As leaner beasts arrive, Myanmar's dinosaurs must adapt or go extinct

Loyal customers are the easiest to maintain, and always the most profitable. Rather than an expensive drive for new customers, a better business strategy would be to focus on ensuring that current customers stay loyal, and continue to buy your product or service.

The readers of this column are also its customers, and the customers of The Nation, and it is critical that they continue to enjoy reading, and are challenged and provoked by, these articles.

One of the wonders of technology is that it now allows tracking of interest. All Nation columns published online can be forwarded by e-mail or placed on Facebook or Twitter. At the bottom of every column we can see exactly how many times this has happened. 

So it is easy to understand which columns are forwarded, showing an interest and appreciation, and which are ignored. A column written earlier this year on how to make meetings more effective, which seemed to be an important and relevant subject, received virtually no pass-alongs.

Another column, this one on the perils of lying on your CV, received a significant amount of pass-alongs. One wonders why. If people lied on their resumé, why pass an article to theirs friends on the subject? Maybe people knew their friends had lied, and were forewarning them?

But by far the highest number of passed-on columns of mine have been those written about Myanmar. Obviously this is a subject of keen interest, and when a columnist realises what subjects are of interest to his readers, it makes a lot of sense to continue writing about that.

Today I am writing this column sitting in a coffee shop on Dhammazedi Road, metres from my office and hotel, on a grey rainy Saturday Yangon morning. The shop seems to be full of do-gooders, young NGO’s who are earnestly debating how to make Myanmar a more progressive, liberal, environmentally conscious, economically viable member of the global world community.

I couldn’t care less.

I am here to give a speech, as I do every year, to a group of local businessmen (and some government officials) who want to learn what to do when the market opens. This is the fifth market opening at which I have participated, having worked in the former Soviet Union when the Berlin Wall fell in 1989 and suddenly the economies of East Germany, Russia, Poland, Czechoslovakia and Hungary were exposed to the West. I also worked in South Africa when the sanctions were lifted, in China in the early years of economic liberalisation, and more recently in Vietnam.

All market openings follow a similar pattern. International companies flood in, and either buy or destroy local companies. Local companies, who for years succeeded in a restricted environment by selling inferior products, suddenly can no longer compete. Multinational companies have better products, better systems, more transparent finances and pricing, and more efficient means of production. What the multinationals lack is local knowledge, which they remedy by hiring key people from the local companies. So the local company not only faces a competitor that is better in almost all respects, but also faces a significant brain drain.

The local company needs to decide whether to fight, close down or sell out. Assuming that closing down is not an option, selling out or fighting both require the same strategy.

First, the company must develop a strategy. Not a meaningless vision statement but a well-documented action plan that clearly delineates what must be done and who is to do it.

Second the company must both protect its current key employees but also upgrade its personnel, possibly by hiring expats who can bring a level of sophistication that the company does not currently have.

Third, the company must upgrade the quality of its product and service offered, by raising itself to international standards.

Next, the company must upgrade all its systems and processes, its factory and distribution.

Last, the company’s finances must be put in order, and transparent accounting with one set of books only, implemented.

Myanmar will change over the next years and decades, companies will succeed and fail. Those who wish to maximise their chance of being survivors must have a clear path in front of them. They only need to have the foresight to know what to do. 

Postscript: I am now writing after the speech has been given. It scared the audience, who didn’t dream that the market-opening could present severe challenges as well as opportunities. I have been invited to give the speech to the government here in January, as many felt that it was vital that the government understand these same issues.

 

Eric Rosenkranz (www.ethree-asia.com) runs a strategic advisory in Southeast Asia assisting existing companies as well as start-ups to develop their long-term strategy and achieve success in their business. He can be reached at [email protected].