Assesing Tecnonexo's US Market Entry Strategy Through Organic Growth

1. INTERNAL DOCUMENT: Organic Growth Strategy
Assessing Tecnonexo’s U.S. Market
Entry Strategy through Organic Growth
Buenos Aires
January 2007

2. Table of Contents
I. Executive summary
II. U.S. e-learning Market
III. Suggested markets to explore
IV. U.S. corporate e-learning programs
V. Tecnonexo’s competitive advantage
VI. Findings/Recommendations
I. Appendix I: ESL training market in the U.S.

3. I. Executive Summary

4. There are many things to consider when entering the U.S. market
♦ There is no single large U.S. e-learning market; the market is actually comprised of
numerous smaller niches
♦ The vast majority of firms are custom content players whose competitive advantage is
domain expertise in a specific niche
♦ The most lucrative opportunities are with large companies in general training but less
sophisticated 1st customers might be smaller companies or specialized training for a
business units
♦ It is a small world of e-learning experts which lowers the cost of sales but makes
reputation very important
♦ U.S. market characterized by stricter technical standards and high touch consultative
relationships
♦ Most U.S. firms have their own LMS and competition is fierce in this space making it
more prudent to focus on custom content
♦ Diversity training issues are on the horizon for major U.S. firms but training in foreign
languages is limited
♦ Using Mexico as a stepping stone would make U.S. entry easier
♦ In addition to industry vertical and business process niches, capability and methodology
expertise can be a competitive advantage

5. Tecnonexo must improve its technical capabilities and consulting skills to
compete effectively in U.S. on anything other than low cost
♦ Phase I: Continue growth with Mexico expansion while developing technical and
consulting capabilities (0-18 months)
– Use Mexico as a stepping stone to U.S.
• Large opportunity, close ties to U.S. market, lower technical expectations, Tecnonexo
currently well positioned
– Start with small U.S. businesses where Tecnonexo can be a complete solution provider
• More price sensitive, less influence in e-learning community, more in line with Tecnonexo’s
core competencies
♦ Phase II: Enter the U.S. by targeting a niche and expanding (6-24 months)
– Focus on a niche where Tecnonexo can compete with boutique players
– Expand to adjacent industry verticals or training functions eventually becoming a consultative
integrator

6. II. U.S. e-learning Market
U.S. e-learning industry overview
−Market size/growth
−Target company size
−Market segmentation
Industry trends, 2007
Competitive landscape

7. Introduction
Industry publications and market research
♦ Ambient Insight (www.ambientinsight.com)
♦ ASTD (www.astd.org)
♦ Bersin & Associates (www.bersin.com)
♦ Chief Learning Officer Magazine (www.clomedia.com)
♦ Eduventures (www.eduventures.com)
♦ E-Learning! Magazine (www.b2bmediaco.com)
♦ Elliott Masie (www.masie.com)
♦ HR Institute (www.hrinstitute.org)
♦ IDC (www.idc.com)
♦ Gartner (www.gartner.com)
♦ New England Learning Association (www.nelearning.org)
♦ Simba (www.simbanet.com)
♦ Training Magazine (www.trainingmag.com)
♦ Training & Development (http://www.astd.org/astd/publications/td_magazine)

8. Market Size and Growth
In 2006, e-learning services outsourced to external vendors represented
roughly $11 billion of $109.25 billion in total U.S. training budgets
U.S. Employee Learning & Development Budgets, 2006
$109.25 billion
Internal
learning
$79.75
budgets
External
non-tech $29.5 billion
spending
$10.89 billion
$18.61 $18.61
$10.89 $10.89 $10.89
e-Learning
Total Employee Learning External Services E-Learning
& Development
The proportion of technology-based training-related spending continues its growth as
The proportion of technology-based training-related spending continues its growth as
companies become better able to quantify cost savings and efficiency gains to e-learning.
companies become better able to quantify cost savings and efficiency gains to e-learning.
*Source: 2006 ASTD State of the Industry

9. Market Size and Growth
The U.S. corporate e-learning market has been growing at an impressive >30%
rate for the past several years
Corporate E-learning Training Revenue
Market Share: 2006
Growth Rates: 2004- ‘06
40%
35%
37%
35%
30%
31%
25% 29%
20% 48%
52%
15%
10%
5%
0%
2005- '06 2004-'06
10 Largest Firms
10 Largest Firms
Rest of Sector
Rest of Sector
The growth rate of the smaller firms outpaced the 10 largest e-learning firms in 2006.
The growth rate of the smaller firms outpaced the 10 largest e-learning firms in 2006.
*Source: 2006 Simba Information

10. Market Size and Growth
Though a traditional classroom setting still represents the majority of
training delivery, e-learning is growing in U.S. companies
Training Delivery Methods
2005 2006
Virtual
Online, Other Other
Virtual
Classroom
Self-Study 7% 9%
Classroom
16%
7%
14%
Online,
Self-Study
15%
Instructor-Led Instructor-Led
Classroom Classroom
70% 62%
A year-over-year comparison shows that Online Self-Study more than doubled in 2006,
A year-over-year comparison shows that Online Self-Study more than doubled in 2006,
making it the area of training with the fastest growth.
making it the area of training with the fastest growth.
*Source: Dec. 2006 Training Magazine Industry Report

11. Target Company Size
With bigger budgets and better technology, large companies are more
likely to have adopted e-learning
Training Delivery Methods by Company Size
Instructor-Led Classroom Online Self-Study Virtual Classroom Other
>10,000 employees 57% 24% 12% 7%
1,000 - 9,999 65% 20% 8% 7%
employees
<1,000 employees 62% 14% 15% 9%
Training modules must be designed to teach at least 100-200 students for e-learning to
Training modules must be designed to teach at least 100-200 students for e-learning to
make sense economically.
make sense economically.
*Source: Dec. 2006 Training Magazine Industry Report

12. Target Company Size
71% of large companies outsource some or all of their custom content
development
Custom Content Development Amount
Outsourced by Company Size
No Outsourcing Some Outsourcing Most/All Outsourced
>10,000 employees 29% 62% 9%
1,000 - 9,999 58% 36% 6%
employees
73% 22% 5%
<1,000 employees
Companies outsource custom content development to e-learning firms with a perceived
Companies outsource custom content development to e-learning firms with a perceived
expertise in a specific subject or a technical skill (e.g. simulation).
expertise in a specific subject or a technical skill (e.g. simulation).
*Source: Dec. 2006 Training Magazine Industry Report

