GEARING UP FOR GLOBAL BUSINESS OPERATIONS

by Dr. Ng Yan Goh, Ph.D.

I have been through the last recession in the 80's and caught very unprepared as a young confident professional who is convinced that Malaysian boleh. After spending some eight years in Liverpool and another year or so in Singapore, I decided to venture into the business world offering my professional services. My biggest mental shock is that the Malaysian business world at that time was about "who you know and not what you know". It was a bitter sweet experience so after running out of working capital the only way out was to use the brain power to create products and resell them. Today, the initial few customers who have faith in our products and services are either publicly listed or on the way. They bought our products and services because of what we know. 

As I travel I have discovered the world is full of wonders and one place which has impressed me deeply is the Rodeo Mall at Rodeo Drive, Beverley Hills, California, USA. Beverley Hills and Hollywood provide the environment for dreamers and creative people to come out with products which can entertain the people the world over. This may be the place for me to test out the start of a global business operations for Malaysians like me. 

When I decided to return to Malaysia in the 80's I have been very impressed with Dato Seri Dr. Mahatir's premiership which started with the slogan "Bersih, Cekap dan Amanah". Now that we have a severe economic turmoil, it may not be too late to transform our enterprises for global operations. Being a perpetual optimist, I believe that whenever there is a will there is a way. 

With the government's call for buying Malaysian products to reduce trade deficits, it is good news for those who already have locally made products. However, the challenges are for us to ensure that the Malaysian products are not of inferior quality and the after-sales service is at par with the international products. It gives us the opportunity of creating a nation of self sufficiency and core competencies. 

Problems of Going Global 
There are a number of pertinent issues to be resolved when we plan to go global and have local presence throughout the world, for example understanding local culture; government regulations and legal matters; trade practices; labour and union matters; competitors; the market; enterprise development; and the management of technology, business process and people Sometimes it may be better to seek help and advice from authorities or even consultants to make sure that the new business operations can take off smoothly. 

We need to make strategic decision of whether to appoint distributors, have joint ventures, setting up representative office, have a fully staffed local operations or try something more adventurous in the form of a virtual mall. Dell Computers of USA, a relatively young multi-billion dollar PC company, is expecting US$1 billion sales of computers over the Internet in 1998. 

There is a need for very effective marketing. Traditional wisdom is to have the right mixture of PR, launching, advertising & promotion, trade shows and other marketing techniques which are suitable for the products in questions. 

Key Issues to be Addressed Prior to Global Operations

1) Branding & Trade Marks
To highlight the importance of branding let's take the two names Reebok and Trex. Which one is more familiar to you and the global market? Reebok is one of the leaders in sports shoes and is a must have for the ones who needs to be upbeat and wanting to be seen. Trex is a new brand created by one of my business associates in Malaysia but has not made it to the global market yet. Reebok is at least five times more expansive than Trex so what is the logic? Besides branding we have to tap the potential of patents and also come up with attractive trade marks. 

If we look back history, the slogan "Guiness Stout is Good for You" helped the brand Guiness Stout to be popularised. It takes a combination of activities to make a brand successful. There are success stories on Malaysian brands like Bonia, Follow Me, and Padini, just to name a few. It remains an immense mental challenge to create brands which can have similar effects like Colgate for tooth paste and Xerox for photocopying. 

2) International Marketing
In the automotive industry, companies world wide have been known to lose billions of dollars for failing to achieve the economy of scale. The British Leylands has been a classic example of over protection from the British government making it uncompetitive resulting in the divestment to foreign companies like Ford of USA and BWM of Germany. The game of international marketing must be learnt and improved in order to compete. The art of war is to be innovative and creative. For those who knows Yahoo, it has become a sizeable Internet search engine of choice and has one single address in the global village, www.yahoo.com, but it is planning to set up another one in Singapore to provide better regional customer service. 

3) Self-impairing Syndromes 
The influence of the British colonialism and the big brother syndrome of the multi-national corporations (MNC's) sometimes made us feel very small. This experience lead us to some kind of inferiority complex which we find it difficult to admit. They may not be big bullies but they are in the business of survival and they know that ultimately the winners take all, or almost all. 

There are other syndromes which I have encountered of late, for example Kia-Su and Kia-Si. The Kia-Su syndrome has been commercialised and the Singaporean entrepreneur who is producing Kia-Su toys and souveneirs is making good money. Kia-Su is about the fear of losing (in Hokkien) but sometimes it can imply must win attitude. A Kia-Su person will want to buy the latest products. ideas, trend, etc. The Kia-Si person is one who is afraid to die (in Hokkien) or in principle afraid to try new things,and ideas. In order to progress fast it is better to be Kia-Su than Kia-Si.

