Global Environment of Chile

• Sound economic policy-making

• Good infrastructure• Educated workforce• Reliable business

partners and gateway to other Latin American markets

Economic Indicators• Population    16,601,707 (2009

est.) • Below poverty   13.7%• GDP      $181.5 billion (2008)   • GDP PPP  $245.3 billion

(2008)  $237.2 billion

(2007)  $225.7 billion

(2006)• GDP Growth Rate  4 % (2009 est.) • GDP Per Capita PPP  US $14,900

(2008) • Unemployment    7.5% (August-

October 2008)• Investment rate   23.7% of GDP (2008

est.)

• Total Imports    $59.17 billion f.o.b. (2008 est.)

• Total Exports    $69.1 billion f.o.b. (2008 est.)

• Foreign Direct Investment  $108.9 billion (2008 est.) at home $29.98 billion (2008 est.) abroad

• Corporate Tax rate   17% • Inflation Rate 8.8%• Exchange Rates Chilean pesos (CLP)

per US dollar - 509.02 (2008 est.), 526.25 (2007), 530.29 (2006), 560.09 (2005), 609.37 (2004)

Geert Hofstede Cultural Dimensions

• Chile is significantly low in individualism especially compared to the United States

• High degree by which Chileans integrate into closely tied groups will require StorageMart to exemplify a company that strives to enhance the community

• Chile’s high uncertainty avoidance demonstrates the difficulty to penetrate its market. Therefore StorageMart must ensure proper exposure is met

Business Culture• Negotiating tactics are more similar to a

typical American style of doing business (direct questions, lack of gifts etc.)

• The biggest difference is the pace of negotiations; business just takes longer to conduct in Latin America than in the US

• Real relationships must be established between StorageMart executives, Chilean executives, government officials, and local partners to ensure business runs smoothly

• In Chile business culture, relationships and “insider” status are much more important than in the English speaking world.

• Business strategies are often dominated by short-term considerations.

• Business is often opportunistic and should be followed up quickly when the opportunity arises.

• It is not unusual that Chilean business people do not answer emails, faxes, letters or phone. Acknowledging messages is not a common habit and many business people might not respond until there is an opportunity or something definite to answer.

• In person, Chileans are normally formal and polite. As such, they might feel obliged to praise the product or service that the foreigner is offering. However, this does not necessarily mean that they are ready or able to buy.

• Over-promising and under-delivering are frequent. Arrangements should be carefully checked and double-checked.

• Arrive for scheduled appointments on time. • Chileans use two surnames on business

cards – the father’s first and then the mother’s. 

• When addressing the person, use only the father’s surname, e.g. Juan Francisco Montero Marin is addressed as Mr Montero.

• The climate is mainly moderate and dry. Summer months (January and February) are hot and dry with temperatures up to 34 degrees Celsius. 

• Avoid business visits in the months of January and February, as executives and staff tend to be away on leave, slowing down general business activity.