13. Target Company Size
Larger companies are the most likely to have invested in an e-learning
infrastructure
Technology Usage by Company Size
LMS
LCMS
75%
75%
51%
50%
37%
28%
24%
25%
11%
0%
1,000 – 9,999 >10,000 Employees
<1,000 Employees
Employees
It is difficult to convince companies to switch away from a legacy LMS; smaller companies
It is difficult to convince companies to switch away from a legacy LMS; smaller companies
are better targets for end-to-end solutions.
are better targets for end-to-end solutions.
*Source: Dec. 2006 Training Magazine Industry Report

14. Market Segmentation
Technology, Education and Financial Services are the industries most
likely to use e-learning
Training Delivery Methods by Industry
Instructor-Led Classroom Online Self-Study Virtual Classroom Other
Technology 52% 23% 18% 7%
Financial /
57% 18% 21% 2%
Insurance
Healthcare 8% 5%
72% 15%
Manufacturing 84% 10% 2%4%
Retail 76% 9% 5% 9%
Education 57% 8% 21% 13%
As a result, there are more specialty e-learning firms currently competing in these industries.
As a result, there are more specialty e-learning firms currently competing in these industries.
*Source: Dec. 2006 Training Magazine Industry Report

15. Market Segmentation
Compliance training converts well into an e-learning format, with 35%
mostly or entirely online
Types of Training Conducted Online
No Online Some Online Mostly Online All Online
Mandatory/
31% 33% 17% 18%
Compliance Training
Industry-Specific
26% 64% 6% 4%
Training
Desktop Application
13% 1%
33% 52%
Training
37% 50% 12% 1%
IT/Systems Training
Mgt./Supervisory
44% 41% 13% 3%
Training
Executive
54% 33% 9% 4%
Development
54% 40% 4%2%
Interpersonal Skills
Customer Service
55% 44% 1%
0%
Training
57% 41% 1%
1%
Sales Training
*Source: Dec. 2006 Training Magazine Industry Report

16. Market Segmentation
Top ten largest niche markets
Mandatory/ Compliance Training
(Technology)
Mandatory/ Compliance Training
(Financial / Insurance)
Industry-Specific Training
(Technology)
Desktop Application Training
(Technology)
Mandatory/ Compliance Training
(Healthcare)
IT/Systems Training (Technology)
Mgt./Supervisory Training
(Technology)
Industry-Specific Training
(Financial / Insurance)
Desktop Application Training
(Financial / Insurance)
Executive Development
(Technology)

17. Market Segmentation
Business process/function and industry matrix
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Mandatory/ Compliance
278 218 182 121 109 97
Training
Industry-Specific
202 158 132 88 79 70
Training
186 146 122 81 73 65
Desktop Application
Training
177 139 116 77 69 62
IT/Systems Training
Mgt./Supervisory
175 137 114 76 68 61
Training
145 113 95 63 57 50
Executive Development
124 97 81 54 49 43
Interpersonal Skills
Customer Service
106 83 69 46 41 37
Training
106 83 69 46 41 37
Sales Training

18. Outsourcing Trends
Outsourcing of custom content development is expected to increase in the
coming months
Planned Outsourcing in Next 12 Months
More Outsourcing
Less Outsourcing
15% 14%
10%
7%
5%
0%
Custom Content
Development
As the benefits of e-learning become better quantified and more widely known, companies
As the benefits of e-learning become better quantified and more widely known, companies
will outsource more content development in areas where they lack internal expertise.
will outsource more content development in areas where they lack internal expertise.
*Source: Dec. 2006 Training Magazine Industry Report

19. Outsourcing Trends
As the e-learning market matures, corporate training is the latest business
function to see a surge in outsourcing
Outsourced Services
Instruction 44%
LMS Operations / Hosting 30%
Custom Content
29%
Development
LMS Administration 24%
Learner Support 23%
Almost 30% of companies outsource at least some custom content development.
Almost 30% of companies outsource at least some custom content development.
*Source: Dec. 2006 Training Magazine Industry Report

20. Outsourcing Trends
Financial / Insurance and Technology are the verticals where outsourcing
to foreign firms is catching on the fastest
Use of Offshore Firms for Custom Content
Development by Industry
Financial / Insurance 13%
Technology 11%
Manufacturing 2%
Healthcare 1%
Retail 0.2%
Education 0%
Outsourced projects tend to be relatively simple in terms of bells and whistles but high-
Outsourced projects tend to be relatively simple in terms of bells and whistles but high-
volume to take full advantage of the difference in labor costs.
volume to take full advantage of the difference in labor costs.
*Source: Dec. 2006 Training Magazine Industry Report

21. Technology Trends
As new learning tools are adopted, the complexity of supporting different
systems increases the desire for an integrated platform
Usage of Learning Tools and Technology
Virtual Classroom 58%
39%
LMS
Application Simulation Tool 30%
Rapid e-Learning Tool 24%
LCMS 13%
EPSS* 12%
Podcasting 5%
* Electronic Performance Support System
*Source: Dec. 2006 Training Magazine Industry Report

22. Summary
As e-learning continues to grow in 2007, content will be developed faster
and will be created more by users and communities
Key Trends Outlook for 2007 from Bersin
While payrolls decreased an average of 11% in 2006, learning organization continue to
Increased spend on technology. A defined outsourcing strategy will lower costs while providing a
Outsourcing
stable technology investment
Talent management will change the role of Human Resources
New Focus
Areas Leadership and management training will be the largest program area spending
Traditional corporate training departments will be less widespread
Centralization Learning will be driven by the central training group, with less emphasis on company
divisions and departments
Content created by and defined by users, who can publish material quickly
Less control over content since there will be more avenues for publication
Content
Management Social networking will be integrated into e-learning programs
Users will publish courses in fraction of time
Courses will be smaller, and created more rapidly --> attractive for today’s media
New
oriented youth
Approaches
Gaming, simulation, and wikis will enhance user experience, and community feedback
*Source: Bersin & Associates 2007 Predictions

23. Summary
The U.S. e-learning industry is highly fragmented, with 1,500-2,000 firms
currently competing
Size of Custom Courseware Vendors
(Number of Employees)
Tecnonexo
♦ There is no single large U.S. e-learning
100-499
50-99 market; the market is actually comprised
6% 500
5%
of numerous smaller niches.
3%
♦ The vast majority of firms are custom
content players whose competitive
advantage is domain expertise in a
specific niche.
26-49
22%
♦ The market sustains so many firms
< 25 because many of these custom content
64%
firms are essentially “one man shows”,
with relationship owners who lack the
cash flow and/or motivation to expand.
* Source: Brandon-Hall.com

24. Summary
There is a long tail of niche players in the U.S. market that Tecnonexo will
initially be competing with
Biggest firms fall into three categories
1. LMS companies
2. Off the shelf content creators
3. Consultative integrators
Firm Revenues
Vast majority of firms are
custom content niche players
whose competitive advantage
is domain expertise
1,500 to 2,000 e-learning companies in the U.S.
If Tecnonexo wants to be competitive in the U.S. market it will have to develop expertise in a niche
to compete with small firms – once this is established, it can build its brand, reputation and
capabilities to eventually become a consultative integrator.

