Archive for April, 2009

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international go-to-market strategies

Thursday 30 April, 2009

Virchow Krause hosted another breakfast briefing, this time on international go-to-market strategies.  Again, it was pretty high quality, but not quite as interactive as the last 1.  Here’s the presentation they gave:  gotomarketstrategies

The general theme was American companies need to use more rigor in choosing markets & partners.  In too many cases, US firms abdicate their marketing strategies to local partners & their mutual success suffers because of it.  70% of the time, foreign distributors approach US companies about representing them in their home countries & the Americans sign them up.  The problem is this is very reactive & not proactive, so by not doing our due diligence, we’re stuck with enthusiastic representatives rather than the best ones.  Biggest reasons for failure are being reactive & short-sighted, both from which US firms suffer massively in world markets.

Mosaic fertilizer company, essentially a commodity producer, went through 40 distributors until they found the right 1 in Latin America.

Redland Roofing figured that everybody needs a roof, right?  They tried to build international markets, but due to different regulations & building practices elsewhere, gave up on the rest of the world after 10 years.  3M sends expats to Brussels for 5 years to export their business culture to Europe.  It’s expensive, but less costly than screwing up your brand.

There was a little time left for Q&A:

  • there is no minimum size threshold to go global, as long as you can store inventory & have a strong cash position
  • technology makes it easier to confirm locally-provided data, but hire independents to be sure
  • corruption will always be a problem in the rest of the world-Redline ATV’s sold 1 of their products to a sheik who reverse engineered it & sold them all over Malaysia.
  • In weighing the global/local trade-off, keep product planning centralized & customer-focused activities locally-oriented.
  • there is no 1-size fits all strategy.  a discount brand in 1 country can still be a premium brand in another country.
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masters/phd opps @ softwarepark hagenberg, austria

Wednesday 29 April, 2009

I saw a presentation which might be of interest to informatics phd students & budding entrepreneurs.  Dr. Bruno Buchberger of Softwarepark-Hagenberg made this presentation:  softwareparkhagenberg.

Kepler was a medieval scientist who specialized in the motion of planetary bodies in space.

Buchberger founded the park 20 years ago. Buchberger raised 4M euros in equity funds, but with no venture capital.  40 credit hours are earned in 2 credit hour classes, while some are 4 credit hours.

The English-only graduate programs started 2 years ago with 8 international students.  Now they’re up to 25 students from Egypt, Romania, Indonesia, & none from Austria.

Austria is suffering from the same lack of interest in technical disciplines as many other major economies.  They all want to study economics & marketing & not mathematics & science.

My take:  if you’re considering a degree in this area & interested in broadening your horizons in Europe, this looks like a good option.  In Austria, not being in Vienna or Salzburg might be a bit constricting, but if you’re focused on your studies, distractions in those cities shouldn’t matter.  The costs of 8500 Euros tuition/year seems very competitive.

I’m not aware of many business-technology parks in Europe dedicated exclusively to software firms, which makes SoftwarePark Hagenberg quite an exception.  Encouraging entrepreneurship to the degree they do is pretty novel as well.  Hosting 40 software firms is pretty impressive.  Matching up high-level students with specific firms for their studies I would think would be a big advantage too.  This eliminates the problem of academics researching topics that have no relationship to the real world.  Working with growing companies makes the research grad students do grounded in reality.

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competitive intelligence in China

Tuesday 28 April, 2009

I attended the Society of Competitive Intelligence Professionals annual conference/exhibition & honed in on a workshop entitled Competitive Intelligence in China, which proved to be very interesting.  The guru of CI in China, Qihao Miao, of the Institute of Scientific & Technical Information of Shanghai, made a presentation. Interestingly, Miao tried to form a chapter of SCIP in China, failed, then formed a Chinese equivalent, SCIC, which now has more members than SCIP.  He offers a few tips:

  • learn the Chinese language, not the dialects,
  • do not believe local “ancient Chinese wisdom.”
  • when in Rome (China), be yourself, not Roman(Chinese)

Awareness & use of CI is growing in China, especially in the interior regions & 2nd tier cities.  The Chinese feel an urgent need to invest overseas, which creates a need for more CI.  They recognize the need, but can’t serve themselves, so they’re looking outside for that expertise.  Although CI can’t be separated from the government, it is referred to as NCI, a national intelligence infrastructure, i.e. trade early warning system to sense change in trade of foreign partners.  Regional governments have increasing CI needs as well, since regional competition has been 1 of the critical factors in China’s 30 year growth.  He even cites Hu Jintao saying, “An information & intelligence supporting system for decision-making should be strengthened.”  The emergence of Chimerica (the merged economic interests of China & America) recognizes that ignorance leads to wars & that a knowledgeable China is a blessing & not a curse for the rest of the world.

