Strategy for the Portuguese-speaking market

Transcription

1 João Araújo José Tenório de Figueiredo Strategy for the Portuguese-speaking market ONE VISION ONE STRATEGY ONE EXECUTION Lisboa Universidade Católica Editora 2014

2 Acknowledgements It is our privilege and honor to have counted on the contributions of so many brilliant and inspiring people during our project. We learned a great deal from those who collaborated with us on our book and gratefully acknowledge our debt to them. We would first like to express our most sincere thanks to our mentor and friend, Professor Julio Rotemberg (Harvard Business School) for his enthusiastic and expert guidance over the course of the nine months we worked together on this book. We would also like to pay a special tribute to those who collaborated with us, especially to Adriano Moreira, Aldo Musacchio, António Martins da Costa, António Saraiva, Bruno Bobone, Carlos Dinis da Gama, Domingos Simões Pereira, Fátima Barros, Jaime Nogueira Pinto, Joaquim Nunes, Luís Mira Amaral, Manuel Ennes Ferreira, Manuel Faria Blanc, Manuel Marín González, Miguel Anacoreta Correia, Miguel Athayde Marques, Miguel Horta e Costa, Miguel Trindade Rocha, Pedro Menéres Cudell, Pedro Motta Pinto Coelho, Pedro Rebelo de Sousa, Pedro Reis, Rui Moreira de Carvalho and Rui Paulo Almas. As a special mention, we would like to express our deepest gratitude to Miguel Anacoreta Correia and Pedro Rebelo de Sousa for their remarkable support and help. Also, we would like to state our recognition of António Martins da Costa and Miguel Athayde Marques for their notable help and feedback provided throughout the project. We would also like to express our thanks to our editor, Nora Khan, for helping us read and proof this book. Support and help from Carlos Brito for assisting us with the design of the cover, is gratefully acknowledged. Finally, we would like to dedicate this book to our Parents for all the help, guidance and love they have always provided us with.

3 Contents Preface by Miguel Athayde Marques 11 Chapter 1 Introduction 14 Chapter 2 Executive Summary Diagnosis of the current situation Going forward: One Vision, One Strategy, One Execution Five critical takeaways of this book 19 Chapter 3 The Portuguese-speaking market a quick overview 21 Chapter 4 Business presence across the Portuguese-speaking countries the case of Portugal Analyzing Portuguese exports to Portuguese-speaking countries Analyzing Portuguese Investment in Portuguese-speaking countries (outward FDI) Portuguese companies relevance in the Portuguese-speaking countries (market share) Brazil and China: a new presence in Portuguese-speaking Africa 37 Chapter 5 Comparative analysis Portuguese-vs. Spanish-speaking market Understanding the Portuguese-speaking countries and Latin American Economies Economic indicators: Exports; Foreign Direct Investment; Local Presence Portuguese vs. Spanish exports Portuguese vs. Spanish Outward Foreign Direct Investment (FDI) Portuguese vs. Spanish companies relevance (market-share) Political strategy Political Consensus Political structure in place Key takeaways from the Spanish experience approaching Latin America 57

4 Contents 7 Chapter 6 Beliefs Audit Corporate, Political and Academic experts 60 Chapter 7 One Vision. One Strategy One Vision One Strategy 68 Chapter 8 One Execution The Economic Pillar Corporate Strategy Economic Diplomacy Commercial Diplomacy The Socio-Cultural Pillar Language Citizen mobility Going beyond the Portuguese-speaking countries The State Building Pillar Help building the State Relationship with International Institutions Education 109 Chapter 9 Risks and Challenges Political and Institutional Risk Portuguese-speaking countries resistance towards investing in other PSCs Risks in the relation between Portugal and the Portuguese-speaking countries Economic Risks 119 Chapter 10 Final observations 122 Chapter 11 List of acronyms 124 Chapter 12 References 125

5 This study was conducted by João Araújo and José Tenório de Figueiredo, in collaboration with Professor Julio Rotemberg, William Ziegler Professor of Business Administration, at Harvard Business School, between September 2011 and August 2012, and was revised and updated in 2014, for the publishing of this book.

6 Minha Pátria é a língua Portuguesa. My homeland is the Portuguese language. Fernando Pessoa Portuguese poet and writer ( )

7 PREFACE Strategy for the Portuguese-speaking market For many people, the first question that comes to mind when confronted with this book is the fact that it is written in English. It may seem surprising that a study that deals with the Portuguese-speaking market, conceived from within, and aiming to stimulate a closer collaboration between nations and companies from the Portuguese-speaking community is not written in Portuguese. The fact that this book evolved from a study conducted at Harvard Business School, authored by João Araújo and José Tenório de Figueiredo, under the guidance of Harvard Professor Julio Rotemberg, has certainly to do with it, but most importantly the book being published in English is a statement. Authors and publisher alike believe that the Portuguese-speaking community, its economy and social/cultural fabric, should be known to the world, and I fully endorse this idea. In fact, it would be wrong to build a language wall around everything dealing with the Portuguese-speaking community, albeit the Portuguese language is spoken by nearly 300 million people. But in an age of open globalization an effort should be made to communicate with the world at large. Knowledge and understanding about the Portuguese-speaking community can only benefit the constituent countries and their populations. We have not seen many efforts in communicating the Portuguese-speaking world in English. The interest exists, judging by a few recent initiatives, notably the issue dedicated to Lusophonia (people, policies, brands and business opportunities) by the influential and trend-setting Monocle magazine a. Taken together, the Portuguese-speaking community is relevant to the world, but even more meaningful it is the relevance to each and every one of the eight countries that constitute it. This community presents the potential to be an extraordinary vehicle of economic and social development for the nations involved, but it must a Generation Lusophonia: why Portuguese is the new language of power and trade. Monocle, issue 57, volume 6, October 2012.