25. III. Suggested markets to explore
Mexican e-learning industry outlook
Opportunities in the Mexican market
Hispanic market in the U.S.
Why Mexico will be a logical first step to further development
Non-corporate market

26. Mexican Opportunity
Mexico and the Mexican Market for Tecnonexo
Population Ciudad Juarez
106 Million People
Hermosillo
Gross Domestic Product
Monterrey
743.07 BN USD (Adjusted)
Internet Users
28 Million internet users
Tijuana
Cancun
Number of Personal Computers
13 Million
Guadalajara
Number of Business PC’s
Puebla
5.1 Million (60% of them with internet access)
Educational Expense as
percent of GDP
Mexico D.F.
7.07%
Key cities to consider
Unemployment Rate
4.02%
Source: INEGI

27. Mexican Opportunity
The Mexican e-learning market is approximately $1.4 B, and consists of
mostly government contracted work*
♦ Value and growth of the market
– Estimated at $1 billion (USD) in 2004 and forecasted to increase 40% by 2006
– Strong growth predicted for the coming years, due in part to the current administrations E-Mexico
initiative and increased corporate learning investment by multinationals, larger Mexican companies
and financial institutions
– Mexican Small & medium enterprises (SME’s) will increasingly demand E-Learning solutions and
custom content
♦ E-Mexico government project
– The national E-Mexico project is aimed at encouraging the use of information technology in Mexico –
one specific objective is to get 98% of the Mexican population on-line by 2025
– One section of the project concerns e-learning
– Currently, there are some 28 million Web users, that is, nearly 27% of the total population
– This increase in Internet use in Mexico points to growing demand for e-learning technology
♦ Business opportunities
– Explore opportunities with larger Mexican companies and with transnational companies in Mexico by
cold calling or leveraging Argentina and Ecuador’s successful ventures through HR manager’s
recommendations
– Position Tecnonexo as idle partner for booming SME’s. Franchising companies a great opportunity.
– Keep abreast of calls for tenders from the Mexican government to find out about new projects under
the E-Mexico project – calls for tenders can be seen at www.compranet.gob.mx
– Explore potential synergies with ILCE (a multilateral organization with presence in LATAM and HQ in
Mexico) – they provide most of the content for the Mexican Government
*Source: Government of Quebec; http://www.mdeie.gouv.qc.ca/page/web/portail/en/exportation/nav/market_sheets.html?page=details.jsp&iddoc=55765

28. Mexican Opportunity
Corporate opportunities in Mexico
♦ What to expect
– Still an underserved market but increasing competition from foreign competitors (CISCO, TATA,
and smaller cross-border e-Learning companies from the U.S.)
– Mexicans are not very used to training for their benefit, but they will engage in training required
by their companies
– Many Universities (UNAM, IMAC, ITESM, UAdeG, etc.) are engaging in content creation and
delivery methods for companies
– Mexican government a very big player (E-Mexico, PEMEX, CFE, CNA)
– SME’s are great targets, however will have to educate them in the benefits of e-Learning and
presenting content in an intuitive, pedagogical way
♦ If Tecnonexo were to enter the Mexican Market
– Building a physical presence in the country will be important because high physical interaction is
expected during the sales process
– There is a hierarchical decision making process in large companies so work your way up
through the ranks
– Active participation in chambers, organizations, symposiums and conferences highly
recommended to network, show commitment to the market and gain visibility
– Mexico is a franchising leader in the region, and they are growing very fast. Use solution selling:
These companies represent an interesting opportunity to provide E-training
– Crucial for Tecnonexo to engage in direct relationship with the people providing the content.
Content is more valuable than technology for Mexican companies

29. Mexican Opportunity
Mexico – Some of the “Big Boys”
Name Employees Countries Industry Trademarks
PEMEX 145,427 MEX Oil Pemex Gas, Refinacion
Grupo CARSO 160,000 MEX, USA, LATAM Conglomerate Telmex, Telcel, Sanborns,
Sears, Cti, Banco Inbursa
CFE 79,969 MEX Electricity Electricidad
CEMEX 51,771 USA, LATAM, EurAsia Cement Construrama, Patrimonio
Hoy
FEMSA 90,731 USA, LATAM Beverages Coca Cola, Jugos Del Valle
BBVA-Bancomer 60,000 MEX Banking Bancomer
BANAMEX 59,000 MEX Banking Banamex/Citibank
Grupo ALFA 38,315 MEX, USA, AmCentral Conglomerate Alpek, Sigma, Onexa
Grupo BAL 39,856 MEX Conglomerate ITAM, Palacio de Hierro
Grupo Mexico 19,143 MEX, PER Mining Grupo Minero, Ferrosur
Grupo BIMBO 81,072 MEX, USA, ESP, ARG Food Bimbo, Marinela
Grupo Salinas 50,871 MEX, USA Retail/Congl. Elektra, TV Azteca, Banco
Azteca, Iusacell, Unefon
Comercial Mexicana 35,837 MEX Retail Comercial Mexicana,
Sumesa, COSTCO
Grupo Posadas N.D. MEX, USA, ARG, BRA Leisure Mexicana, Hoteles
Posadas, Caesar Park
CIE N.D. MEX, USA, ARG, BRA Entertainment Ticketmaster, OCCESA
Aeromexico 10,000 MEX, USA, UE Airline Aeromexico, Aeromar

30. Mexican Roadmap
Roadmap to enter the Mexican market
♦ Option A: Office of Representation with No Income (ORNI)
– This is the equivalent to a sales agency. Any transaction will be done between the Mexican
company and Tecnonexo Argentina. The Mexican company can deduct the payment under
Rule 2.4.31 of the Federal Tax Miscellaneous
– This will minimize the people that are necessary in Mexico (Accounting, Bookkeeping) while
allowing Mexican companies to physically perceive Tecnonexo’s presence in the country
– Certain formalities such as registry in the National Registry of Foreign Investments and filings
before the tax authorities are required
♦ Pros:
– Lower cost alternative to incorporating. Will allow for an initial exploration, yet more formal
incursion into the Mexican market. Less paperwork than to have everything sourced from ARG.
No employee liability in Mexico, no hassles with social security (labor laws are harsh)
♦ Cons:
– Some companies might prefer dealing with a Mexican company. Many government contracts
might not be open to bidding by foreign companies. Many day to day items are easier to deal
with a Mexican company (local employees payroll, lease of equipment)

