Why Companies Fail In Asia

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 many 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 or manufactured in 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 3.6 billion people in 25 countries. There are over 140 languages with many unspoken rules about business, culture and trust.

 

Asia creates great opportunities and poses huge risks. Global Intercon’s sole purpose is to help US companies be successful in Asia. With Global Intercon’s experience, understanding and connections, we help companies avoid the land-mines of unknown territories, so that you can plan appropriately for your products or services.

 

Most companies look at Asia as a huge market and manufacturing capabilities, versus understanding the complexity in its diversity. It costs very little to sign a contract; however, it can be very expensive to support inactive distributors, not to mention the expense and difficulties in trying to get out of unprofitable contracts. Let us help you find the right supplier for you.

 

Poor implementation defeats a great plan, it requires skills and constant management to ensure your products and services are supported adequately, effectively and profitably.

 

Many companies enter Asia for "bonus" revenue and low cost manufacturing 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. This is even less about language and more about culture and "being on top of things." Out of sight often is out of mind.

 

Because the US is governed by a Rule of Law, we assume other countries are the same. The fact is, many Asian countries are still governed by Rule of People to some degree. Often times it is impossible to "sue" a company that did not fulfill its contractual terms. So ACT wisely.

 

This is a gray area to begin with, and it gets grayer and grayer as we stray far from home. Acting wisely based on knowledge and connections can help tremendously. This is where Global Intercon and experience consultants with decades of experience working with and working at Asia come in to help our clients to bridge the gap.