Why Do Firms Fail In Asia? – Global Business Advice

Filed under: Global Business — November 7, 2014 @ 4:34 pm

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.

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.

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.

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.

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.

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.

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.

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.

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.

Check out our site: http://partnersinternational.com for more on international business know how

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1 Comment »

  1. Why Do Firms Fail Overseas? | Internationalbusi...:

    […] Quick article about firms failing in Asia….and how to prevent it!  […]

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