Gary Lim made a presentation on cultural barriers to getting competitive intelligence, highlighting differences in relationships, hierarchy, & communications.

Q&A proved to be provocative.  David DeChant chimed in that CI needs to find those guanxi connections while 10-12 million Chinese join the middle class each year.

While there are restrictions on publishing, the media, & the internet, the government understands information flow is necessary.  However 1 must also understand, 20 years ago, all information was government-owned.  Some market research is still controlled, i.e. opinion polls that are not strictly product-oriented.  Some project plans still require approval of the national statistics bureau, but not necessarily the results.  Matching your strategy with government’s desires can help you get things done.  Self-censorship can be just as dangerous.

A Baxter exec posed a question & found Chinese companies can be tightfisted with their information.  Panelists said it’s even tough for Chinese companies to get information on other Chinese companies.  Distribution issues can be top secret in China & sometimes getting this kind of information can be quite political.

An executive who worked with Ingersoll Rand, who wanted to buy out a local partner, couldn’t get information.  The response was, “in a market where 20-60% of all goods are counterfeit, it’s difficult to get accurate numbers.”

Obstacles for Americans are client expectations & cultural barriers to sharing information.  For foreigners, perceptions of the law differ-it’s gray in China, not black & white as in America.  Even for locals, a lack of basic comparable statistics like GDP is frustrating.

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French labor tactic-kidnapping

Friday 24 April, 2009

I don’t know if you caught this article by Greg Burns in the Chicago Tribune France boss kidnappings: Workers considering hostage-taking just a part of labor negotiations but I found it quite interesting.  Where I depart with the author is where this action fits in the greater scheme of things.  For Americans, it’s a big deal because French laborers “kidnapped” American managers.  For the French, this isn’t as big a deal that the workers sequestered their bosses, wherever their headquarters lies.  My point is, because of broad general differences, we look @ this same situation quite differently.  The main difference in my mind is the general differences in orientation of the economies in Europe & America.  Across the pond, labor still occupies a much larger share of mind, while here, all that matters is rampant consumerism.

In Europe, the economy revolves are the worker, while in the US it’s centered around the consumer.  When living, working, & traveling in Europe, there were many times when I, & many colleagues, accepted slower customer service to be understanding of the plight of the waiter, clerk, or retailer.  Labor has a seat on the board of directors of firms in a number of countries.  Although declining somewhat, unions still play a much greater role there.

In the US, workers are replaceable parts, to be simply jettisoned at the 1st sign of economic trouble.  Firing workers is comparatively easy & done often.  After shareholders, the consumer is king, & all efforts of the business are focused on serving consumers.  Employees are a much smaller part of the equation than in Europe.

There are advantages & disadvantages to these mentalities on both sides of the Atlantic.  Many products are more expensive in Europe because they are locally produced by more expensive labor.  Consumers pay a higher price for keeping their laborers employed.  Because they have less labor flexibility, many new manufacturing jobs are going to eastern Europe & elsewhere.  Americans pay the cheapest prices for many products not only for their economies of scale, but also flexibility to buy from anywhere in the world with cheaper labor.  Consumers get the advantage of lower prices in exchange for American workers losing their jobs.

fyi-I’m in no way endorsing keeping the boss in the office against his/her will, just recognizing that part of the outrageousness attached to it is biased against the European favoritism towards labor.

So while we’re outraged that bosses @ American firms have been detained, for the French, it’s no big deal.  Their workers’ rights might have been violated & therefore they may get much more consideration than they would get here in the states.  These situations take place in context, & our American writers aren’t recognizing that.

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Americans in Mexico-shoe on the other foot?

Wednesday 22 April, 2009

This article by Oscar Avila in the Chicago Tribune  Mexican immigrants: U.S.-born students struggle after returning to school in homeland highlights a lot of cultural differences with our neighbor to the south which I think shed some light on how we might look @ things if the situation were reversed.  Suffering from culture shock when moving to a new country.  Language difficulties, “feeling stupid,” & becoming at-risk students when placed in a new classroom.  Mexicans when they come to America or Americans in Mexico?  Apparently it’s very similar in both directions.

Education is a deeply culturally-biased institution.  Classrooms & the teacher/student dynamic are different everywhere you go. My impression is Mexican classrooms are much more authoritarian & not as democratic as ours in the US.  I attended high school in 1 of the best school districts in the state of Michigan, went to 1 of the best US public universities, & earned a Master’s degree from the best school in global business.  I know how the best educational institutions work.  I taught @ a very urban school of business @ a university on the south side of Chicago.  I also taught for a semester @ a private business academy in a small town in southwestern Poland.  I’ve experienced how resource-constrained schools operate too.