31. Mexican Roadmap
Roadmap to enter the Mexican market
♦ Option B: Incorporation of a Mexican subsidiary
– Creation of a legal entity in Mexico, either a S.A. de C.V. or a S. de R.L. de C.V.
– If the Mexican market is profitable for Tecnonexo, eventually it will have to incorporate.
– The whole process can take more than 40 days from start to finish. It requires a fair amount of
formalities and consequences that need to be further discussed with a Mexican lawyer
– It only makes sense to incorporate in either Mexico City or Monterrey, because of the
concentration of company headquarters and ease of travel to other parts of the country
♦ Pros:
– More solid structure creates positive signaling to Mexican companies. Transfer pricing between
Mexico and Argentina to take advantage of tax benefits. Easier to obtain credit, leases, and to
hire more than a few employees. More international positioning for Tecnonexo
♦ Cons:
– Incorporation is more expensive, takes more time and demands administrative staff

32. Mexican Roadmap
Roadmap to enter the Mexican market
♦ Option C: Partnership with a Mexican company
– Create a joint venture agreement between Tecnonexo and a Mexican company
– The characteristics of the partner company must be a company that deals with corporate training and
that has not explored the E-Learning solution, however is aware of its potential and recognizes
Tecnonexo as a leader in Latin America
– This will allow Tecnonexo to leverage their brand name and value proposition, without competing with
the Mexican company’s offering, thus aligning incentives, and not resulting in another partnership
fiasco for Tecnonexo.
– It will be hard to find a decent sized company with these characteristics, and especially hard to find
this without deeper knowledge of the Mexican Market.
♦ Pros:
– Very low cost solution to begin exploring the Mexican Market. Tecnonexo’s leadership in LatAm can
be better leveraged with a Mexican company than with an American company
♦ Cons:
– Hard to find a company that fits the profile. It can take a while before they truly understand
Tecnonexo’s value proposition. Tecnonexo can not capture the Whole PIE that they could alone.

33. Mexican Roadmap
How much will it cost Tecnonexo? – Some rough numbers
Incorporation of an ORNI: Incorporation of a Company (SA de CV or S de RL de CV):
Legal Fees/Permits $ 5,000 USD : Legal Fees/Permits $ 10,000 USD :
Employees: Employees:
Directors: Directors:
Argentinean Salary + $ 36,000 USD Argentinean Salary + $ 36,000 USD
Ex-Pat Bonus $ 30,000 USD Ex-Pat Bonus $ 30,000 USD
Staff: Staff:
Manpower Outsource $ 10,000 USD Administrative $ 8,000 USD
Salespeople (x2) $ 24,000 USD plus comm. Salespeople (x2) $ 24,000 USD plus comm.
Office: Office:
B+ Office space B+ Office space
$ 24,000 USD $ 24,000 USD
Polanco/Lomas/Insurgentes Polanco/Lomas/Insurgentes
Office Costs: Office Costs:
Telephone $ 5,000 USD Telephone $ 5,000 USD
ADSL Internet $ 1,000 USD ADSL Internet $ 1,000 USD
Furniture $10,000 USD Furniture $10,000 USD
Supplies $10,000 USD Supplies $10,000 USD
Company Car $ 8,000 USD Company Car $ 8,000 USD
Trade Organizations Trade Organizations
AMIPCI, AMITI, etc. $ 300 USD AMIPCI, AMITI, etc. $ 300 USD
----------------------------------------------------------------------------------- -----------------------------------------------------------------------------------
TOTAL (Per Year in USD) $168,000 USD
TOTAL (Per Year in USD) $165,000 USD

34. Mexican Roadmap
Mexico sales forecast and assumptions
Sales Forecast 2007 2008 2009 2010 2011
Assumptions to Consider
Transnational Companies
Revenues 50,000 250,000 500,000 700,000 800,000
Experts: e-Learning in Mexico will grow
♦
Clients 1 5 8 10 11
very rapidly for next 3 years, specially for
larger Mexican companies and SME’s
Large Mexican Companies
Revenues 45,000 350,000 450,000 550,000 650,000
Clients 3 8 10 12 14
Transnational companies are educated
♦
SME Mexican Companies
about e-Learning opportunities, it will take
Revenues 200,000 320,000 550,000 750,000 1,100,000
a lot more to sell. Forecast underestimates
Clients 10 15 25 35 50
corporate premium
Mexican Government (All areas)
Revenues 80,000 300,000 480,000 700,000 800,000
Clients 2 6 8 10 10
Franchises (prime e-Learning clients) will
♦
grow 17%, have been steadily growing
Mexican NGOs
Revenues 10,000 20,000 30,000 45,000 60,000
Clients 1 2 2 3 3
Government is harder to get in, but they
♦
Multilateral Organizations in Mexico will pay a premium and quickly assign a
Revenues 40,000 80,000 150,000 180,000 200,000
hefty project quota. 2006 – 2012 cycle.
Clients 1 2 3 3 4
Schools
Local NGO’s are not big players, and
Revenues 0 10,000 30,000 80,000 150,000 ♦
mostly corporate Spin-offs
Clients 0 1 3 8 15
TOTAL REVENUE 425,000 1,330,000 2,190,000 3,005,000 3,760,000
Schools have great potential, yet small
♦
TOTAL CLIENTS 18 39 59 81 107
budgets

35. U.S. Hispanic Market
The Hispanic market in the U.S.
In the U.S., there are nearly 41 Million
♦
foreign born immigrants and over 75% from
them come from Latin America & the
Caribbean. Unauthorized Naturalized
Immigrants Citizens
11.1 Million (30%) 11.5 Million (31%)
74% of Hispanics connect to the Internet
♦
every day and 78% access the Web from
home. Temporary
Legal Residents
1.3 Million (3%) Legal
Hispanics are currently spending 55% of Permanent
♦ Refugees
Residents
their online time on Spanish sites. 2.6 Million (7%)
10.5 Million (28%)
Hispanics purchasing power in the U.S. 46% of Hispanics are Spanish-dominant speakers, 23%
♦
are bilingual, 63% speak Spanish at home
surpassed the $800 BN frontier.
Marketers have focused on Hispanics acculturating vs. assimilating. Now: Retro-Acculturation.
♦
U.S. society wants Hispanics to assimilate: Create a diverse, yet national culture.
♦
Hispanics want to preserve their roots: They usually live in Ethnic Enclaves (Ghettos), holding on to
♦
their language and customs.
The Result: In many cities throughout the U.S., Spanish dominant consumers are able to live and work
♦
without having to learn English or give up their culture and traditions. It is better if they are trained in
English, yet they retain more if they are taught in Spanish.
Source: Transpanish

