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Asian
markets are attractive avenues of expansion and growth. They
provide huge markets with growing consumer groups, large educated
work force, low cost labor, lower-priced facilities, natural
resources and most of the people have a determination to work
hard and succeed. For revenue expansion, cost reduction, offshore
and outsourced manufacturing, Asia is the place to be. And
yet, 4 in 5 US businesses that enter Asian markets fail.
Why
do companies fail?
The two main reasons are to do with lack of understanding
of the Asian markets and inadequate planning for it. Asia
is a big continent of 3.5 billion people in 26 countries.
There are over 150 languages with many unspoken rules about
business, culture and trust.
Asia
creates Great Opportunities and poses
Huge Risks.
iga’s
sole purpose is to help US companies be successful in Asia.
With iga’s experience, understanding and connections,
we help companies avoid the landmines of unknown territories,
so that you can plan appropriately for your products or services.
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Most companies look at Asia as a huge market,
versus understanding the complexity in its diversity. Business
plans are either prepared by an in-house department that have
limited knowledge of Asia or business, or by an independent
consultant as an "Asian expert" who may recommend
actions that are impractical and therefore unprofitable. |
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It costs very little to sign a contract, but it can be very
expensive to support inactive distributors. Not to mention
the expense and difficulties in trying to get out of unprofitable
contracts. iga has set up over 200 performing distributors
in Asia. Let us help you find the right ones.
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Poor implementation defeats a great plan. Once distributors
are signed up, it requires skills and constant management
to ensure your products and services are supported adequately,
effectively and profitably.
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Many companies enter Asia for "bonus" revenue and
do not have a focus and do not know what is considered successful.
In addition, since the alliance partners are far away, they
often get minimal support from the US company.
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This is even less about language and more about culture and
"being on top of things". Out of sight often is
out of mind. Many distributors are out there doing whatever
they do by themselves, mostly selling other companies' products.
You cannot let that happen.
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What can be done in one country may be totally impossible
in another. Terms and conditions, including payment and delivery,
must be appropriate for the country you are doing business
in. Also, most countries are not as litigious as the US. Often
times it is relationship that get you paid, not your contract
terms.
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Because the US is governed by a Rule of Law, we assume other
countries are the same. The fact is, many Asian countries
still are governed by Rule of People to some degree. Often
times it is impossible to "sue" a company that did
not fulfil its contractual terms. So ACT wisely.
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This is a gray area to begin with, and it gets grayer and
grayer as we stray far from home. Act wisely based on knowledge
and connections can help tremendously.
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Simple as it may sound, many companies were successful "making"
money in Asia but could not get their money out of the country
they are in. So they may need to "barter and trade"
and are forced to start an import/export division. Know before
you get in.
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