Looking for ways to screw up your Emerging Market business?

In 2014 McKinsey published an insightful article that provided a great perspective on ASEAN – the seventh largest economy in the world, its multi-dimensional diversity, its high growth potential, etc. Most western multinational Companies recognize the importance of entering this market, but they tend to look at the exciting stats, build strategic growth plans without truly understanding the complexity of the market, and eventually go down making losses. ASEAN is just an example here, this is also the case with other emerging markets like China, India, Latin America etc.

Emerging markets are complex in nature, but they don’t have to be complicated. We often complicate things ourselves by not understanding what makes these markets unique, and by not building a clear strategy and execution plan.

Have an emerging markets business in your portfolio that you want to destroy? Here are 5.5 things for you could consider:

1. Do not create localised products

Differentiate, or Die – that’s what you need to remember if you want to win in emerging markets in the long run. If you don’t develop and deliver localised and customised products relevant to the market, your business will die a slow painful death. It might be a smart approach for large multinationals to enter emerging markets focusing on the premium price segment. But do remember that this space is not a safe haven forever. If you don’t do continuous, agile, product innovation and branded differentiation, competitors will eliminate you from these markets in the long run.

2. Ignore your local competition

Asia is arguably the most competitive market to do business in. FSG has a brilliant blog post on this topic. Many Asian competitors operate in a factory model. Vertical integration, low cost production, extremely lean OPEX model, aggressive management that drives volume share gain as their key KPI – add up all these and you have a tough battle to win if you are a multinational corporation. If you don’t plan a differentiated product roadmap and a consistent brand superiority strategy across all touch points, you will lose the battle over time. Needless to say, this needs a very disciplined cross-functional execution model.

3. Do not build a dynamic distribution strategy

Most emerging markets have a fragmented multi-tier distribution model. See this China example. It is not a walk in the park to tightly manage all tiers of distribution and ensure inventory sell through and revenue growth. Yet another decision MNCs face is to operate via distributors vs. going direct. You need to consider multiple factors before making a decision to go direct – including your targeted geographic and channel breadth, your distributors’ appetite to grow, their support infrastructure to help you scale your business, your own organisation’s constraints on OPEX spend etc. If you do not build a strategic distribution plan that addresses all these factors, you will eventually fail.

4. Live and breathe the mantra “one size fits all”

One size doesn’t fit all when it comes to emerging markets’ channel landscape. For instance, if you are an FMCG company you will quickly learn that the levers to pull to gain mindshare and win at small format resellers are totally different from that for a large format retailer. One way to avoid the pitfall of doing the same thing for everyone is to properly segment your customers. Rigorously implement this across the value chain, and repeat this segmentation exercise on a regular cadence to see how things change as you scale and grow.

5. Operate with myopic investment mindset

The myopic mindset is to look at past years’ results and make budget and investment decisions. Really dumb executives tend to react to market volatility by thinking short-term and re-directing their investments into mature markets. Some even eliminate headcount in their emerging regions, citing excuses that they can return to the market when the market is ripe again. I have seen some companies setting myopic KPIs which prematurely kill any future growth-oriented investments for these frontier markets. Want to fail? Continue doing these things.

5.5 Build the same operational model for emerging markets and mature economies

Asia is a unique region – you have some of the most transparent economies next to some of world’s most corrupt nations. Political changes could happen any time and they will influence your decision-making. Currency fluctuations could catch you off-guard. Regulatory systems may be immature, and in some cases non-existent. If you are operating in a highly regulated industry (eg. healthcare) expect to experience tons of roadblocks that you will have to patiently remove as you make your way into growth. Be prepared to get surprises from regulatory bodies and authorities like Customs. A sure-fire way to failure is to ignore all of the above, build no rapport with the authorities, develop no government engagement strategies, and do business like how you operate in developed economies.

As multinational companies start to look for growth it is normal to have an eye on emerging markets. My advice – don’t set yourself up for failure. Understand and acknowledge the challenges of operating in this environment. Attract and retain senior-level talent who have “been there & done that”. Prepare for roller coaster rides. Things will be complex here, but don’t become the moron who makes it complicated.

5.5 Communication blunders you can easily avoid

Every day we communicate with people via many modes: face-to-face conversations, phone calls, emails, snail mails (who sends them these days?), text messages, you name it. We communicate professional and personal stuff. Though we all recognize the importance of proper communication, what we don’t realize often is that we tend to make fundamental communication mistakes that can cause serious consequences such as angry clients, lost business, tarnished reputation, or an upset spouse.

Here are 5.5 common communication blunders found in work environment… and the good news: they can be easily avoided.

1. Not preparing properly

Whether it’s a presentation, an important email message that you are about to send out, or an important conservation you are about to have with somebody, it is essential that you prepare and plan your communication carefully. Create an intelligent, credible and compelling message that can be understood by your audience.

