Gabriel Hernández
Director General
Sigma Solutions
View from the Top

Young Brand Pursues Market Trust

Wed, 02/22/2017 - 15:56

Q: As a Mexican company, what strategy are you following to succeed in the market?

A: Our main challenge is to earn the market’s trust because many customers do not believe Mexican companies have the same level of technology, service and cost-competitive prices as foreign businesses. Sigma Solutions was founded in 2009, so another challenge is to establish our brand in the market as a young company. It is hard for us to compete with large players but we have proven that we can develop innovative products with the same quality as larger companies. We provide field support every time we make a deal because we want to ensure our products are installed properly. Sigma Solutions always provides training to customers. We explain the advantages of our products and how to use them correctly to make sure they are comfortable with our work. It is especially important for us to ensure that customers are fully satisfied with the quality of our products and services because we are a new company competing with renowned brands.

Q: What solutions has the company developed for CFE and how does the commission contribute to Sigma’s competitiveness?

A: CFE has been one of our main customers. The Commission’s strategy is to support Mexican companies and they believed in us. We have specially designed products to meet the state-owned company’s needs, including an electrical connector that can work up to two years instead of just six months in areas with high levels of corrosion and pollution. This product was relevant for CFE because it allowed the company to save money in locations with these kinds of problems, such as Coatzacoalcos in Veracruz. Anti-theft boxes existed prior to us entering the market but we innovated the design, aligning the case with the electricity distribution system, unlike previous designs where the case was a completely different element. We started selling these cases to CFE in 2010 and now have 90 percent market share. Electricity theft is a colossal problem for CFE and it has targeted a 3 percent annual reduction. CFE invested a considerable amount of resources in this technology. We are also developing a product to help CFE change the country’s payment culture. We are following a similar strategy to the telecommunications industry in which the service is interrupted immediately when payment goes overdue. CFE waits up to 40 days before cutting unpaid services, which does not help to promote an efficient payment culture. Some states in Mexico do not fulfill their financial responsibilities with the state-owned utility, such as Tabasco and Mexico City. But there are several ways CFE can address this problem and we are excited to be part of the solution.

Q: Why is it important to invest in R&D and what is the company doing to foster innovation?

A: A company’s success lies in the development of new products. If a company does not innovate, it will not meet the future market’s demands, which change every day. Our goal is to get at least 20 percent of annual revenue from newly developed products, which can be challenging because it takes hard work to develop and launch new solutions every year. We started collaborating last year with CONACYT to install a laboratory in Puebla to design and develop new products. The total investment required for this R&D facility was over US$350,000, which was covered by CONACYT and ourselves. It will give us the ability to test our products and compare them with those of the competition. The facility also will allow us to demonstrate the quality of our products to customers. All our R&D budget comes from reinvestment of past profits into new product development, allowing us to innovate constantly. Sigma usually expects a two- year period to recover our investment after we launch a new product. We consider this period enough to test a product’s viability. Companies need to be patient when testing a product’s market potential. The outcome of our investment depends on business and market conditions but we always make sure all our projects make financial sense, at least on paper.