Jun 16 2010
The Pace of change
Asia is changing pretty fast. The region has an ageing population but also a relatively young one. As GDP growth picks up and lifestyle changes continue, there are indeed an increasing number of market opportunities in Asia. Managing headquarters expectations about “markets of billions” (China and India) will become an even bigger challenge for regional executives. Demands for higher margins and pressures on selling, general and administrative costs are likely to increase.
Other interesting sub regions, such as ASEAN, should also continue to receive management attention as companies finalise their 2010/11 plans. Complexity in managing relatively small but still diverse markets is best dealt with by having an on-the-ground presence. However, with opportunities come problems and challenges too; increasing opportunities also means an increasing number of competitors.
Competition and The War for Talent
Competition in Asian markets is likely to become extremely fierce as the global economic markets become to recovery and organizations resume expansion strategies. Making things more complex, competition in Asia can come from many unexpected sources - companies which some HQ staff have probably never heard of can suddenly appear on the top 10 list in the region. In addition, a number of the leading local companies in some markets will transform themselves into even more formidable competitors with local and insider competitive know-how about operating successfully in regional markets. A number of these companies are also increasingly stepping outside their national boundaries into neighbouring markets.
To become successful and continue being successful in Asia requires that most companies give up their traditional and structured planning, entry and operating approaches that they feel comfortable with. Opportunities are likely to appear suddenly and unexpectedly and to capitalise on these successfully will require making decisions based on limited market facts.
Essential to capturing these fast appearing opportunities and remaining competitive in the marketplace is a strong talent management strategy. Sourcing and retaining superior talent, which continues to be in relatively short supply, is a continuing challenge for many companies in the Asia-pacific region. As the talent base gets narrower, both in terms of sheer numbers and also quality backed by regional experience, the war to retain the best is going to get fiercer – salaries are likely to increase and the use of expatriates will continue until local gaps can be filled.
7 Rules to Winning in Asian Markets
In conclusion, some ground rules for successfully operating and overcoming 2010 and mid-term challenges in Asia can be summarised as follows:
- Aim to generate self-sustaining growth in highly competitive and at times complex operating environments;
- Learn, respect and stick to individual market rules;
- Look at each development opportunity on its own merits. These may be quite different from the traditional markets outside Asia;
- Aggressively implement life-cycle management strategies. This may also require building a case for the mature brands which die only slowly in most of Asia and which are increasingly less important in the traditional European or US markets. Think of brands more broadly than in narrow therapeutic terms (company image, corporate social responsibility etc). Focus on further building existing brands and ignore the Intellectual Property (IP) constraints which will not go away;
- Proactively implement talent management strategies. Nurture “local champions” in each market and give them the necessary corporate visibility. Build teams comfortable with change and a rapid change of pace;
- Exploit short-term opportunities to address HQ perceptions and manage for the longer term. Be aware that internal priorities and allocation of responsibilities can sometimes change more quickly than the market, and often be influenced by what is happening back home;
- Be prepared for surprises, internal and external, every day.
BlueSteps Member Guest Writer
Salman Bokhari has extensive senior level experience within the industry in Asia and is currently based in Singapore as an independent healthcare consultant. He can be contacted at firstname.lastname@example.org