Send in the A team!

Welcome to the latest issue of Insights which, as you can see, has taken on a new look to reflect my obsession with the importance of the BRIC economies (Brazil, Russia, India and China) which continue to surprise on the upside and will, in the next 40 years, completely transform the way in which we think about global markets from an investment, export and business point of view. I hope you like the new look (you'll notice that the junk survived from the old version!) and will invite your friends and colleagues to take out a free subscription.
In this issue, I would like to share my five secrets to offshore success, having closely observed the successes and failures of Australian and other companies in their attempts to engage with new emerging markets, particularly in Asia.

1. Be a Leader not a FollowerIt is surprising that this even needs to be said, but I find it astonishing that many companies and entrepreneurs think that they can simply start distributing their products, services and expertise in a new foreign market without giving much thought to how they can stand out from the local crowd. As a new entrant, you have no choice but to offer something new, creative, innovative and exciting rather than a "me too" offering which will appear (even if there are subtle differences) as though you haven't done your research properly. Take the time to work out how you can enter the market with an offer that enables you to shine!

2. Give it time to get off the groundThe most common remark I hear about Australian companies in Asian countries is "they came to see us, we liked what they had to offer, but we never heard from them again"! There could be many reasons for this lack of follow-through but I suspect the main one is that we often enter a new market without the capital, resources, capacity and shareholder support to ensure that we can make it through the inevitably tough early years. After a while, the losses, distraction and strain on cash flow becomes so painful that we withdraw until a better time. Unfortunately, damage can be done from trying to re-enter a market from which you have previously withdrawn, so it would be better to start with more realistic expectations. To use a well worn expression: "Double your budget and halve your expectations!"

3. Build a sustainable businessWe all know how long it takes to plant a tree, which depends on a healthy root system, quality soil, plenty of water and an equitable climate, and how hard it is to uproot and re-plant it in a new location. The same applies for a business, which depends on the root system you have so carefully built since inception - distribution channels, supply chains, back office fulfillment, pricing models, human resources, suppliers etc. etc. It is not realistic to expect this intricate, complex, well honed and self-sustainable operating model to be easily transportable to a new country. When considering a move offshore, consider the impact, stresses and implications for every stage of your value chain, and consider how you can replicate your success in a foreign country. It can all be done, and you know how to do it. It just requires some time, thought and planning

4. Send in the A team!It is inconceivable that the Australian Cricket Team will tackle the next Ashes series in England whilst leaving their best players behind to compete in a domestic series. Yet this happens all the time with Australian business! Whilst we might not like to admit it, Australia is a small country in global terms so, when you start your offshore journey, start with success in mind and accept from the start that your offshore business will end up becoming larger, more profitable and more valuable than your onshore business. So, when you think about selecting your team to run your offshore business, start with your very best people. Don't fall into the trap of convincing yourself that these people are too valuable to the success of your local business. How else can you be confident of success?

5. Get started, do something, anything, NOW!!In my view, in global terms, Australia is a tough place to do business. Think about it. With a small population, a vast geographical area, over-regulation in most areas, high taxation, extreme competition and a shortage of skills, you have to wonder how anyone succeeds in this small, crowded market-place! So, if you are successful, profitable and competitive, why not consider all of those markets offshore which are so much larger, less regulated and more attractive than they are in Australia? Think about China and India, the world's two largest countries and soon to be the world's largest economies, who are both hungry for western ideas, innovation, technology, services and leadership! But, as the saying goes, "the time to mend a leaky roof is when the sun is shining!" so, whilst our economy is booming and business is thriving, take advantage of your success to plan and execute your next move offshore.

Please consider

Last chance to join our Think Global BRIC Study Tour to China - 21st to 27th October 2007 - please click here for more details

Asian Financial Forum in Hong Kong - 21st September 2007 - please click here for more details

Best wishes
David Thomas