International Management Trip 2004

 The Monterrey Experience

Our Monterrey experience truly was both educational and exciting.  Our trip coordinator, Laurent Tran recorded his experiences for everyone to enjoy.  Please read along to find out in detail all the exciting and enlightening experiences he and the rest of the IMC trip participants had.

Wednesday, June 12:

Our third day in Monterrey started with Finance Professor Robertan Santillan’s lecture on the transformation of the Mexican Financial sector.

Before 1994 NAFTA agreement, foreign banks were not allowed in the US.  1994 was an election year, in which the Zapatista guerilla movement assassinated a presidential candidate.  As part of the 1994 budget, the Mexican government issued $40 billions in securities.  However, the peso devalued 15%, which increased the government liability held in dollars.  By 1995, $40 billions in maturity debt came due, but the Mexican reserve held only $6 billion, which led to the 1995 Mexican financial crisis.

In 2000, Mexican banks had lost most their market share to B2B loans. As of today, there are no Mexican national banks.

Mexico has the most number of free trade agreements: 11 with 32 countries!!! However, still 90% of trade is within North America. In Mexico, 99% of the companies are small companies, but only contribute to 7% of the exports.

Why is it important to study business opportunities in Mexico?

• Mexico is still developing
• Big Emerging Markets (BEMs)
• Better margin because of less competition (at least for now)
• 2000 miles border with US
• 2^nd Trading partner with US (1^st is Canada, 3^rd is China)
• Good purchasing demographics

In the next 10 year, 25-40 age group:

            In US, only 1 million new comers

            In Mexico, only 10 millions new comers!

Our brain well fed, we had to worry about our stomach again.  To satisfy poor and starving MBAs, we headed to Los Arcos, a truly authentic seafood Mexican restaurant.  This restaurant had white walls with bright colors ornamenting corners, very reminiscent of color schemes found in Mediterranean restaurants.  We ordered an assortment of colorful food, family style.  The succulent dishes only had a short life on our plates, to eventually make its way back to the sea…

We returned to EGADE to join our host students for a lecture on competitive environment.  Some of the students invited us to join them at a local bar to continue our education in Mexican matters…

It was that evening that we learned that 90% of the people in bars in Mexico are single!  Apparently, couples retrieve from the nightlife quite early in the courtship.

So we were, networking with our EGADE counter parts in a really nice bar with live music.  The drinks were twice the size of drinks in Texas, seriously undermining our divine truth that everything is bigger in Texas!  To raise to this challenge, some of us engage on the route to show that if our drinks were not bigger in Texas, we at least could drink more than the local patrons…An individual that shall not be named courageously led the way in this noble quest.

While some were defending Jones’ reputation in social settings, other practiced breaking the ice with the opposite sex.  The harvest summed up to four numbers to further network possibilities during our next visit in 2005.

On to Day 4

 More Information

• Did you know EGADE is located in the richest city in Mexico?  Learn More about EGADE and Monterrey Tec.

• The Rice MBA International Management Club wants your opinion on where its next trip will be.