1 effective business in emerging economies simon bedford thursday 8 th september - bradford...
TRANSCRIPT
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Effective Business in Emerging Economies
Simon Bedford
Thursday 8th September - Bradford University School of Management
10th August, 2011
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Programme
• UKTI views and coverage• World Bank and CPI• The influence of culture• Emerging markets – entry route• Views of some Yorkshire businesses• Top tips
BrazilRussia IndiaChina
ColombiaIndonesiaVietnamEgyptTurkeySouth Africa
Malaysia
Mexico
Qatar
Saudi Arabia
Singapore
South Korea
Taiwan
Thailand
UAE
Hong Kong
UKTI High Growth Markets
© UKTI Yorkshire 2011
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OMIS Top 20 Activity Markets
USAChinaIndiaBrazilJapanGermanyFranceUAERussiaMexico
AustraliaSpainNigeriaSaudi ArabiaSouth KoreaTurkeyCanadaSingaporeItalyNordics
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Risk Indices
World Bank – Doing Business Project– Economy Rankings– 183 countries– www.doingbusiness.org
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World Bank Rankings
Thailand 19South Africa 34Mexico 35UAE 40Turkey 65Vietnam 78China 79Russia 123Brazil 127India 134
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Risk Indices
CPI– Transparency International– Corruption Perception Index– 178 countries– www.transparency.org
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CPI
UAE 28South Africa 54Turkey 56Brazil 69Thailand 78China 78India 87Mexico 98Vietnam 116Russia 154
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Culture in negotiating styles
Culture can be a major factor in the success or failure of business negotiations
Be aware of the differences in buyer-seller negotiation styles in selected countries
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Culture
In negotiation with a distributor, or potential customer culture can be a vital ingredient for a successful outcome. How should we approach the meeting, and what signs should we look for in the decision maker.
Under the 4 headings below which of these very different words best describes what we can expect in our next overseas meeting?
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Culture Business style: Bureaucratic, formal, friendly, polite,
aggressive, Relationships: vital, important, distant, no importance, Approach in meetings: formal, systematic, repetitive,
open, freestyle, Decisions: Autocratic, key individual, democratic
group, top level team,
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China Meetings are formal.
Progress is slow and relationships will be built up over a series of meetings.
Language can be an issue and translators will probably be required.
As in many cultures “yes” can simply mean “I acknowledge what you have said”.
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India 15 official languages, English is universally spoken and is seen the
neutral language. Business is very hierarchical so it is important to identify the
decision makers.
An issue for UK companies setting up in India is operating a flat structure as in UK.
In meetings, small talk, particularly about the family is highly
valued as you build a relationship.
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Brazil
Meetings rarely start on time.
The agenda is not rigidly followed.
There can initially be a lot of small so patience is a virtue.
Relationships are important - your hosts will show their feelings openly.
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Culture shock
For more information see Useful Links – Culture Shock! – a survival guide to customs and etiquette - published by Marshall Cavendish
Also see www.worldbusiness culture.com
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Case Studies
Views of some Yorkshire businesses
Engineering company
University
Training and Consultancy
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Vietnam – Engineering company
Key advice from an operations viewpoint:
- Continue to develop relationships with Customs, Industrial Zones Management, Labour Department, Immigration, Tax and even the Police.
- Don't underestimate the amount of bureaucracy involved. - Keep yourself well informed on legislative issues & laws which are changing frequently as
easy to be caught out.
- In the earliest stages consider fully the scope of your business before you apply for your license, e.g to include trading, increase capital contribution, get further duty exemptions on capital imports.
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University India
People never say no but “yes yes” and “yes yes yes”
Pursue 2-3 activities Know who to work with Do not offer help or support but “working together” Great opportunities but not easy - Get experience
somewhere else!
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University
Vietnam
Young, eager, and a thirst for education and personal development
Good opportunities; keep going back.
Keen to learn from the “old & wise”
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University
Gulf region
Stop/start:moves fast when you are there!
Keep going back – send same person.
Wealthy but price sensitive.
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Training and Consultancy
Views of an “emerging market”
Look for a niche
Cultural awareness, tolerance, and sensitivity.
Go yourself or someone else fully briefed
Be prepared for the long game
Research the market Have a sound business plan Decide on your contract terms Know your partner Know the law Look for problems before they arise Develop good relationships Be a good communicator Protect your IPR Plan an exit strategy
Emerging markets - Top ten tips