36. U.S. Hispanic Market
Potential sources of opportunity in the U.S.
♦ Hispanic diversity in the workplace (Develop a product with Tecnonexo’s expertise)
– Educate the customer on the differences that exist within their Hispanic employees, positioning
Tecnonexo as the one company that understands different cultural/ethnic backgrounds labeled
under a broader “Hispanic” category
– Similar in offering to Global Training (www.global-training.com), which teaches about diversity in
the workplace, yet dedicated exclusively to understanding Hispanics
– Educate about diversity within the Hispanic diversity. There are at least 14 distinct groups that
make up the Hispanic/Latino American population, whose members trace their lineage to North
America (Mexico and the Caribbean), Europe (Spain), and South America, as well as from the
isthmus of Central America
♦ Minority (Hispanic) supplier training programs
– Provide e-learning solutions for large corporations who have a minority supplier business program,
which includes Hispanic businesses
– It is large companies’ best interest that their suppliers are well trained and understand the policies
of the client company. To ensure this, some content in Spanish and a thorough understanding of
the Hispanic/Latino population in the U.S. might be desired
– Potential partnerships include U.S. Hispanic Chamber of Commerce, National Minority Supplier
Development Council, among others
– Areas of opportunity are Quality Assurance, Operations, Client Company Culture

37. U.S. Hispanic Market
Mexico can be a logical first step to entering the U.S.
Mexico is the Latin American country with the largest number of domestic transnational
♦
companies
Competitiveness in Mexico is pursued very aggressively by multinational companies
♦
Mexico has the largest number of American companies (2600) and the largest FDI from the U.S.,
♦
which means there is a great potential of cross selling to U.S. counterparts
Tecnonexo enjoys good reputation in the Mexican market because of media coverage and self
♦
published e-learning magazine
Mexico is the largest economy in the region (followed closely by Brazil)
♦
There is more assimilation of U.S. culture in Mexico than in any other country in Latin America
♦
The Hispanic market in the U.S. is comprised of 66% Mexican origin immigrants, therefore a
♦
presence in Mexico can provide some leverage when pitching to the U.S. about understanding
the Mexican/Hispanic market
There is a better competitive landscape in Mexico, therefore the experience gained in that
♦
market will be useful when entering the U.S. market in full force.

38. Non-Corporate Market
Tecnonexo also works with non-corporate organizations, and continues to
grow in this market since its entry in 2006
PAHO
PAHO
Staff Development Unit
Staff Development Unit Current Non-corporate Clients
Current Non-corporate Clients
UNDP (Argentina)
UNDP (Argentina)
World Bank (US)
World Bank (US)
Pan American Health
Pan American Health
Unidad de Género,
Unidad de Género, Organization (US)
Knowledge Organization (US)
Knowledge
Legal Affairs
Legal Affairs Operation Unit
Operation Unit
Grupo Étnico y Salud
Grupo Étnico y Salud
Fundación del Saber (Panama)
Fundación del Saber (Panama)
AMIA (Argentina)
AMIA (Argentina)
Fundación CDI (Argentina)
Fundación CDI (Argentina)
ASAE (Argentina)
ASAE (Argentina)
World Health
World Health
Organization
Organization World Health Organization
World Health Organization
Several new projects and clients have been referred to us as a
result of our success with PAHO, our first NGO client in 2006;
leading to one of our largest current projects, The WHO

39. Non-Corporate Market
Characteristics of the non-corporate market that make it attractive
♦ There is a significant opportunity to leverage past successes in the non-
corporate market in the U.S. because of the highly networked nature of the
industry
– skjd
♦ The government bid process is highly consolidated such that once Tecnonexo
gets approval as a preferred service provider they will be invited to bid on a wide
array of projects
– Key U.S. government vendor approval organizations for e-learning (www.usalearning.gov)
• Office of Personnel Management (OPM) – Training Management Assistance (TMA) – Go
Learn (www.opm.gov/hrd/tma)
• Foreign Service Institute (FSI) – (http://www.state.gov/m/fsi/)
• Fastrac (http://www.wbtrain.com)
• National Technical Information Service (NTIS) www.ntis.gov
♦ The partnership model still may hold promise in this industry because of the
vendor selection process
– If Tecnonexo cannot get on the list of government approved vendors it may be possible to
become a subcontractor for firms that are and still maintain brand visibility and profit margin
• Advanced Distributed Learning (ADL) – (www.adlnet.gov)

40. IV. U.S. corporate e-learning programs
Structure of e-learning deployments
Foreign Language Opportunity
Vendor Selection
Technical Superiority
Evaluation Methodology

41. Interviews conducted with decision makers in a variety of industries
♦ Boeing: Jon Schneider, Worldwide Learning Training and Development Leader
♦ Bank of America: George Selix, Service Delivery Executive for Global Human
Resources Technology
♦ Carrier (a United Technology Company): Patrick Preux, Vice President of Human
Resources and Brenda Keaton, Vice President of Leadership and Development
♦ General Motors: Donnee Ramelli, CEO of GM University
♦ Intel: Coco Yackley, Human Resource Chief Information Officer
♦ Hawaiian TelCom: Tom Pipal, Director of Corporate Training
♦ Tesoro: Bill Thomson, Manager of Learning Solutions
♦ Dell Computer: Paul McKinnon, Sr. Vice President of Human Resources
♦ Accenture: Dan Bielenberg, Accenture Capability Development Strategy
♦ e-learning Consultant: Ann Marion
♦ W.R. Grace: Craig Walloch, Manager of Technology Transfer and Training

42. Structure
Structure of e-learning deployments for U.S. companies is maturing
Impossible to
compete
Best opportunity,
General Training
but most stringent
(Compliance/Regulatory, Business ethics, New Employee Orientation) RFP process
Less
Business Unit #1 Business Unit #3 stringent RFP
Business Unit #2
process
♦ New product training ♦ Technical skills
♦Supervisory skills
♦ Technical skills ♦ Sales training
♦ Health and safety
♦ Customer training
As the e-learning market matures there will be more unified technology
platforms and a more consolidated vendor selection process increasing
the importance of the corporate training department

