HOW TO SET UP BUSINESS IN ASIA

NUMBER 1

Intellectual property rights are the legally recognized exclusive rights to creations of the

mind. Under intellectual property law, owners are granted certain exclusive rights to a variety

of intangible assets, such as musical, literary, and artistic works; discoveries and inventions;

and words, phrases, symbols, and designs. Intellectual property refers to creations of the

mind: inventions; literary and artistic works; and symbols, names and images used in

commerce. Some of the relevance for protecting intellectual property:

Theft: Most obvious is a moral issue. It is just plain wrong to steal something that belongs to

someone else but in the real world, people take what is not theirs. And if you have not

found a way to at least deter someone from taking your work, you can be assured that it will

be copied and used to another's benefit.

Loss of Reputation: In situations where you are an expert in a field, when others use your

work in fleeting or inappropriate ways, your reputation as an authority is decreased. You are

somehow attached to the negative work of the imposter. Additionally, if your property has

been used for illegal gain, you might find it difficult to prove that you were not involved.

Government play a crucial in intellectual property by putting the right laws, policies and

regulations in place for intellectual property to be protected and disciple to be melt out on

offenders. They also encourage inventors to thinking outside the box and generate ideas.

Number 2

Communications: Cultural misunderstandings arising from miscommunication are one of the

biggest challenges which foreign companies and mangers face in Asia. Although there are an

increasing number of Asia people highly proficient in English, it is uncommon to find someone

who understands the subtleties of the language and possesses a strong enough understanding

of both Chinese and western culture to navigate delicate business negotiations. Even while

communication between the foreign manager and Asians companies goes smoothly at first,

things start to break down as business issues get more complex and the Chinese side has

difficulty explaining to the foreign manager practices that are unique to Asia in a way that is

understandable to a western audience.

Business Culture: For managers to succeed in Asia, they must realize that it cannot take the

same business model, which may have served you well in their own country, and simply apply it

to the Asian market. They will need to be flexible and adjust to a country that practices business

according to “Asian characteristics” deeply related to its traditions. Due to these differences,

many business practices in Asia do not always conform to commonly accepted international

standards.

Number 3

Exporting

Exporting can be defined as the marketing of goods produced in one country into

another. Whilst no direct manufacturing is required in an overseas country,

significant investments in marketing are required. The tendency may be not to obtain

as much detailed marketing information as compared to manufacturing in marketing

country; however, this does not negate the need for a detailed marketing strategy.

Some of the advantages of exporting are: manufacturing is home based thus,

it is less risky than overseas based gives an opportunity to "learn" overseas

markets before investing in bricks and mortar reduces the potential risks of

operating overseas.

Licensing

Licensing is defined as the method of foreign operation whereby a firm in one

country agrees to permit a company in another country to use the

manufacturing, processing, trademark, know-how or some other skill provided

by the licensor. It is quite similar to the franchise operation. Coca Cola is an

excellent example of licensing. Licensing involves little expense and

involvement. The only cost is signing the agreement and policing its

implementation. Licensing gives the following advantages: Good way to start

in foreign operations and open the door to low risk manufacturing

relationships, Linkage of parent and receiving partner interests means both

get most out of marketing effort, Capital not tied up in foreign operation

Joint ventures

Joint ventures can be defined as an enterprise in which two or more investors

share ownership and control over property rights and operation. Joint ventures

are a more extensive form of participation than either exporting or licensing.

Joint ventures give the following advantages: Sharing of risk and ability to

combine the local in-depth knowledge with a foreign partner with know-how in

technology or process, Joint financial strength

Wholly Owned

The most extensive form of participation is 100% ownership and this involves

the greatest commitment in capital and managerial effort. The ability to

communicate and control 100% may outweigh any of the disadvantages of

joint ventures and licensing. However, as mentioned earlier, repatriation of

earnings and capital has to be carefully monitored. The more unstable the

environment the less likely is the ownership pathway an option.

Before setting up in Asia, organisation must first evaluate its internal

strength and weaknesses to decide if they are actually ready for

global expansion. if the outcome is positive, the organisation can

then conduct evaluation on the broad environment of the particular

country in Asia, SWOT analysis is also required to determine their

Strength, Weakness, Opportunities and potential Threats that lies in

the environment. Usually, it's always on the particular industry the

company is willing to enter. Locally source resources and corporate

social responsibility must be consider. Pricing strategy is another

important aspect to emphasis before deciding the mode of entry.

Number 4:

Marketing communications is a subset of the overall subject area known as

marketing. Marketing has a marketing mix that is made of price, place, promotion,

product also known as 4ps.

PRODUCT: Exactly what product or service are you going to sell to this market?