8 12 Strategy for the Portuguese-speaking market learn how to overcome natural barriers and historic difficulties. It is a fact that the Portuguese-speaking community, spread over four continents, has to bridge large distances and a wide dispersion. Much wider, in fact, than the Spanish-speaking community, which is largely concentrated in the Americas. But in today s globalized world, where the Internet has largely cut the notion of space and time bringing together peoples, companies and institutions, geography certainly becomes less of a barrier. In addition, historic difficulties and many present day unnecessary regulatory and administrative fences that exist across the Portuguese-speaking community must be overcome to the benefit of all involved, without which little progress can be achieved. We may ask ourselves at the inception of this book: what makes a community of Portuguese-speaking countries? What are the common interests? What unites and what divides these nations? One thing becomes clear: that the common language we all speak is a phenomenal bond. This leads us to discovering the power of culture proximity in the development of business relations. Well-known authors b, such as Geert Hofsted; Trompenaars & Hampden-Turner; Pankaj Ghemawat; Brett, Behfar, and Kern, and many more over the years, have endeavored to understand the traits of culture on a country by country basis and how these traits impact on business and working relations. Certainly a common language is an important factor in fostering business, though just one among many cultural factors. However, one may perhaps say that the eight nation Portuguese-speaking community is much more than people being able to talk to each other. It is a shared past and history, a fairly common culture, and a joint need to progress and venture into avenues that may bring future wealth and prosperity. All this, while sustaining mutual respect and acknowledging each other s idiosyncrasies and differences. Another striking feature of this book is that the authors often take the viewpoint from Portugal as far as the Portuguese-speaking market is concerned. This is not detrimental to the validity of the study they conducted. Quite the opposite. By bringing their personal knowledge and experience, and adding to it the invaluable opinion collected from 25 respected experts in Portugal, who were interviewed, the study gains much in thrust and insight. Instead of offering a bland, evenly distributed b Hofstede, Geert Culture s Consequences: International Differences in Work-Related Values. Beverly Hills CA: Sage Publications, Trompenaars, Fons, and Charles Hampden-Turner Riding the Waves of Culture Understanding Cultural Diversity in Business. London: Nicholas Brealey Publishing, Ghemawat, Pankaj Distance Still Matters: The Hard Reality of Global Expansion. Harvard Business Review, Vol. 79, Issue 8, September Brett, Jeanne, Kristin Behfar, and Mary C. Kern Managing Multicultural Teams. Harvard Business Review, Vol. 84, Issue 11, November 2006.

9 Preface 13 view of the contribution that each of the eight Portuguese-speaking countries could make to the Portuguese-speaking community, the authors opted to specialize and go deep discussing the role Portugal may play in building the success of the community. Due to its characteristics, Portugal can be a strong hub for bilateral and multilateral relations among, not only the eight community countries, but also other historically relevant nations whose commercial interests in the Lusophone world have emerged, such as China and the European Union. In order to play such pivotal role, Portugal must be able to offer unique value to players in the market, engaging in an uncompromising win-win relationship with the other Portuguese-speaking countries. A thorough analysis is made in what concerns the role played by Portugal over recent decades, the authors offering a candid, frank view, not always flattering for what has been achieved. This book stands out by bringing together three crucial perspectives that are critical in reinforcing and accelerating the power and notoriety of the Portuguese-speaking community. These perspectives: economic, socio-cultural, and institutional (which the authors call State Building) represent One Vision, on which the arguments of the study are built upon. For the first time, in my view, these three pillars are presented in an intertwined, holistic approach. By bringing together in a coherent framework so diverse and yet so important issues derived from the three pillars, like corporate strategy, economic and commercial diplomacy, language, citizenship, education, and public administration, the study innovates insofar as it goes much beyond a book on Business, or Management. It really strikes on the complexity of decisionmaking, and on what must be done to turn companies successful and make States and populations prosperous. What should be done is really the heart of this book. In chapter 8, the authors propose One Execution, detailing for each of the three pillars recommendations that should be carefully considered by business managers, politicians, public administrators, and international officials. Through more than 40 pages in this chapter, the book offers compelling reading and an urge to action. MIGUEL ATHAYDE MARQUES, Ph.D. Professor of Business, Católica-Lisbon School of Business & Economics Former President of ICEP Former President of the Portuguese stock exchange and Executive Committee Member of NYSE Euronext