How to succeed and win deals in Asia? Part 2.
- Podcast – Manufacturing in Malaysia – Volker Friedrich - June 17, 2020
- How to succeed and win deals in Asia? Part 4: Solutions to Sales Channels Development. - March 3, 2020
- How to succeed and win deals in Asia? Part 3: Channel Sales Challenges. - February 21, 2020
This is the second article in a series of four about business best practices in Asia.
In the first article, I presented the general framework and called for professional curiosity for those companies, who are not yet present in the fastest growing market area of the world, namely Asia.
If you didn’t read this article yet, please go here:
How a business can succeed in Asia, part 1
In this second article, we will discuss how to choose the best markets for market expansion. Focusing on the right markets is naturally a prerequisite for winning deals in Asia.
There are validated methods available to test the suitability and competitiveness of your products or services. We recommend using them to ensure that it makes sense to invest in Asian market expansion. Market entry operations are a significant investment, hence a professional reality-check is in place. Asian Insiders’ “Market Test Drive”- service concept is designed for this purpose.
The usual story
In real life, the choice of target markets happens in multiple ways. Often companies follow their key customers when they expand to new countries and locations.
For example, many companies have entered the Chinese market because of this reason and in order not to lose their important customers at a time when they have established a new manufacturing facility in China.
Another common way to enter new markets happens through contacts, which were established at trade fairs. A potential channel partner visits your stand and simply would like to represent your company at their market and the partnership is established.
Sometimes you might get lucky. The channel partner who found you might be exactly the right one and the business starts flying nicely. Unfortunately, it usually doesn’t go like that.
You yourself need to know the channels you need to use to reach your target customers and find the best partners within those channels. I will discuss these challenges in more detail in the next parts of my blog series.
“Asian markets are all different.”
There are hardly any common denominators. At one end there are countries like Singapore with one of the highest income levels of the world, well-educated people, no corruption, English speaking, very transparent etc.
At the other end, there are countries like Myanmar with almost completely opposite characteristics compared to Singapore. There are multiple languages, religions, political systems, levels of education, industrial structures, market maturity levels and so on.
There is simply no such thing as “the Asian market”. It is a heterogeneous collection of countries and markets. Consequently, there is no standard answer to the question where the best markets are for any company as it is usually not just about the theoretical market size only.
Macro-level economic indicators such as the GDP, economic growth, population, etc. are never good enough indicators to tell you where your best business opportunities are for your products or services.
Asian Insiders “Best Asian Markets”- concept
We at Asian Insiders believe in a systematic approach. It is actually completely possible to identify where the best market for any product or service is in Asia and as a matter of fact also globally.
There is no need for guessing or learning-by-doing- approach. Our approach is always targeted at helping our clients to succeed and win deals.
In addition to the addressable “market size” as one of the dimensions of the analysis, there are always a product or service-specific factors, which determine how attractive any particular market is for your company.
For example, level of competition, local laws & regulations, intervention of authorities, market price level, suitability of the technology or offering to the market, local standards, availability of competent business partners, cultural differences, corruption, ownership restrictions, readiness to adopt new technologies, etc. are typical factors which can be used to define “the market attractiveness” dimension on the analysis.
The third dimension we typically use in the analysis is the “market development stage”, which used to define if a market is an emerging or embryonic market, growth market or mature market from your products or services point of view.
The actions required to enter the market are quite different if you enter a market that doesn’t exist yet (embryonic) or if it is already a mature market where all your competitors are already present.
How do we do this?
It always starts in a workshop with our clients’ management or sales team where we together design the criteria to be used in the analysis to define market attractiveness, market size, and market development stage for your products or services.
One of the benefits of this approach is that it helps to align the thoughts and opinions of our clients’ key people and it will eventually eliminate subjective individual opinions, which are not fact-based.
As a result, we will get a fact-based comparison between chosen markets included in the analysis. It will enable our clients to rank the markets in priority order and make “Go-No Go”- decisions.
It is not an extensive nor expensive in-depth market analysis. Instead of the Best Markets- approach is to be used to focus the required market entry or market development investments to the best markets from your business point of view.
One of the typical outcomes of the analysis can be seen in the picture below.
The last two articles of my blog- series will focus on the fascinating world of channel sales. stay tuned.