Growth Strategies of the Jalisco New Generation Cartel: A Business Model Analysis

Decades into Mexico’s Drug War, one might assume that cartels are on their way out. Nevertheless, the rise of Cartel Jalisco New Generation (CJNG) has defied expectations. Less than two decades ago, the group made its first appearance following the breakdown of the Milenio cartel. Today it is active in almost all Mexican states and considered a top national security threat. This thesis analyzes the internal and external factors contributing to CJNG’s unprecedented growth. By building on the similarities between organized crime groups and business enterprises, first highlighted by social scientist Diego Gambetta, it performs a business model analysis of the group, identifying its revenue-generating strategies and cost-minimizing tools. Further, it uses the analytical narrative method to demonstrate how CJNG has employed these tactics over the years to adapt to changing circumstances. The study finds that CJNG’s rapid growth stems from a versatile business model, which combines...Show moreDecades into Mexico’s Drug War, one might assume that cartels are on their way out. Nevertheless, the rise of Cartel Jalisco New Generation (CJNG) has defied expectations. Less than two decades ago, the group made its first appearance following the breakdown of the Milenio cartel. Today it is active in almost all Mexican states and considered a top national security threat. This thesis analyzes the internal and external factors contributing to CJNG’s unprecedented growth. By building on the similarities between organized crime groups and business enterprises, first highlighted by social scientist Diego Gambetta, it performs a business model analysis of the group, identifying its revenue-generating strategies and cost-minimizing tools. Further, it uses the analytical narrative method to demonstrate how CJNG has employed these tactics over the years to adapt to changing circumstances. The study finds that CJNG’s rapid growth stems from a versatile business model, which combines targeted violence and economic diversification to dominate key territories and adapt to market fluctuations. Similarly, by acquiring established enterprises through extortion and capitalizing on rival disruptions to expand its alliance network, the cartel reduces costs. These strategies are complemented by an array of risk-mitigation tactics such as corruption and outsourcing conflict to its proxies, which enable CJNG to minimize losses thereby boosting profitability and operational resilience.Show less

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Growth Strategies of the Jalisco New Generation Cartel: A Business Model Analysis