November 2008 | By Cristina Cruz, Professor at IE Business School
Peru is seeing an increase in wealth that brings many opportunities for family businesses, provided that they put their house in order. The Peruvian economyâ??s sustained growth at rates of over 6% in recent years constitutes a scenario of huge opportunities for the countryÂ´s family businesses, which make up more than 85% of the countryâ??s business fabric; however, it also involves numerous challenges.
In such a dynamic environment, competitive advantages evolve rapidly, the economic cycles of enterprises are reduced, and corporate success requires a management model based on two fundamental pillars: willingness to change, in order to capture new ways in which value can be created; and continuous training in order to adapt the company to changing market requirements. Why is this particularly difficult for a family business?
The problem facing many family businesses is that the traditions and resources that were once a source of competitive edge occasionally create inertia and prevent the development of new strategies required to play on markets that are becoming more and more competitive. By the same token, the obsession for maintaining control in the family means that shares used to finance growth, such as mergers, the sale of part of the capital or being floated on the stock exchange, may be considered as a sign of failure instead of a step towards the creation of wealth.