SMEs in Asia
Under the theme of preparing your business for entering Asian markets, two speakers presented their thinking on some of the business tools and ways of thinking that New Zealand businesses need to develop in order to successfully do business in Asia. The discussion was held at the initiative of Asia:NZ's business programme in Auckland, on 10 December 2008.
Roger Slater, Director of Chalis Group, a branding strategy and communications agency, is an experienced marketing consultant who has worked with clients such as 42 Below and Mana Shuzou, an alcoholic beverage maker, to help them enter Asian markets.
Under the topic of “Preparing to enter markets in Asia using brand benchmarking”, Roger talked about how such tools can provide the structure for a company’s international strategy and increase the rigour of its internal and external processes, necessary for gearing up to face the challenges of entering Asian markets. He explained how the application of such tools can enable New Zealand firms to maintain focus and control of the brand, and earn the respect of business partners in Asia.
Mitchell Pham, General Manager of Auckland-based Augen Software Group, spoke on the topic of “Identifying allies for expanding into Asian markets.” From an ICT perspective on expanding into Asian markets, Mitchell discussed the importance in Asia of developing strategic working relationships with governments in New Zealand and in Asia, trade offices, potential channel partners, and well-connected experts. Such allies can contribute to a collaborative approach to developing strategies and tactics for entering Asian markets, and can assist with their successful implementation in the field.
Mitchell Pham came to New Zealand from Vietnam at the age of 13. After several years of building business networks and relationships, Mitchell led the Augen Software Group into Asia in 2005, when the group established an Asian software services centre in Ho Chi Minh City, Vietnam. Augen is now leveraging its Asian connections and its resource base in Vietnam to support New Zealand software companies in growing their products and services, structuring their businesses for speed-to-market and expansion into Asia.
Mitchell is a strategy advisor to a number of business support organisations that work with potential high-growth companies in New Zealand. He also participates in several government initiatives, trade missions and ICT industry research projects.
Below is a taste of the Q&A session with the speakers, which took place after the presentations:
Q: What impact is the current financial crisis having on business activity in countries like Vietnam?
Mitchell Pham: The firms I deal with in Asia are already developing strategies to take advantage of the new opportunities that are expected to emerge as a result changes in market conditions caused by the crisis.
Q: To what extent do the costs involved with setting up an office in Vietnam present a hurdle for New Zealand SMEs wanting to establish a base in Asia?
MP: Smaller companies, with limited resource bases, should consider borrowing office space from related firms initially, as mine did, prior to securing their own premises in Ho Chi Minh City. Companies can begin their market entry strategy by making frequent visits to Asia and staying for a few weeks at a time until they get a good feel for the market opportunities in a given market, before deciding on the next step to take.
Q: What are Vietnamese entrepreneurs like for New Zealand businesses to do business with?
MP: Entrepreneurship is very natural and organic; it comes naturally to them and is part of being who they are. Entrepreneurs in Vietnam aren’t in business to simply achieve a lifestyle - rather they have open-ended goals for growing their businesses. New Zealand companies will need to be compatible with this mindset by always being hungry for new business and being prepared to partner over the long term. This can mean the business aspects of the relationship may not happen as quickly as a New Zealand company would like. If partnerships with Vietnamese companies are to be successful, the goals of New Zealand companies will need to reflect the Vietnamese long-term way of thinking.
Q: What kind of exit strategies to do Vietnamese companies have?
MP: The idea of an exit strategy conflicts with business thinking in Vietnam, where businesses are something you build and leave as a legacy for your descendents; it’s not something you create with a view to selling off once it’s grown to a certain point. Business people in Vietnam would be reluctant to partner with a firm that would hold such an objective.
► Download Opportunity Asia: a presentation by Mitchell Pham, Augen Software Group.
