Major companies based in Asia and expanding outside their home market believe innovation and building brands will be vital to flourishing overseas, a poll of executives has found. Accenture, the management consultancy, polled 250 senior executives representing firms that it called “Asian globalisers”, as they have led the charge into foreign outlets.
When asked to compare their source of competitive advantage now and in three years’ time, providing high quality products and services topped the charts on both counts, with an unchanged score of 55%. The strength of brand equity recorded a leap from 32% to 44% on this measure, however, totals standing at 18% and 37% for intellectual property, the biggest such increases overall.
High-value innovation saw a lift of six percentage points in the same terms to 47%, whereas low-cost R&D slid by 16 percentage points to 29% and low operating costs were down by 34 percentage points to 20%. “What we are witnessing is a race among Asian globalisers towards a common sweet spot of selling high-value, high quality, branded, innovative products and services,” the study said.
“In a digital world where products can be quickly copied and commoditized, Asian globalisers will need to identify and protect their unique points of differentiation by investing heavily in localised marketing, customer insights and intellectual property protection.”
Upon discussing current obstacles to expansion, fully 61% of organisations cited a lack of understanding of foreign nations and customer segments. A further 53% pointed to the regulatory climate abroad. Having a poor brand reputation registered 35% here, while the strong position of global rivals logged 30%, and an inability to build trust with local stakeholders was on 22%.
The firms flagged up as good examples to follow were Fast Retailing, from Japan, which has localised its Uniqlo fast fashion chain and retained the brand’s core appeal. United Spirits, the Indian alcoholic drinks group, is also modifying the composition of some beverages to suit national tastes, while Chery, the Chinese automaker, has successfully tapped less affluent buyers in numerous markets.
Published with permission from WARC