If I did not take the plunge and furthering my education at the University of Liverpool rather than being a confident "Ah Piah" (the nick name for engine boys, or engineering students) Fifth Collegian studying at the University of Malaya, then I may believe that the West is more superior than the East. The real crunch may lie in the education system itself where in the West we are encouraged to put in efforts to develop creativitiy and innovation. I was able to do well in studies finishing with a first class honours, develop a very high degree of independence, acquire the skills for creativity and innovation, enjoys perpetual learning, and realise the importance of high performance teaming (a lot of times I did not have the best classmates with me). 

4) We are Okay 
This is like after watching the movie "Tomorrow Never Dies", we are make to believe that James Bond and Michelle Yeoh will never die. So if we behave like 007, we are okay. It is the very fact that we think that we are okay that we become satisfied very easily leading to complacency. The recent experience with the national economy is a real life case study. The economic growth has been impressive but we may have overlooked the free trade and open global competition and the impact of the fund managers and currency traders and their opportunistic business operations. Whatever they are doing are not really illegal but what they wanted are to make quick money. 

5) Act Local and Think Global 
When a trade mission from US Washington State visited Malaysia in the early 90's, one representative was interviewing me regarding corporate vision and mission. After listening to my passionate presentation, he asked if I actually got all my business ideas from the book "the Global Paradox" by John Naisbitt. I was so excited that I rushed to the MPH and got a copy of the book. The biggest message we get from the book is to "Act Local and Think Global". 

Microsoft's headquarters is in the state of Washington and is the largest software house in the world within ten years or so. 

The US market has been the testing ground for enterprises which aims to be in global operations. I like this story by Mr. Adam M. Brandenburger from Harvard Business School and Mr. Barry J. Nalebuff from Yale School of Management. In their audio cassette on "Co-opetition" they compared the enterprises known as Nintendo and Sega and explained how Nintendo becomes a global player in the video games business over a very short period of time. 

6) Global Competition 
Creative Technology, if my memory did not fail me, was a pretty small outfit operating from Changi Village manufacturing arcade machines and Apple clones when I first visited them. Today it is an American public listed corporation with the Singaporean heritage and Mr. Sim remains on board. It sufferred huge losses not too long ago due to the paradigm shift in the sound and video card technology but has been able to turn around and face the perpetual global competition. 

There are still very few Malaysian corporations which are global players. This in fact remains one possible strategy to get Malaysia out of the economic turmoil faster than Korea, Thailand and Indonesia. We cannot blame the Americans, Europeans, Japanese, communist Chinese and others if we have lost the game of global competition.Unfortunately it can come in different forms and strategies as we have learnt the bitter lessons recently.

The law of the global village is very similar to the jungle where the fittest will survive. It is time for us to have a very open confession, realise our strengths and weaknesses, come out positive with the idea than if we are prepared to change there is still hope. However, we need to be professional, take charge, get going and get the enterprise in order so that we can face new challenges. 

The global competition is ever evolving and it does not give us luxury of time to ponder and be undecided on what to do next. We need to learn how to wake up from the nightmare and recover quickly to face up maybe yet another nightmare. Once we can be positive we should be able to shoulder the extra stress and pressure to move forward and come out with new ideas, strategies, new products and services and re-position ourselves for new business opportunities. 

7) Forum for Business Review 
DB Business Review has been set up with the view of providing the forum for the dissemination of the body of knowledge, electronic forum for the exchange of opinions and knowledge, the platform for the virtual mall, and the communications hub for enterprise development. Special interest groups will be set up to ensure that the global village is a much better place to live in. 

The Business Review has the vision of providing leadership for enterprise development. The mission is to ensure that it is global in nature through virtual partnering, virtual agile teams and all other attributes of Agility. Although it is founded in Malaysia it will address issues relating to enterprise development, Agility, resource management, and leadership throughout the world. It is open to everybody and it is apolitical. 

The Business Review will network with SIRIM, FMM, MITI, MALTRADE, and any other organisation which is directly and indirectly dealing with Malaysian enterprises gearing up for competencies in the local as well as global markets. 

The Way Ahead 
Let us put together all the resources and make the world a better place to live in. We may not be able to learn from Singapore because of the fact that it is much smaller country but we have a lot to learn from Taiwan which is about the size of Malaysia.

The Taiwanese have over the years built up core competencies and have brands and products. We have to begin training Malaysians who are able to take up the responsibility of transforming Malaysian enterprises into global players.