Copy
SEPTEMBER 2015 BRIEFING
View this email in your browser
 

SH INTERNATIONAL LLC


SEPTEMBER 2015 BRIEFING


The Relationship Issue
 
Dear Clients & Friends of SH International:
 
Relationships are especially critical in emerging markets, where their value is amplified due to a weaker rule of law. Savvy business people are thus forced to ask themselves, “Who can I trust based on their reputation and our relationship?”

In this month’s briefing, we will consider the value of exclusivity in commercial relationships, and explore how to turn around troubled commercial relationships.

While we have a wealth of emerging markets specific knowledge, the real secret to our powerful results is the network of high-level relationships across the globe that we can leverage on behalf of our clients. For emerging markets deals, ventures or initiatives requiring relationships outside of our current networks, we are adept “relationship entrepreneurs,” and take pride in building new bridges to enable our clients’ visions.
 
Exclusivity?
Considerations on Taking This Step
 
We often work with businesses that are considering granting exclusivity to a partner company to develop a particular business opportunity. We ourselves often take exclusivity when representing a company in an emerging market deal, venture or initiative.
 
Some advantages of giving a business partner exclusivity:

-They may be better incentivized, delivering stronger results

-They may agree to more favorable terms for your company than they normally would

-They may take a longer-term interest in supporting your company and brand

-They may invest in doing bigger picture work that might otherwise land on your company’s shoulders, such as obtaining ministry approvals, or performing regional public relations work

Some disadvantages of giving exclusivity:
 
-You have to consider what recourse you have if expectations are not fulfilled
 
-You may come across exciting opportunities in the future that you can no longer pursue

-You may limit future profitability by losing the ability to work without the partner on the business opportunity
 
Giving exclusivity is not a step to take lightly, and has special considerations in the emerging markets context. We often advise our clients on these considerations.

 
just ended with 129% completion. Thank you for helping us empower women in emerging markets through leadership and entrepreneurship institutes!
Manage Troubled Relationships
A Mini Case Study With Tips
 
Several months ago, a Middle Eastern health and wellness distributor asked us to intervene with a North American supplier. Essentially, the supplier which owed them a large shipment of goods had been acquired by another North American supplier.
 
The acquiring supplier denied the distributor’s claim to the goods, stating that they had not acquired the liabilities of the acquired company. The situation was set to escalate in a very negative fashion.
 
Tip #1: Do not ‘evergreen’. Evergreening in this context means spending money to hide or ineffectually fix the problems of an already made troubled investment.
 
The distributor was extremely upset, wanting either the original paid-for shipment, or returned payment. They understood from our earlier counseling that, in their specific circumstances, the costs of cross-border legal proceedings would likely exceed any recovery. 
 
Tip #2: Point to the common benefit in moving forward. In rocky situations, it is often better to focus on future positive outcomes of turning around the situation, rather than taking an adversarial tone.
 
We contacted the supplier, and told him this was an incredible opportunity to work with a premier regional distributor. Instead of viewing this as an antagonistic situation, we suggested he seize the opportunity to establish sales distribution in the region without investing the vast resources that other suppliers have had to in order to obtain such opportunities.
 
Tip #3: Avoid taking a narrow transactional perspective in any relationship. The potential value creation is not limited to the transaction at hand, but is also in the ten or one hundred transactions that can follow.
 
We suggested that the supplier consider putting in place a distribution agreement with the distributor and not charge for the first shipment of goods as a gesture of goodwill. Thus, he could establish a very profitable Middle East distribution channel. Thinking beyond the contentious small shipment to the bigger picture could mean dollar signs for his company.
 
Tip #4: Bring in an external perspective. This can help identify outside-of-the-box solutions, and move things in a positive direction when two parties are no longer able to speak without increasing their acrimony.
 
Before the conversation, the supplier was ready for a battle, and afterwards, he was keen to build a profitable relationship. He even wanted to learn about working with SH International, moving this beyond a win-win situation to a triple win!
Share
Tweet
Share
Forward
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. Tell us more about you...
Copyright © 2015 SH International LLC, All rights reserved.


unsubscribe from this list    update subscription preferences 

Email Marketing Powered by Mailchimp