Building a lean machine.

Cost cutting is the single most important issue facing most multinational companies operating in Latin America. A tough 2002 and slow-motion recovery this year have whacked revenue, not to mention profits, at all but a few of the LATIN TRADE Giant 24 leading companies in 12 industries.

Most managers look for savings during a downturn, but Wal-Mart has made low-cost operations the heart of its strategy. With global sales of almost a quarter of a trillion dollars, the world's largest retailer can make demands on suppliers that most companies only dream of. Nonetheless, its Mexican division is a case study in the benefits of sticking to your strategic guns. Walmex posted another banner year of double-digit growth in a humdrum economy.

In Argentina and Brazil, adverse macroeconomic and industry conditions may seem impossible to overcome, but the bottom line of business accepts no excuses. Telecom multinationals have had to fight through a sales drop of as much as 50%. In this issue, Ericsson Vice President Tomas Szentei tells LATIN TRADE that the economic slowdown is temporary and that new types of revenue will emerge.

Optimistic? Sure. Yet Ericsson, like all the multinationals featured in this issue, is not the typical jittery, capital-only investor that spooks emerging market bolsas. It's a longtime emerging-market resident that has been in Latin America for decades and will continue for many more. Packing the bags and moving on when times get tough is not an option. Instead, survival means taking an ax to expenses while finding new ways to grow.

P.S. Looking for savings and new business, banks and retailers are bringing customers onto their networks (See page 36).

--Mike Zellner

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