43. Structure
The maturation of U.S. e-learning industry and what it means to Tecnonexo
♦ Major companies are investing in one Learning Management System that can
handle worldwide e-learning needs
– The ability to easily integrate with these systems will be imperative
– Tecnonexo needs to keep up-to-date on how to integrate with U.S. LMS systems (ie be SCORM
and AICC compliant)
♦ Purchasing process will become more defined forcing business units to select
vendors dictated by the corporate training department
– Corporate training department will be making the majority of vendor selections for business units
– Tecnonexo should target a niche in general training where it can create contacts within
corporate training departments
– Tecnonexo can use this foot in the door to sell into individual business units and other areas of
the business
♦ These trends are just starting to take effect and it is important to note that there
is still a long way to go (5+ years) before they become a reality
– Still it is important for Tecnonexo to position itself correctly from the start while still maintaining
the entrepreneurial spirit kept them agile and flexible in the short term
– LMS is becoming a commodity in the U.S. and so therefore not worth wasting resources on for
the U.S. market – a partnership with a major LMS provider might be a better option

44. Foreign Language
U.S. e-learning opportunities in foreign languages are limited
♦ Individual business units make the majority of the custom content purchases and
see little need to purchase e-learning in a foreign language
– There is no market for foreign language specific training in U.S. based business units
– Tecnonexo should approach the foreign business units directly (i.e. Mexico)
♦ Training in foreign language purchased by U.S. based firms is generally a mere
translation of a module that was developed in English
– The only value in a U.S. based firm hiring an e-learning company that specializes in foreign
language is for translation (low value)
• The exception to this would be if Tecnonexo could provide language-diversity needs for any
language so that firms that need things in multiple languages could have one service
provider addressing all of their language-diversity needs (Spanish, Portuguese, Chinese,
Vietnamese, etc.)
– Tecnonexo should avoid selling itself as a foreign language expert but might consider doing
some translation as a way to get a foot in the door (entry tactic – not long-term strategy)

45. Foreign Language
Technical terminology ESL holds promise
♦ e-learning is becoming more widely adopted and the business world is becoming
more global
– The need for effective cultural training among multinationals is increasing
– Technical ESL to train employees on technical terms (generally English) that are used globally
becoming important (especially for companies that manufacture globally)
♦ Cultural training
– Content provided by the company and Tecnonexo to train employees on different cultures and
more effective interaction techniques
♦ Technical ESL
– The content would come from the client but Tecnonexo would have to hire technical/language
experts, which will increase up-front costs
– Some of content could be reused for future projects in that same industry
– Secure a relationship with reputable, credible sources of technical expertise where a projects
might take place and hire once the project is sold
Source: U.S. Census Data, 2004

46. Foreign Language
Experts agree that learning English increases productivity or at least the
perception of worker ability
♦ Kossoudji (JLE, 1988):
– Employers perceive English language ability as positive signal of worker ability;
reduces the “general uncertainty about productivity” and provides “extra signal
that, by overcoming the language barrier, [English speakers] have higher levels
of ability and drive than the average person with the same measured
characteristics.”
♦ Carnevale et.al.:
– Economists “assume that English ability is a skill that makes a worker more
productive and, hence, brings greater rewards in the U.S. labor market”
– “…after having achieved a given level of understanding of the spoken word,
then improved skills in speaking, reading, and writing do matter to employers”
and can lead to “subsequent incremental increases in productivity”
♦ Mason:
– Mexican-Americans NOT fluent in Spanish “receive an annual premium of 13%,
more than $1,200 per year”
– Is English acquisition attractive to employers beyond workplace proficiency –
economic AND ethno-social assimilation?
Source: Kossoudjj, Carnevale, Mason

47. Vendor Selection
Vendors are selected because of expertise and technical execution
♦ When companies outsource their content development to a third party provider,
they must be convinced that:
– Integration will be smooth (technical compatibility and execution)
– Third party has expertise not possessed in-house
♦ Top 5 vendor selection criteria (order shifts in importance depending on project)
Subject Matter Expertise: industry vertical, business function
–
Quality: references, demos, instructionally effective, adult education, edutainment
–
Accuracy: no mistakes, professional looking
–
Easy to work with: frequent reviews, good use of in-house experts, professional interaction
–
On-time delivery
–
♦ Flawless technical execution in the U.S. is a minimum expectation
– Server problems, crashes, bugs, etc. are not tolerated and will immediately eliminate you from
any bid process or preferred vendor list
– Technonexo needs to invest in the proper technical infrastructure and quality assurance if they
want to enter the U.S. market as anything other than a low cost provider
*Source: Dec. 2006 Training Magazine Industry Report

48. Vendor Selection
Sourcing gets more sophisticated as companies get larger
Small Firms Medium/Large Firms Large Firms
Shop vendors for Issue request for Form a partnership
• • •
each individual proposal with one system
project with very periodically and integrator that in
little coordination of create a short list of turn sources to
entire e-learning preferred vendors other providers
solution for use on different when the request is
projects beyond capabilities
More price sensitive
•
Sophisticated LMS Few e-learning
• •
Less sophisticated companies even
•
selection process Rigorous selection have this capability
•
process
The greatest opportunity will be with the larger firms but Tecnonexo does not currently have the
capabilities necessary to compete so it will have to start out with small to medium firms and move
up the value chain

49. Vendor Selection
Companies prefer to have a few e-learning vendors because of steep
learning curves and high switching costs
♦ More companies are looking for e-learning “partners” with the capability to
implement comprehensive solutions that and help shape e-learning strategy
– Building a variety of skills in different areas will be important
♦ Because e-learning vendor switching costs are very high, companies tend to
conduct thorough vendor evaluations, complete with on-site visits, reference
checks, and reviews of sample content
– RFPs typically used if high-volume content is needed
– May also retain a few (2 or 3) trusted contractors for smaller, one-off learning projects
– Big companies and big projects will have long difficult sales cycles
♦ Because of the high perceived risk in selecting an e-learning partner you must
come off as a reliable, trusted advisor
– Beware of unhappy customers because it is difficult to overcome a poor reputation

50. Vendor Selection
It’s a small world: Industry groups and organizations
♦ E-learning professionals from the largest companies are part of a small highly
networked group that share information making referral and reputation important
– Few RPP’s, cold calls difficult
– Generally trusted vendors started out by doing a small piece of work very well
– Imperative to not ruin your reputation before it is built
Organizations Identified by Interviewees
♦ ASTD – American Society of Training and Development (www.astd.org)
– ASTD Benchmarking Forum (http://www.astd.org/astd/Research/benchmarking_forum)
♦ Chief Learning Officer (www.cloevents.com or www.clomedia.com)
♦ Elliott Masie – Industry thought leader (www.masie.com)
♦ ISPI – International Society for Performance Improvement (www.ispi.org)
♦ E-learning Guild (www.elearningguild.com)
♦ Corporate University Exchange (www.corpu.com)
♦ ACM – Association for Computing Machinery (www.acm.org)
– eLearn magazine (www.elearnmag.org)

