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Cuba: A Realistic Strategy

Aug. 5, 2015
As the normalization of relations between the U.S. and Cuba begins after nearly 55 years of near isolation, former IW senior editor John McClenahen outlines a strategy for achieving significant bilateral trade and investment.

First, let’s start with what Cuba is not. Cuba is not Russia, China, or the Soviet Union of 40 years ago. Cuba is not Iran, Iraq, or Afghanistan. Cuba is not Vietnam. Cuba is not North Korea.

Second, 2015 is not 1961. The world of 2015 is dramatically different economically, politically, and socially. For better or worse—and I believe for the better—information technology continues to accelerate the exchange of data, enables a whole world to watch as events unfold, and makes possible the sharing of values, if not their mutual acceptance.

Third, the future of Cuba is not predestined, economically, politically, or socially.

How then for American manufacturers to approach Cuba in the context of difference and uncertainty? The practical, if somewhat ironic answer, is by following some tried and true principles, principles that involve asking several basic questions.

First, how does Cuba fit into your strategic business objectives? If Cuba is going to be your company’s “market of the month” don’t bother with it. You’ll waste time and a lot of money.

Second, how well do you and your company understand Cuba’s history and culture—and how willing are you to adapt to its particular preferences now and in the future?

Third, do you envision Cuba as a stand-alone market—or do you see it, now or in the future, as an integral part of a Caribbean, Latin American, or global business presence?

Fourth, from what you already know about Cuba as a marketplace, are any of your existing products and associated services likely to appeal to Cuban customers?

Fifth, if necessary are you willing to adapt or create products and services to respond to the demands of Cuban markets?

Sixth, go back to the first question and ask these questions: Can our company afford to provide products and services in the long term? If not now, perhaps in the future? By export from the United States or a Caribbean country? In a joint venture with a Cuban company? Only through a 100%-owned investment?

These questions may sound premature. They are not. Granted, within government and among manufacturers terms of economic and financial normalization have yet to be written, absorbed, and perhaps re-written. The process will take time—perhaps more than some manufacturing executives would like. However, company executives and managers willing to start asking critical strategic questions now—and asking them again and again as circumstances change—will find time to be on their side.

This is another of a series of occasional essays by John S. McClenahen, an award-winning writer who for four decades covered international economics, public policy, and management principles for IndustryWeek and who retired as a senior editor in 2006.

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