I have tons of respect for the students I taught on the south side because they had many more issues to deal with than I did.  Many were single parents working full time jobs.  I can’t imagine going to school full-time with those responsibilities.

The Poles were inveterate cheaters.  I tried to do my best to thwart them, but they beat me.  I organized the room for my final exam in a U-shape so that I could see them, but they had their backs to me.  The problem was there was a constant whisper throughout the whole exam, so my choice became either fail everyone or no one.  I couldn’t justify failing everyone.

I’m surprised American children of Mexican parents would attend school briefly in Mexico around Christmas before returning to the US.  Just like business, integration is key, & you can’t integrate by drifting in & out of schools.  I’ve been talking with a lot of American businesspeople for whom education is a key component to their global success.  By not paying attention to the cultural differences in education, they could be missing some great opportunities.

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translation ineptitude, problems, & solutions

Monday 20 April, 2009

I attended the American Bar Association Techshow & picked up a copy of the ABA Journal, which contained this article Lost in Translation. Interestingly, I came across this article the same day Illinois hospitals enlisting video translators.  Translation is a critically important component in international business, but fraught with perils, which the 1st article illustrates.  I think it also indicates the ineptitude even smart professionals like lawyers encounter when trying to solve these problems.  Lessons learned:

  • networking to find translators helps, but there may be problems with qualifications
  • writing style guidelines & guides resolve differences
  • ignore dialects at your own peril, they can create big problems

The 2nd article offers a potential solution for another profession.  It looks like a blatant outsourcing solution without saying that, but in connecting with translators located far away onlinie, that’s OK.  The most imporant thing is to be able to solve the problem professionally in a time effective fashion, which this seems to do.  (Some of the solutions in the legal article seem to be unacceptable, i.e. people not getting paid, detaining a witness for 8 weeks, etc.)  Ironically, the cost of the system is minimized in the context of avoiding costly medical errors.  $.80/minute used to be cheap for international long-distance calls, but now I’m sure this is done via VOIP (voice over internet protocol), so the actual cost of the call is pennies, &  the costs for translators, especially in developing countries, can be added on & still show a profit.  This also displays the power of the network, i.e. rather than having to track down a live translator for each foreign-speaking patient, being able to tap into a large network with many language capabilities on a moment’s notice offers real power to the solution.

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a few dissenting voices against a chicago olympics

Friday 17 April, 2009

I attended this event last week Creative Living In the City: Are You Game for the Games? Chicago 2016’s Legacy on Parks, Transportation and Local Sports & was surprised to find there are a few people who are not gung-ho for hosting the 2016 summer olympics in Chicago.  Generally, the Friends of the Parks want a lot of the structures constructed for the games to be disassembled after the games are over:

  • Washington Park-stadium & aquatic center
  • Douglas Park-velodrome
  • Northerly Island-slalom center

They also want these revisions to the plan:

  • Lincoln Park-replace 20 tennis courts with 20 courts rather than proposed 13, & protect the bird sanctuary
  • Jackson Park-replace artificial turf with natural turf
  • Monroe Harbor-the new breakwater could remove boaters from the harbor for 4 years, costing the Park District $4M/year or $16+M, so allow boaters to use the harbor during the construction of the breakwater.

Interestingly, Randy Neufeld, Chief Strategy Officer of the Active Transportation Alliance, formerly Chicagoland Bicycle Federation, was invited to speak about transportation.  He pointed out that the current goal of Chicago’s public transportation is mainly to move large volumes of people in & out of the loop, which is a different goal from moving huge volumes of people to widely dispersed parks & venues.  He sees 4 legacies of the games for transportation in the city:

  • investment in rail & its stations
  • creating the most accessible games, but that costs $10-50M/rehabbed station
  • rapid transit bus system with exclusive rights of way for buses, including shuttlebuses on the expressways for the Olympics, but only 15% of the population uses pubic transportation while 60% drive their cars
  • shared public bicycles

A short Q&A brought into the open:

  • while the old US Steel site on the southeast side might not be utilized, the Michael Reese site should rejuvenate that area
  • the boating community should only be out of Monroe harbor for 1 year
  • there are community meetings to be held to discuss the future of the parks
  • The bid is limited to the answers required in the bid book for the IOC to address issues such as the bird sanctuary, tennis courts, green space.  Chicago’s bid book provides more detail than London’s did, for example we calculated the carbon footprint impact.  There will be changes in the plan as it moves along.

My take-these are all valid criticisms.  What’s important is to have an open & honest discussion of how all this will be played out.  The Olympics are a great opportunity for Chicago, but not at any cost.