51. Technical Superiority
E-learning currently most suited for lower order cognitive skills on Blooms
Taxonomy such as knowledge transfer and basic comprehension
Learning Objectives
Blooms Taxonomy
To make judgments, defend
Synthesis
opinions, and combine information
&
in different ways to solve problems
Evaluation
To solve problems in new situations
Application
by applying previously acquired
&
Analysis knowledge
Knowledge
To recall and demonstrate
&
understanding of facts, terms, basic
Comprehension
concepts and ideas
Trend: As e-learning becomes more interactive and provides the ability to simulate complex
work scenarios it will start to be used more and more for higher order skills training

52. Technical Superiority
Creating technical superiority to deliver more e-learning training for more
complex skills could be a competitive advantage
♦ Enabled by advancements in learning technology
– Increased bandwidth
– More sophisticated simulations
– Advancements in gaming technology including more sophisticated logic trees, graphics and
storytelling
– “Smart” programs that identify how each individual learner learns best and adapts over time
♦ These advancements are being used more and more to teach higher order
cognitive skills
– Less complex training is becoming commoditized and is increasingly sent offshore to India
– Tecnonexo could develop a unique technical ability as a potential niche and differentiator

53. Evaluation Methodology
How corporate training is evaluated: Kirkpatrick Scale
Evaluation tools and methods Relevance and Practicality
Description and
characteristics
What they thought and felt Post training surveys or Quick, easy to obtain but time
questionnaires consuming to analyze
Reaction of the about the training
Student
The resulting increase in Assessment tests before and Relatively simple to set up for
knowledge or capability after the training clear cut quantifiable skills,
Learning more difficult for complex
learning
Extent of behavior and Observation and feedback from Behavioral change requires
capability improvement & the manager 90 days later to cooperation of line managers
Behavior assess change in behavior and can be time consuming
implementation/application
Impact assessment via the
The effects on the business Very difficult to set up a way
management systems already in
or environment resulting to directly attribute to training
Results place
from the trainee's but if possible very effective
performance
Developing methodologies to help clients measure behavioral change and attributable results of e-
learning programs can solve a customer pain, increase sales and become a competitive advantage

54. Evaluation Methodology
Creating a sophisticated proprietary methodology for measuring results of
e-learning deployments could be a competitive advantage
♦ e-learning most easily justified in budgets when impact can be quantified
– Find a niche with measurable business processes (ex. Sales)
♦ Companies historically have viewed training as an employee “benefit”
– Need to convince customers that training is an “investment”
♦ Moving down the Kirkpatrick scale to help your customers start measuring
behavior and results could be a potential niche

55. V. Tecnonexo’s Competitive Advantage
SWOT analysis
Lessons learned from U.S. market entry

56. SWOT
SWOT
Latin America U.S.A.
Strengths Strengths
♦ ♦
– Market leader position; reputation and brand – Exchange-rate driven cost advantage
name
Weaknesses
– Experience in various niches – many more ♦
implementations than competition – No reputation or brand name
– Ability to act as integrator, managing
– Lack of subject matter expertise
subcontractors and offering an end-to-end
– Technological infrastructure, both internal and
solution
client-facing
– Scale and expertise to handle large projects (e.g.
– No in-person sales presence; limited U.S.
Argentine IRS)
sales experience
– Stigma of offshore outsourcing as low-cost (as
Weaknesses
♦
opposed to high perceived quality)
– Technological infrastructure, both internal and
client-facing
Opportunities
♦
– End-to-end solutions for smaller companies
Opportunities
♦
adopting e-learning for the 1st time
– Mexico – Companies previously serviced through
– NGOs partner
– Trusted provider of custom content to large
Threats companies with established e-learning
♦
– Large foreign firm (e.g. Tata) to seriously make a
Threats
play for the Latin American market ♦
– Disaster affects servers with no backup – Exchange rates change, evaporating cost
advantage

57. SWOT
SWOT Takeaways
♦ Currently, Tecnonexo has a vastly stronger competitive position in LatAm than in
the U.S.
♦ Without differentiating expertise in a particular industry topic or technical aspect,
Tecnonexo’s primary strength in the U.S. is its cost advantage
♦ In order to overcome the company’s current competitive disadvantages and
establish a foothold in the U.S. market, Tecnonexo should:
– Initially focus on small to mid-size U.S. companies who are price-sensitive and currently not
offering e-learning
– Leverage relationships with LatAm clients who have presence in the U.S. to make contacts,
become included in searches
– Approach U.S. clients formerly served through partners, as Tecnonexo will have some initial
credibility when describing firm capabilities and approach
– Use Mexico as a gateway to the U.S. market

58. Partnership Model
Growth in the U.S. has been stifled by distance, a lack of a dedicated sales
force, and poor partner relationships
Key Issues: Barriers to execution:
Substantial physical distance between Argentina and U.S.
Distance
Distance No local presence; difficulty in building consultative client relationships
Cultural and language differences
No dedicated salespeople “on the ground” in U.S.
Sales Force
Sales Force Sales force must understand both Latin and U.S. culture
AXG regarded by partners as a low-cost, last-minute outsourcing option
Partnership
Partnership
Low visibility, low collaboration, little control
focus
focus
Prevention of building consultative client relationships

59. Partnership Model
To move to a higher point in the industry value chain, Tecnonexo must own
its client relationships
♦ Discontinue partnership model in order to “own” relationships
– Consultative, high perceived quality approach allows for higher fees
– “Trusted partner” long-term client relationships represent recurring revenue streams
– Cross-sell potential within client organizations
Solution
Solution
♦ Target acquisition of U.S. firm with strong “front office”, while sourcing technical
work to Argentina to capitalize on cost savings
– Achieve efficiencies by increasing scale, spreading fixed costs across larger client
base and utilizing capacity of Argentine back office
– Acquiring U.S. and European-based sales and relationship management functions
while maintaining offshore back offices is the model being used by Indian
companies such as Tata and NIIT
♦ Build a strong sales force from scratch that is on the ground and able to build
the necessary consultative client relationships

