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AUGUST 2015 BRIEFING
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SH INTERNATIONAL LLC


AUGUST 2015 BRIEFING


The Multi-Regional Approach
 
Dear Clients & Friends of SH International:
 
Last month, emerging markets stocks took a plunge, “led” by China. This news was not – in the macroeconomic, long-term view – news at all. Emerging markets are emblematic of this basic principle: The “conjoined twin” of high reward is high risk. Instead of avoiding emerging markets, companies should focus on markets where their product or service has a sustainable competitive advantage.
 
Despite global contagion risk, geographical diversification is critical because it mitigates other risks, especially when coupled with a long-term outlook. How do businesses diversify across regions without maintaining a gargantuan structure and overhead? One powerful approach is to leverage partnerships, as well as specialized resources like those of SH International.
Emerging Markets Partnerships
Let’s Make a Deal
 
It takes two to tango, and (at least) two parties to make an emerging markets deal or partnership.
 
To set the stage for an emerging markets deal, there is much work to do: analyzing the local market, assessing the regulatory climate and macroeconomic conditions, and defining a clear value proposition. Even if all details are meticulously planned, signing a deal with the wrong partner can lead to spectacular failure.
 
Working with a partner translates to a loss of control, as all decision-making power is not housed under the same corporate structure. Incentives, however carefully aligned, can diverge, leading to friction and loss of profitability. These issues arise in all business, but are dramatically exacerbated in the emerging markets environment, which is more often than not defined by a weaker rule of law.
 
While the contract is the first and last step in maintaining a partner relationship in a developed nation, in the emerging markets context, the contract is just one piece of the puzzle. In this context, contracts should not be used as the sole point of compliance leverage, and careful relationship management needs to be active and ongoing.
 
However, signing the deal with the right partner can lead to spectacular profits. The partner can provide on-the-ground intelligence on the constantly shifting local market and regulatory landscape. The partner can leverage their local resources and relationships on your behalf, allowing you to maintain a leaner, more efficient operation at home and on the balance sheet.
 
We have found that the incredible efficiencies that partnerships can bring can be game changers. For instance, one of our clients is looking at a 40-50% increase in total company revenues (domestic + international) in the coming year due to a partnership in the Middle East we put in place for them this year, with little to no increase in overhead expenditures. Following this success, we are strategizing together on which market will be the best starting point for them in Latin America.
The Multi-Regional Approach
How Global is Your Vision?

A firm that focuses on any one particular region, such as South Asia, is unlikely to advise you that it is better for your firm to expand into Latin America. This is just one reason why it is more powerful to work with a firm that has a perspective informed by experience across regions.

The multi-regional approach is also critical because trends in one region have implications in other regions - as illustrated by last month's decrease in emerging markets stock prices sparked by China
, or by the past year's creation of the New Development Bank (aka "BRICS Bank").
 
So it is critical to our integrity, and to our ability to provide informed perspectives to our clients, to have capacity across emerging market regions. This also enables our clients to grow with us in multiple markets, and to gain from the invaluable efficiencies of not having to start over in each country with a different firm.
 
We are a small, boutique firm by design, with global capabilities. At the core of our ability to work across multiple regions is the global vision and on-the-ground business experience of Principal of SH International, Sara in regions across the globe, as well as her business proficiency in six major world languages. Her core strengths are infinitely amplified and strengthened through leveraging a proprietary network of resources, specialists and partnerships on an as-needed basis.
 
This model does for consulting what just-in-time inventory processes did to dramatically boost the efficiency of manufacturing operations. We deliver powerful outcomes without extensive overhead, enabling us to work on the results-oriented basis that our clients love us for.
 
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ABOUT SH INTERNATIONAL LLC

We expand businesses through emerging markets deals, ventures and initiatives. We leverage a proprietary network of resources, specialists and partnerships to achieve powerful results. Based in multilingual and practical experience on five continents, we provide your company with truly global vision. Learn more...
Copyright © 2015 SH International LLC, All rights reserved.


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