Thai companies must be 'less shy' about expanding abroad
The challenge is not only to be strong locally, but also to show ambition overseas
Dominique Turpin, president of IMD, a leading business school based in Switzerland, said recently that Thai executives should become “less shy” and look to expand their business more aggressively across borders or risk being acquired by multinational companies.
In an exclusive interview with The Nation, Turpin pinpointed the three biggest challenges facing today’s businesses – dealing with uncertainty and “unpredictability”, dealing with the people issue to ensure the successful execution of strategies and dealing with the challenge of globalisation.
“Having to deal with both – the harmonisation of consumer tastes but also at the same time the major consumer differences.”
“For all Japanese and Western companies, growth opportunities are no longer at home anymore. All big firms are looking for new opportunities in Asia, Latin America, India, Africa and so on.”
And since multinational companies have found acquisitions the quickest way to grow in these new markets, there is a need for Thai companies to be agile and strong, not only in Thailand but also outside the country, or risk being taken over by their foreign rivals.
“And speed is a growing important dimension too,” he said.
The Thai market is big enough but the challenge for Thai firms is to be strong in the local market and also to try to be more “entrepreneurial” outside the country.
“Thai companies and Thai executives tend to be too risk averse or too conservative,” he said.
Thai firms that traditionally look at US companies as a model to follow should take more lessons from European corporations that are more globalised than US or Japanese companies.
“If you take Nestle, they have 13 people in top management and they have 11 different nationalities. The head of Nestle India is now a Brazilian. The COO of Unilever now lives in Singapore...because that is where the action is going to be,” he said.
Turpin also spoke about the growing influence of “big new players” like China and India, and “probably also Indonesia”, which is attracting a lot of interest from foreign investors.
“I just came back from Malaysia. They are so aware of the rise of Indonesia. And they are trying to invest in business services, and so on [in Indonesia],” he said.
To brace for the future, the Thai government should lay down a national plan to improve the competitiveness of the country in areas such as infrastructure, regulation and attractiveness to foreign direct investment. Thai firms should become more focused and find ways to thrive on the “narrowed niches” as well as to invest more on executive education.
“Because at the end of the day, what makes the difference in any business is people. You need to have people who are visionary, have a great sense of leadership, who can think beyond Thailand and Asean...who think ‘What are the opportunities for us globally?’”
“As I said, Thai executives tend to be a little bit shy.”
When considering innovations, Thai executives very often think about “product innovations” but it is very important today to also look at “business model innovations”.
“It’s very important today to look at innovations with a much broader perspective. If you look at low-cost airlines...these people find unique ways to compete.”
Companies should also derive more benefits from social media by empowering their young executives in planning and executing social media as a tool to communicate with consumers. “The problem is that many senior executives are at my age, 50 plus, and they don’t understand social media,” he added.