2. Not proof-reading/editing your work

Mistakes such as spelling and grammar errors will make you look silly and careless. Do not rely on spelling checkers because they won’t pick up words that are used incorrectly. Did you notice that I had inserted an intentional spelling error in the above paragraph? I used the word  ‘conservation’ instead of ‘conversation’? A spell check tool will never pick that up.

Do not misspell the name of the recipient. It is an insult.

And how about sending that email to the wrong person? Email clients tend to pick up names from the address book as you start typing the name. What if you accidentally sent out an extremely confidential internal company document to some random guy in your friend’s list (who happens to work for your competitor)?

Another annoying thing I see is the incorrect use of words such as “your/you’re,” “their/there”, “it’s/its”, “effect/affect” etc.

It’s not always easy to spot your own errors so you may want to consider asking one of your colleagues to proof-read the content before distributing it.

3. Assuming that your message has been understood

Email clients can notify you when your message is delivered. But do you know if your message has been understood? You can ensure this by prompting the recipients to respond with questions, or by asking them to repeat back to you what the key take-away of your message was. It is a big big mistake to assume that the recipient or audience has understood your message.

4. Not being assertive

Being assertive is about stating what you need, while taking into consideration the other person’s wants and needs. Being assertive is often confused with being aggressive. Aggression is pushing your way down someone else, and that is not what you want to do to anyone. Assertiveness also means saying “no” when you need to, and saying it in a smart and agreeable manner.

5. Reacting instead of responding

How often have we seen people shout back at somebody, or send a nasty email reply in haste? These are all emotional reactions rather than calm and careful responses. This is what spoils your reputation and upsets people around you. I have known people who lost their jobs because of this.

When feeling emotional rage, tell yourself to calm down… turn off that email client or your computer… step away from the situation for a couple of minutes… do whatever it takes to regroup yourself and get back your composure. Those few minutes are perhaps worth your career or relationship.

5.5 Delivering bad news over email or text message

Am sure you saw that hilarious Facebook post going viral about the guy who broke up with his girlfriend via SMS. If that was laughable and childish, how about laying off someone in your team over email or Whatsapp? Sending difficult messages is not an easy task, and it demands softening the message with non-verbal cues such as body language and tonality.

If you need to deliver a bad news to someone, do it in person. Think of the sensitivity and the emotional state of the recipient before you plan to do so. And be available immediately to actively listen and to take questions from them.

 

We all make communication mistakes once a while. If you can work on the above and avoid these common blunders in your day to day life, you can certainly protect your reputation and maintain your relationships. Over time this will help you achieve greater job satisfaction and to develop into a credible leader and team player.

Does your Wireless Router make a ‘real’ difference?

When my most recent blog post hit facebook, one of my dear friends asked me this in response: “Tell me what diff it makes to consumer….whether he buys a Belkin or Linksys or Motorola router…..as long as his internet provider st[r]eams a good bandwidth”

Now, price is certainly not a concern for him (he works in Wall Street) 🙂 So what makes consumers like him wonder if their Router brand is relevant or not? Simple: many of us don’t know that irrespective of the internet speed (bandwidth) delivered to our homes by our Service Provider, the throttling factor for performance in the home is the Wireless Router.

Let’s say you have a 20Mbps broadband subscription at home (in Singapore you can get 1Gbps fiber broadband for $39/month). Basic applications such as emails, web browsing, listening to online music etc. can be all done pretty well with 1-2Mbps bandwidth. The most bandwidth intensive application in a typical home is video streaming. Even for that, a 720p HD video needs only about 3-4Mbps. If you want to go extreme and stream a Blu-ray quality 3D video that would consume ~10Mbps. Agree, the cloud (server) from where you are downloading a file or streaming a video will also have a bearing on the transfer speed… but all those factors being the same, you should still have sufficient bandwidth left in your internet pipe for your other devices, isn’t it? But then why is it that your YouTube is still buffering? Why are the kids complaining that as soon as the Smart TV in the living room is turned on, the internet access slows down on their study PC, or their facetime chats stutter?

Only one reason: your Wireless Router sucks big time!

If you are using an old technology (Wireless-G, Wireless-N) Router it is highly likely that there is interference with other radio signals in the same 2.4GHz frequency spectrum. No-name cheap Routers use poor quality antennas and electronics which dramatically degrade the performance. Many of these Routers may be using a single antenna configuration (seen in their data sheets as “1×1”) which means, one antenna to transmit and one to receive. This would also mean poor signal strength when multiple Wi-Fi devices are turned on. As many of these off-the-shelf products come from OEM manufacturers they won’t bother to build in any types of QoS (Quality of Service) capabilities into their software. Picture this:  you install the best water supply system and plumbing system in your home, with a large pipe that brings lots of water into the home uninterrupted 24/7. And then you mount a tiny, old, heavily-clogged shower head in your bathroom. Good luck with your shower, isn’t it? 🙂

Industry-leading brands like Linksys and Belkin deliver high performance Routers that use latest Wi-Fi technologies such as Wireless-AC or Dual Band Wireless N. The antennas and electronics used are best-in-class, and there are even multiple antenna configurations such as 3×3 or 2×2 for better transmission and reception of signals. The software inside these Routers are custom-built with QoS enabled. Linksys Smart Wi-Fi Routers even allow you to choose which device or application in your home should get the bandwidth priority. That’s what will ensure lag-free gaming, jitter-free Netflix movies, buffer-free YouTube, crystal clear Skype/facetime conversations, all at the same time.