60. VI. Findings/Recommendations

61. There are many things to consider when entering the U.S. market
♦ There is no single large U.S. e-learning market; the market is actually comprised of
numerous smaller niches
♦ The vast majority of firms are custom content players whose competitive advantage is
domain expertise in a specific niche
♦ The most lucrative opportunities are with large companies in general training but less
sophisticated 1st customers might be smaller companies or specialized training for a
business units
♦ It is a small world of e-learning experts which lowers the cost of sales but makes
reputation very important
♦ U.S. market characterized by stricter technical standards and high touch consultative
relationships
♦ Most U.S. firms have their own LMS and competition is fierce in this space making it
more prudent to focus on custom content
♦ Diversity training issues are on the horizon for major U.S. firms but training in foreign
languages is limited
♦ Using Mexico as a stepping stone would make U.S. entry easier
♦ In addition to industry vertical and business process niches, capability and methodology
expertise can be a competitive advantage

62. Tecnonexo must improve its technical capabilities and consulting skills to
compete effectively in U.S. on anything other than low cost
♦ Phase I: Continue growth with Mexico expansion while developing technical and
consulting capabilities (0-18 months)
– Use Mexico as a stepping stone to U.S.
• Large opportunity, close ties to U.S. market, lower technical expectations, Tecnonexo
currently well positioned
– Start with small U.S. businesses where Tecnonexo can be a complete solution provider
• More price sensitive, less influence in e-learning community, more in line with Tecnonexo’s
core competencies
♦ Phase II: Enter the U.S. by targeting a niche and expanding (6-24 months)
– Focus on a niche where Tecnonexo can compete with boutique players
– Expand to adjacent industry verticals or training functions eventually becoming a consultative
integrator

63. Tecnonexo needs to start off as a niche player with domain expertise and
slowly build the skills, scale and reputation to be a consultative integrator
Biggest firms fall into three categories
1. LMS companies
2. Off the shelf content creators
3. Consultative integrators
Firm Revenues
Vast majority of firms are custom
content niche players whose
competitive advantage is domain
expertise
1,500 to 2,000 e-learning companies in the U.S.
Tecnonexo can’t compete with current U.S. based consultative integrators because they have
higher perceived quality and does not want to compete with foreign consultative integrators
because that is all about price

64. Business process/function and industry matrix
g
in
nc /
y
r
re
ra al
tu
n
og
e
tio
su ci
ca
ac
ol
In a n
a
th
uf
hn
uc
l
ai
n
al
an
Fi
c
Ed
t
He
Re
Te
M
Mandatory/ Compliance
278 218 182 121 109 97
Training
Industry-Specific
202 158 132 88 79 70
Training
186 146 122 81 73 65
Desktop Application
Training
177 139 116 77 69 62
IT/Systems Training
Mgt./Supervisory
175 137 114 76 68 61
Training
145 113 95 63 57 50
Executive Development
124 97 81 54 49 43
Interpersonal Skills
Customer Service
106 83 69 46 41 37
Training
106 83 69 46 41 37
Sales Training
Penetrate and propagate strategy to move into adjacent markets (example: Plateau started with Red
Cross and Navy and now is a major industry player)*

65. Tecnonexo focused on custom content development and technology
infrastructure in but in the U.S. services will become more important
Vendor Positioning in E-learning Segments
Custom Content Developers
(CCC) Infrastructure Providers
Content
Technology
Digitalize content provided by Design, implement and
customers using in-house WBT Systems
Skilllsoft support LMS systems and
Interwise
development methodologies to Logic Bay
NIIT other software that manages
WebEx
OUtStart
optimize learning experience Netg and administers the training
OneTouch
Vuepoint
Global Knowledge content
Content Sellers AXG (LatAm)
Create and sell their own GP e-Learning THINQ
SumTotal
content AXG (U.S.) Plateau
Saba
Intellinex
KnowledgePlanet
Service Providers
Deloitte Consulting
EDS
Consult clients in the
Accenture Learning
IBM Learning
strategy, planning, and
Services implementation of e-learning
services
Source: “Market overview 2003: Corporate eLearning” - Forrester Research (2003), Booz Allen Hamilton

66. Potential specialized content niches identified for further evaluation
♦ Technical ESL
– Technical ESL to train employees on technical terms (generally English) that are used globally
becoming important (especially for companies that manufacture globally)
♦ Mandatory/compliance training for technology, financial services, or healthcare
industries
– This is the most attractive niche in the U.S. that would make it a good place to start from a
market perspective
♦ Non-corporate market
– Governmental, non-governmental and non-profit organizations that need custom content e-
learning solutions
♦ Cultural training or localization of content
– Position Tecnonexo to capitalize on an emerging trend as the one company that understands
different cultural/ethnic backgrounds
♦ Multiple language capability
– Address firms that need training in multiple languages and want one service provider addressing
all of their language-diversity needs
♦ Minority supplier training programs/Hispanic owned businesses
– U.S. based businesses that are predominantly made up of Hispanics that need e-learning
solutions

67. Potential capability/methodology niches identified for further evaluation
♦ Technology leader: simulation, storytelling, gaming, etc (example Wisdom Tools)
– Creating technical superiority to deliver more e-learning training for more complex skills could be
a competitive advantage
♦ Advanced behavior and results measurement methodology
– Creating a sophisticated proprietary methodology for measuring results of e-learning
deployments could be a competitive advantage

68. Implementation tactics
Different sales force requirements in U.S.
♦
– Must have resident sales force that has in-depth knowledge of local e-learning industry and Tecnonexo’s
capabilities in order to develop relationships through high touch consulting services
Leverage current relationships
♦
– Get introductions from current LatAm multinational customers to sell work in the U.S.
– Approach U.S. clients formerly served through partners, as Tecnonexo will have some initial credibility when
describing firm capabilities and approach
Raise visibility through thought leadership
♦
– Publish white papers, speak at conferences, provide interview to media
Penetrate and propagate
♦
– Start with general training (i.e. compliance) at the corporate level and move to more specialized training at the
business unit level later
– Start off doing simple translation to build the relationship
It is a small world
♦
– Leverage initial successes into adjacent industries
– Use the small, tight-knit universe of e-learning professionals to get referrals/recommendations
– Act as a reliable, trusted advisor rather than simply a vendor
• Talk about successes and thought leadership in Latin America
Mexico’s unique challenges
♦
– Set up a local office to show commitment to region and provide necessary service, be aware of very hierarchical
structure, use chambers to network and build credibility
– Explore potential synergies with ILCE (a multilateral organization with presence in LATAM and HQ in Mexico) –
they provide most of the content for the Mexican Government
– Target transnational's where relationships can be leveraged into the U.S.

69. VII. Appendix
ESL training in the U.S.