Define it in terms of what it does for your customer. How does it help your customer

to achieve, avoid or preserve something? You must be clear about the benefit you

offer and how the customer’s life or work will be improved if he or she buys what you

sell.

PRICE: Exactly how much are you going to charge for your product or service, and

on what basis? How are you going to price it to sell at retail? How are you going to

price it at wholesale? How are you going to charge for volume discounts? Is your

price correct based on your costs and the prices of your competitors?

PLACE: Where are you going to sell this product at this price? Are you going to sell

directly from your own company or through wholesalers, retailers, direct mail,

catalogs or the Internet?

PROMOTION: Promotion involves disseminating information about a product, product line, brand or company. Promotion includes every aspect of advertising,

brochures, packaging, salespeople and sales methodology. How are you going to

promote, advertise and sell this product at this price at this location? What will be

the process from the first contact with a prospect through to the completed sale?

NUMBER 5

LOOKING AT THE GLOBAL ENVIRONMENT: The analysis of the global

environment of a company is called global environmental analysis. This analysis is part of

a company’s analysis-system, which also comprises various other analyses, like the industry

analysis, the market analysis and the analyses of companies, clients and competitors. This

system can be divided into a macro and micro level. Except for the global environmental

analysis, all other analyses can be found on the micro level. Though, the global

environmental analysis describes the macro environment of a company.

DECIDING WHETHER TO GO ABROAD: Deciding Whether Your New Market Should be

Abroad If you’ve been thinking about expanding your business into a new market you may

be trying to decide whether to go abroad or stay domestic. This can be a complex decision

with much to weigh out. Most companies would rather stay domestic if the market share is

large enough. After all, it’s far less complicated and less costly to do business in a local

market. When you are deciding whether you new market should be abroad, you need to

consider the following: Your managers and staff may have to learn a new language Laws will

have be learned and understood Currencies can be volatile Political uncertainties

DECIDING WHICH MARKET TO ENTER: The company must also decide on the types of countries to consider:

Market Attractiveness is influenced by income and population, product and communication adaptation costs, dominant foreign firms as barrier to entry, political-legal-culture environments

Market risks e.g. Tang, product of General foods, fails to market in France because Tang was positioned as substitute for orange juice during breakfast. The fact is the French people seldom drink orange juice and even never at all during breakfast

Competitive advantages on 4P’s – product, price, place, promotion, marketing infrastructure (technology), management and human resources, and capital resources

Deciding how to enter the marketOnce a company decides to target a particular country, it has to determine the best mode of entry. Its broad choices are

Indirect export: the company work through independent intermediaries e.g. domestic-based export merchants (buy and sell products abroad), and domestic-based export agents (trading companies are paid a commission) Indirect export has less investment (no export department, sales force, contracts) and less risk

Direct export: the company wants to handle its own export. the investment and risk are somewhat greater, but so is the potential return the company work through export department, overseas sales branch, sales representatives, and foreign agents

Deciding how to enter the marketAfter undergoing the previous processes, the company can then decide which mode of entry to adopt in entering the market. For example the company may decide to use Joint venture which require them to partner with local investors in which they share ownership and control e.g. coca-cola and nestle joined forces to develop the international market for “ready-to-drink” tea and coffee

NUMBER 6

Global standardization in marketing is a standardized marketing approach that can be used

internationally. This type of marketing strategy conforms to work across different cultures

and countries to promote a product.

Adapted Global Marketing is a strategy for international marketing that

prescribes adjusting the the marketing mix for each target market. This

strategy generally incurs higher expenses, but aims to gain higher market

share and better returns.

Companies apply Standard global marketing strategy when going abroad to

market their products to work in every part of the global market. Firms also

apply this strategy to give their product a certain standard and same

positioning strategy around the globe.

Companies apply Adapted Global marketing by understanding each market

culture and tailoring its strategy towards the environment in which it

operates. Companies apply this system by using what each market is

familiar with in order to gain high market share.

NUMBER 7

STRAIGHT PRODUCT EXTENSION is the practice of releasing an existing product without

making any changes to it while releasing it to a foreign market. This practice can be used

without negative repercussions. Consideration however must always be made in the impact

to culture and other environmental factors a product may make.

PRODUCT ADAPTATION is a Marketing strategy whereby new products are

based on modification or some improvement on existing or competing

products, and not on pioneering innovations. It is the strategy of a

follower.

Product invention is the creation of new products or services for foreign

markets. Invention of a new product in foreign market based on what the

market is lacking or required.

Straight Product Extension can be used when entering a foreign market

considering the type of product. for example apple products does not need

any change when going to foreign market, however some of their marketing

mix will be tailored towards the local environment.