Equiteq’s CEO, David Jorgenson, and Jean-Louis Michelet met with Professor Kevyn Yong (Dean of ESSEC Asia-Pacific and specialist of entrepreneurship) at ESSEC Business School in Singapore to discuss the opportunities and challenges impacting M&A activities in the Asia-Pacific region.
This is the third part of their discussion: What advice would you give to consulting firm owners in one of the Asia-Pacific countries?
The consultancy landscape in Asia-Pacific has changed in the last few years. There has been a strong development in the use of consultants as the regional economies have grown and become less dependent on the primary sector, and have seen a surge in secondary and services sectors activities.
A 2016 report from the United Nations Economic and Social Commission for Asia and the Pacific shows the increased activity in the services sector is partly down to its role in facilitating global value chains in the manufacturing sector. It also attributes this to the growth of digital-intensive services in sectors like financial services, telecommunications and digital media and marketing.
As business technology permeates every facet of business, here are five tips to becoming a successful consulting firm in an Asia-Pacific services market undergoing profound transformation:
- Develop an international perspective – Historically, while APAC companies haven’t been avid users of advisory services, there is now increasing demand for these services as organizations look to internationalize and diversify.
It is crucial then to develop a consulting firm with an international perspective. Your business should look to global trends – and work to international standards – to remain relevant to regional clients that want to increase their chances of international success.
Beijing-based Spearhead IMC Group’s acquisition of the American mobile advertising firm Smaato is one of the latest examples of Asian businesses looking to international firms to get closer to a wider customer-base.
- Service international clients from your domestic market – Having an international perspective doesn’t always require establishing a physical international presence immediately. Expanding internationally before you are ready would cost the business excessive time and resources.
Instead, it is advisable to start servicing clients internationally from your domestic market, which limits the risk of spreading yourself too thinly. Succeeding in new markets is particularly challenging in Asia where there is great heterogeneity even between neighboring markets, let alone far-away, ‘exotic’ ones. If you do decide to expand overseas, ensure that you have put in place the strong processes you need to take on the challenge.
See our blog on the 4 common misconceptions for expanding internationally for more useful tips to expanding abroad.
- Focusing on your niche – this is a great way to fine-tune your proposition to clients and future buyers. Trying to be everything to everyone would dilute your value in the long run.
Gone are the days when businesses employed a single consultant or service provider for all of their needs. Larger organisations increasingly favor a multi-sourcing approach in order to have access to the specific expertise they require for different parts of their business. Therefore, only truly specialist firms will be in a position to win these opportunities and build valuable relationships.
Developing niche expertise will make it easier for potential clients to identify your value proposition and for you to attract the right kind of clients and potential buyers.
For instance, Activeo’s acquisition of Kasturi Technology and of a minority stake in Justfeedback, both Singaporean businesses, underlines the potential for specialized, knowledge-intensive consultants in the region.
- Share information about your business – Loss of intellectual property (IP) is sometimes seen as one of the risks of doing business in Asia-Pacific. We often encounter businesses that are cagey about what they consider to be their ‘trade secrets’.
However, we encourage you to share as much information as possible about your business and services with clients and prospects. Doing so is necessary to demonstrate your expertise to clients, prospects and buyers.
Tip: Don’t worry about imitators, because while strong IP may be easy to identify, it’s notoriously difficult for your competitors to replicate.
Check out this blog more details on how to safely share your IP and necessary information when marketing the business.
- Finally, look for diversity when building a team of experts. Focus on bringing in specialist skills and knowledge that your team doesn’t possess. Identify talent from people outside of your immediate network.
This is also true externally. Get advice and guidance from trusted professional mentors and advisers who are familiar with the challenges you are facing.
Tip: This is the attitude you’d expect from your client when they take you on. So, practice what you preach.
This blog is the third in the series of blogs on the Asian-Pacific M&A market outlook. If you’ve missed the earlier parts, click here for the first blog on the challenges and opportunities in Asia-Pacific; and click here for the second part on how the differences between regional markets impact M&A activities.
If you are ready to sell your business or discuss your plans to sell, please get in touch with us for a confidential chat.
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