Strategy and Competitiveness in Latin American Markets

Strategy and Competitiveness in Latin American Markets

The Sustainability Frontier

Edited by Urs P. Jäger and Vijay Sathe

Using a combination of thorough research and practical examples, Strategy and Competitiveness in Latin American Markets explains how the concept of the sustainability frontier that the book develops resolves the long-running debate on whether sustainability requires tradeoffs or not. Through its exploration of a variety of sustainability challenges and opportunities, along with various sustainability models, the authors show how the sustainability frontier can be expanded through disruptive innovation, the building of new skills and by other means to secure no-trade off solutions.

Chapter 7: Financial markets

Arnoldo R. Camacho

Subjects: business and management, management and sustainability, strategic management


Many Latin American firms have successfully faced the challenge of the globalization of economies and the internationalization of business. Most of these firms have achieved a sustainable competitive position based mainly on cost efficiency, which enables them to provide products and services as or more effectively and efficiently than their relevant competitors. For some of them, high profitability and a lower risk profile have been the result of business models and practices hard to replicate, which has encouraged local and foreign investment. But the optimization of the financial structure of the company has yet to be fully exploited in most of these and other Latin American companies. This is in part because of their conservative approach to the use of debt, but also the result of the shallowness of their countries’ capital markets. Access to capital markets allows companies not only to increase the availability of equity and to improve the terms of finance, but also to manage and effectively reduce their exposure to market risks. Only when companies and industries are based on true operational and financial efficiency, and not on monopoly rents or government support, can they achieve sustained success and growth in relation to foreign competitors. For companies that have reached the sustainability frontier it would be easier to absorb the trade-offs between economic and environmental/social value creation once they become aware of the gaps.

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