figures show that local exporters have
seized upon the new opportunities.
For instance, California’s export of
machinery (except electrical), which
includes agricultural machinery,
increased from US$0 in 2014 to
US$18,000 in 2015. In 2015,
machinery represented 6% of total
Californian exports to Cuba, follow-
ing computer and electronic products,
7.7%.
Incorporate Existing Cuban
Business Models and Institutions
into Your Export Strategy
Understanding the realities of the
Cuban market will help a company
have far more success and minimize
frustration. The two cases highlighted
here illustrate the importance of work-
ing within Cuban’s business climate.
A small Florida-based bank, Stone-
gate, signed a deal with the Banco
Internacional de Comercio (Interna-
tional Bank of Commerce) to oper-
ate on the Caribbean island. Last
year, Stonegate Bank announced
that travelers can now use the debit
MasterCard in Cuba. The success of
this collaboration over the long term
remains to be seen. From personal
experience, use of the Cuban cur-
rency, peso convertible, is still a must.
Many merchants still operate mainly
on cash transactions. Nevertheless,
the lesson here is that Stonegate
Bank is collaborating with an existing
Cuban financial institution to provide
services in Cuba.
Airbnb is another case of a com-
pany operating on the island within
the current business climate. From
personal experience, the existence
of the online house rental service
made lodging arrangements in Cuba
easier and far less costly during my
most recent visits. Airbnb forged
partnerships with the already existing
casa particulares, in which Cuban
citizens rent out rooms in their homes
to tourists. The use of casa particu-
lares dates back to the late 1990s.
Airbnb advances upon the casas
particulares model with a technologi-
cal component, which makes it easier
for homeowners who have internet
access to advertise their property to
a wider audience and foreign visitors
to reserve less-expensive rooms prior
to travel.
In return, Airbnb receives a small per-
centage of the amount the host earns.
According to a 2016 Miami Herald
article, “Airbnb’s rapid growth in
Cuba comes with a few problems,”
the Cuban government receives 10
percent of Airbnb’s earnings. As
former researcher for the Global
Research Institute of International
Trade (GRIIT) Luiz Guilherme Osório
writes in “Airbnb in Cuba: An Online
Business in a Predominantly Off-line
Environment,” the company did not
try “to change the way that Cubans
conduct business…Rather, [it] rein-
forced the idea that they would offer
another tool to boost house owner’s
business and advertise…to a wider
public.”
In other words, U.S. companies,
small and large, must develop a
strategy that aligns with the existing
institutions and key players in Cuba.
Cuba is Already Open to
Business from Other Countries
Finally, competitors from other
countries are already in the Cuban
market. For instance, the United
States was the major supplier of food
products to Cuba until 2008. Since
then, Cuba began to increase its
import of food from countries such
as Brazil. The U.S. Department of
Agriculture reports that in 2014, the
United States ranked as the third top
exporter of food to Cuba, following
the European Union and Brazil.
It would be a grave mistake to think
that the complete opening of Cuba
automatically means that a U.S.
firm would be competitive or have
success in the Cuban market. Under-
standing the competitors or potential
collaborators is important to reduce
the risk of failure and frustration in this
market.
Of course, there are other factors to
consider about the Cuban market, es-
pecially regarding U.S. policy going
forward with the change in adminis-
trations. Nevertheless, the pieces of
legislation over the last 17 years may
not be so easily thrown out. With a
focus on the existing context, I repeat
a phrase that many Cuban citizens
uttered to me during my first visit to
the island. “It may be difficult, but not
impossible!” The impossible becomes
possible by starting now with a real-
istic strategy and action plan that will
expand one’s company to the Cuban
market while also meeting the needs
and demands of consumers in the
same market.
Sarita D. Jackson, Ph.D. is the presi-
dent and CEO of the Global Re-
search Institute of International Trade
(GRIIT), a think-tank/consulting firm
focused on trade policy analysis and
advising businesses on global market
competition. She is also an instructor
at UCLA Extension in the Department
of Business, Management and Legal
Programs. Dr. Jackson’s book, It’s Not
Just the Economy, Stupid! Trade Com-
petitiveness in the 21st Century, was
published by Cambridge Scholars
Publishing in April 2016.
She can be
reached at sarita@
griit.org and (310)
912-7950. www.
griit.org