There’s one other point worth mentioning here as well. Most of us believe that the home network performance is directly related to internet speed from the Provider. With so many connected devices and multimedia content in our homes these days, what we often forget is that we are not always streaming and consuming content directly off the internet. You might have a desktop PC or hard disc (NAS) at home where you store all your ripped/downloaded movies, TV series episodes, music and other stuff. What if you want to stream them to your Smart TV? Yet another reason why you need a robust and high performance Wi-Fi Router such as a Linksys or Belkin Router at home.

Bottomline:

It doesn’t matter how much you spend every month for your blazing fast internet connection… if you are using a lousy Wi-Fi Router, your home network will suffer. Switch to a Linksys Smart Wi-Fi Router today and experience the difference.

Thou shalt not steal…… Wi-Fi

A man received the following text from his neighbor:

“I am so sorry Sam. I’m riddled with guilt and I have to confess.
I have been tapping your wife, day and night when you’re not around. In fact much more than you.
I don’t get any at home, but that’s my problem and no excuse for my conduct.
I can no longer live with the guilt and I hope you will accept my sincerest apology.
I can pay you for the past and promise that it won’t happen again in future.”

The man, anguished and betrayed, went into his bedroom, grabbed his gun, and without a word, shot his wife and killed her.

A few moments later, a second text came in:
“Damn auto correct. I meant ‘wifi’ not ‘wife’. LOL”

Moral of the story:
You ain’t gonna live without a smartphone… can’t beat the autocorrect.
So, go out now and buy a LINKSYS Wi-Fi Router. No more stealing from your neighbors.

How NOT to respond to a sales inquiry

Bad example for sales response

A few weeks ago I was on the look out for a new serviced residence. In Singapore certain hotels allow attractive long-term (2-3 months) stay packages and I came across this website which indicated they have “negotiated rates” with hotels. However no specifics were given except an email address to contact them, so I wrote in and asked for details indicating my budget and stay commencement date. What I got in reply was appalling (posted above).

Needless to say it was such a useless reply I didn’t bother to contact them further. The reservation agent who replied me clearly didn’t snatch the opportunity to lock me in as their customer. Instead she gave me a stock response, stating in bold letters that she cannot help me further. I took some important lessons out of this and wish to share with all of you.

1: Always remember this about a potential customer – If (s)he wrote to you in the first place that’s because (s)he had considered you as a potential client to do business with. So now your only job is to not scr*w up the opportunity. Does that remind any of you of a scene from the movie Hitch where the namesake character says “remember, she’s already out with you. That means she said yes when she could have said no. That means she made a plan when she could have just blown you off. So that means it’s no longer your job to make her like you. It’s your job not to mess it up.”?

2: Read your customer’s message properly. If (s)he has clearly asked for something, give that…and more. Not less.

3: Never say “I cannot help you”. And for heaven’s sake, do not put that in bold black letters. If you really cannot help, state so politely and advise a possible alternate solution.

4: If you have a company website go check it and see what’s on it. A customer might reach out to you when there is lack of information on your website. If you point the person back to the website, (s)he is going to walk away…for good.

4.5: And for the love of business don’t send back stock messages starting with “Dear Sir/Madam”. If your customer has written an email and signed a name on it, just copy it. A personal message shows you care.

9.5 Tips on pricing and price strategies

Lately had quite a few people reach out to me with queries on pricing strategies. Here are 9.5 tips for you if you’re responsible for pricing in your organization. This is not meant to be a comprehensive list, but should give you useful pointers if setting price is part of your day-to-day work.

1. Dropping price is easy. Raising it back up is often near impossible

2. A 2% price increase would, on average, lead to a 15% profit increase for FTSE 100 companies

3. Demand-driven price will always bring bottom line improvement than supply (cost) driven pricing. So create demand

4. If you’re launching a new product, do no employ a Price Penetration strategy without proper research on demand elasticity

5. Wherever possible, bundle services such as after-sales support that enable you to set a higher price and create customer stickiness

6. When setting price take all costs – fixed cost, variable cost, out-of-pocket cost, opportunity cost etc. – into consideration

7. Do not fall prey to the tendency of transferring product cost-downs immediately to price-downs

8. If you’re running a Small Business, consider the ratio of your fixed cost to variable cost, vis-à-vis your competitors when setting price

9. If you are an International operating in emerging economies, keep a close tab on your FX rate to prevent price and profit leakage

9.5. Always do a Break Even Analysis and set volume commitments towards your Account teams (and to your Customers, if necessary)