Want A Successful Business Model? This Book Says Look To The Cartels

A new book examines the economics of drug cartels, including franchising, branding, media exposure, public relations and threats to their market.

By Rhonda FanningMarch 23, 2016 9:19 am,

Think you’ve got what it takes to run a successful business? if you’re not sure, you could try studying other successful businesse, perhaps take a page from regional success stories like HEB or Dell.

Or, you could follow the business practices set out by drug cartels.

As a business enterprise, this is as serious as it gets – textbook-worthy stuff, says Tom Wainwright, author of “Narconomics: How To Run a Drug Cartel.”

Wainwright, who was the Mexico City correspondent for The Economist, is now an editor for the magazine in London.

He says cartels market themselves like franchises, like McDonald’s or Starbucks. They branch out in new regions of Mexico by recruiting local groups of criminals.

“(They say) Hey guys, why don’t you be the local franchisee of the Zetas?” Wainwright says. “We’ll let you use our logo, our name, we’ll give you some training, we’ll lend you weapons, and so on. And in return we want to take a cut of your revenues.”

Wainwright says during raids, police have found branded baseball caps and t-shirts with the logo of the Zetas. Cartel violence also affects the daily routines of those in their areas – in fact, the most dangerous time of day to be out, according to a morgue director, is around 5:45 p.m.

“It’s because the cartels quite often time their murders to catch the evening news headlines,” Wainwright says. “They want their murders often to be widely reported. That way, it strengthens their brand, it scares people, it lets the other cartels know that they mean business.”

He says cartels build churches, sports playing fields, even public housing. For example, Pablo Escobar was well-known for his public investment. “They do it for the same reason that other companies do,” he says. “It’s to launder their reputations, it’s to try to buy support among the public. And it seems to be working.”

The one thing cartels fear is legalization, of the sort underway in parts of the U.S. “Like it or not,” Wainwright says, “what that does is take the market away from the gangsters and put it in the hands of regular businesses.”