Growth
PaLerns
rela5ve
to
Markets:
– PaLern
1:
Market
Dominance.
Have
a
bigger
slide.
– PaLern
2:
Market
Development.
Have
a
bigger
pie
– PaLern
3:
Market
Dominance
as
the
pla`orm
for
Market
Development.
Have
a
bigger
slide
of
a
bigger
pie.
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets

21. ELEMENTS
FOR
DESIGN
OF
ADVANCED
DEVELOPMENT
PROGRAMMES
21
BEING
KNOWING
DOING
THINKING
EIL
• Top
Growth
Generic
Strategies:
– Strategy
1:
Integra5on
of
new
value
chain
steps
– Strategy
2:
Value
deployment
through
new
channels
– Strategy
3:
Old
Growth
LARGE
REGIONAL
FIRMS
IN
THE
CARIBBEAN:
Drivers
of
Growth
and
Opportuni5es
for
Expansion
into
new
markets

22. !
!
Growth
Playbook
of
LRF
in
the
Caribbean
Core
Business
Horizon
1
Adjacent
Space
Horizon
2
Entirely
New
Space
Horizon
3

24. Old
Growth
New
Growth
Organic
Growth
Inorganic
Growth
Growth
Matrix
• Opera5ons
in
New
Loca5ons
• Conquering
new
customer
segments
• New
Products/Services
• New
business
model
• Market
Penetra5on
• Replica5on
• Opera5onal
Effec5veness
• M&A
in
same
sector/
value
chain
step
• M&A
in
related
Markets
• JV
with
tradi5onal
players
• M&A/
JV’s
in
new
value
chain
step
• M&A/
JV’s
of
unrelated
new
businesses
• M&A/JV’s
within
new
channels

25. How
will
your
company
grow
in
the
next
3
years?
OLD
NEW
ORGANIC
INORGANIC
65%
15%
15%
5%
N=11
LDF

30. Angostura
(Alliance)
Kersten’s
Housing
(IJV)
Ansa’s
Water
Treatment
Solu5ons
(Alliance)
Goodard
on
Health
Care
Micro
Insurance
for
BOP
(GF)
Beverage
Company
Access
Colmados
in
DR
(Alliance)
Almonde
Popular
Engineering
(GF)
Massy
Ecosystem
(GF)
Goddard
Enterprises
(IJV)
Grupo
Ramos
Distribu5on
Center
Massy
Energy

33. What
growth
vehicles
are
preferred?
(before
framework)
• Acquisi5ons
• Distribu5on
Alliances
33

34. What
growth
vehicles
are
preferred?
(ajer
framework)
• Organic:
• Distribu5on
Alliances
• Greenfield
• Least
Used:
Interna5onal
JV
34

35. General
Key
Findings
• Conglomerates
less
affected
by
economic
cycles
than
integrated
in
general.
• Growth
dependents
in
managing
around
generally
weak
labor
markets
at
all
levels
• Growth
is
difficult
in
the
Caribbean
because:
– Small
Land
Mass
– Small
Popula5on
– Limited
stagnated
economic
output/growth
– Diversified
culture
– Different
currencies
– Different
legisla5ve
structures
– Spanish,
Danish,
French,
English,
Portuguese
35

36. General
Key
Findings
• First
Mover
Advantage
Vs.
Unique
Mover
Advantage
• Most
short-­‐term
current
growth
is
based
on
the
aLaining
opera5onal
excellent
in
already
mature
markets/businesses
• LRF
are
too
regional
centric.
Global
benchmarks
are
rarely
used.
LATAM
an
exploratory
market
36

37. LRCF
on
Innova5on
• Innova5on
focus:
– Con5nuous
improvement
– Process
innova5on
– Evolve
from
products
to
experiences
• Performance:
– Efficiency:
85-­‐95%
– Innova5on:
5-­‐15%
37

38. LRCF
on
Innova5on
• Fear
of
Cannibaliza5on
(Innova5ons
might
not
create
new
markets
but
cannibalize
exis5ng
ones)
• Success
breeds
conserva5sm
(fear
of
failure)
• Localiza5on
of
assets,
resources,
and
capabili5es
constrain
expanding
behavior
• Technology
is
not
a
mainstream
ingredient
in
growth
trajectories
• Failure
is
punished
38

39. Expected
Geographic
Expansion
• Growth
champions:
– Guyana
– Suriname
– Dominican
Republic
• Highest
poten5al
– Hai5
– Cuba
• LATAM
– Colombia
and
Guatemala
39

40. Why
some
firms
have
used
the
Caribbean
as
growth
pla`orm
• Caribbean
as
a
global
growth
lab
– Administra5ve
distance
– Cultural
diversity
– Economic
distance
• Caribbean
market
as
a
proxy
for
global
market
complexity
but…
– Need
to
increase
produc5vity
– BeLer
environment
for
doing
business
• Long
story
of
fearless
M&A
ac5vity
40

41. LRCF
on
Business
Compe55veness
• Top
5
– Management
Competencies
– Technology
– Invest
in
People
– M&As
and
Partnerships
in
New
Value
Chain
Steps
– Increase
Risk
Appe5te
41

42. Conclusions
General
Current
Approach
• Large
Share
of
the
local
protected
market
• Opportunis5c
to
capitalize
on
opportuni5es
created
by
instability
and
government
policies
• “Me-­‐too”
strategies
imita5ng
foreign
companies
Desirable
Approach
• Pursue
a
dis5nc5ve
posi5on
in
regional
and
interna5onal
markets
• A
long-­‐term
approach
for
compe5ng
in
each
industry
• Create
dis5nc5ve
value
proposi5ons
42

43. Conclusions
General
Current
Approach
• Low
quality
and
efficiency
are
tolerated
• Short
5me
horizon
and
low
investment
in
people,
brands,
and
technology
• Limited
par5cipa5on
in
the
value
chain
with
concentra5on
on
distribu5on
ac5vi5es
Desirable
Approach
• Move
to
interna5onal
best
prac5ces
• Sustained
investment
in
human
resources
and
technological
capabili5es
• Master
the
en5re
value
chain,
including
produc5on,
technology,
IT
and
marke5ng.
43

44. Conclusions
General
Current
Approach
• Wide
product
line
focused
on
local
markets
• Conglomerate
business
groups
opera5ng
in
many
disparate
fields
• Top
down
economic
policy
by
government
Desirable
Approach
• Focus
on
dis5nc5ve
products
to
serve
local
and
regional
markets
• Related
diversifica5on
that
creates
synergies
• Companies
take
a
leadership
role
in
upgrading
their
cluster
and
improving
their
business
environment
44

45.
• The
reality:
Large
regional
firms
don’t
have
deliberate
intended
strategies
to
serve
the
BOP
market.
We
must
create
the
demand
for
BOP
markets.
In
the
English
speaking
Caribbean,
the
pyramid
might
have
a
very
different
shape.