Business Positioning

I attended the Press Launch of the 5th Singapore Promising Brand Award this morning. I got this emailer from ASME some time back and decided to attend and find out more.

The reception was grand, with quite a large reception desk and lots of people were at the hallway networking with one another. The brochure given out is very very well done. Lots of artwork, design and good printing. Inside, all the VIPs were naturally flocking around one another and probably exchanging cordial words. This is totally unlike the unconference I had experienced just a few days ago. I felt that the establishment can and should learn some things from us too.

Today, I want to talk about brand or business positioning, something which reminded me of some thoughts I had during my entrepreneurial journey.

There are two schools of thought. One - Start small then grow big. Two - Be big first then capture the smaller ones.

Today's event seems to be talking about or promoting the grow up model. The brands mentioned are all locally well known brands - Ya Kun, Haach, Travel Pac, Old Chang Kee, 77th Street and Goodrich. They are all past award winners. A few of them has gone regional while some has not.

I was thinking why not? Is it because their financials do not allow them to do so? Or because they have difficulty getting good business partners or find good talent to run their business overseas? Or is it because their business model or the industry they are in restricts their ability to expand out of Singapore's shore?

I would think that it's the last one. Some of them work on the model of franchising and others direct control of their outlets. And I noticed that most of the companies are in the retail industry. But franchising as a business model definitely works, especially for the retail market.

In this case, instead of the products that these companies are selling that works against their expansion, I feel that it's the market or the consumer they are serving that controls their fate.

Why so? We all know that culture, education and economic background have a large impact on the consumption habits of people. What works in Singapore might not work even in Malaysia, although it is the country which we have most in common. Not to mention people in Korea or Japan. For example, most people like a good 'ol toasted bread and teh si, but why would someone in Malaysia pay a premium for the same thing which they can get from a coffeeshop down the road? Some would say the nicer surroundings with air-conditioning helps, but can't anyone else do the same with another shop?

But you might say that no, how do I know whether the Japanese or Koreans like toasted bread with Kaya and teh si or not? I don't. But the companies can pay someone to do market surveys there. Perhaps they do. If so, then franchises there would mushroom away. A good example is Sakae Sushi, our home grown conveyor belt sushi restaurant. The last I read about them is that they are now in Russia and their business is roaring!

The more risk-taking amongst you might also challenge with "How do you know whether the taste of Koreans and Japanese would not change even if a preliminary market survey says that they hate toasted bread with kaya and teh si?" They just might. I remember learning about a story (unverified) of a great missed opportunity for Ms Jennie Chua, President and Chief Executive Officer of Raffles Holdings Limited. It was in the 1970s that Ms Chua was presented with a business opportunity to start a franchise selling burgers in Singapore. Her analysis at that time was, Asians eat rice not bread. Today, McDonald's is the cash cow king of all franchises in the world. Was there a hint of regret? If I were she, yes I would be.

My take on this first issue is this. Instead of bringing your products and services that are made to suit the local market overseas, why not change your products and services to suit the tastes of the overseas consumers? And even changing your products and services entirely, eg. changing the menu or changing the entire fashion collection (for 77th Street), does not really matter. I learned one great wisdom long ago. "Provide people what they want and the riches will come." What you are still retaining is your brand. Your brand of providing great products (food or clothes) and services, eg. great burgers even though the bread is now made of rice (as in McDonald's Fantastic burger or curry which is not spicy at all for the Japanese), or great cosplay fashion (short for costume play where the youth dresses up as their anime characters, which is so hot now in Japan) instead of street fashion. Burgers and fashion nonetheless.

Next, the second school of thought. Be big then lap up the competition. This is the big bold strategy that big America likes and what some VCs in the US are looking for. They want startups that can change the world. They are looking for the massive returns they can get in a relative short period of time. Of course they are taking the risk as well. It's an attitude and it's fine.

But I've also seen some local companies doing just that. The best example would be our big 'ol Creative Technologies. But there's also one recent company that follow that belief - muvee Technologies. I had an opportunity to speak to Terence Swee, founder and Chief Opportunities Officer, last year at Bluesky. What he said to me was invaluable. He said, that instead of growing the market from Singapore, he knew that for his company to make it big is to conquer the big markets first. He started getting his first big customer in the US and then Japan and Europe. The key he said, is to have your first break, ie. your products being accepted by one of the big boys and then the rest is easy. If you can conquer the market that will generate most of your revenue, the road henceforth is downhill and easier.

Now this is something. This is against conventional advice. This is not entirely new because Creative did it 20 years ago. It's just now brought up again into the spotlight. And I like it.

For those of you who's got startup funding already (the next stage after your seed round), this is the strategy I'd suggest you take, especially the tech companies. Moreover as a tech company, what you're offering should be one that can scale. I'm not sure about you, but I'd like to come up with a tech solution that would change the world, wouldn't you?

In the end, it's a matter of what problem do you want to solve, in this world or in a certain country or a certain market size. Be very clear in what you want to do, because this is the most difficult part. And once you're decided and crystal clear in your thoughts, position your business and the rest will follow.

I've made some assumptions here, with and without research, from my past experiences and from people I've met these few years. I might have missed some facts in this article (please let me know), but what I'm doing here is to highlight some business practices that you can take away as useful and as yours. Let me hear what you say.