Teleos Inc. Blog Site

An article by yours truly on the topic of how North American retailers and their Asian vendors impact markets can be read at Asia Times Online.

Asian companies are now beginning to experience an alteration in how their retail customers view partnering with them. Early in their relationship, the idea of partnering was very much a shared goal. But as the vendor grew, the retailer began to recognize that its interests were best served if the vendor was kept at arm’s length from the US consumer. Many Asian companies have seen their retail customers develop alternative Asian vendors in the same fashion as they were once originally courted. This strategic move on the part of the retailer affords him the opportunity to play his vendors off against one another. Allowed to go unchecked, this dynamic leads to a deflationary spiral as manufacturers undercut one another’s prices in an attempt to increase market share and use the full capacity of their factories.

The writers at China Herald do not believe so.

Has rarely been as succinctly and well-stated as Drew Maloney did in his article, “Lessons in Navigating US Economic Rapids”.  The essence of the Teleos business model is reflected in his article:

As foreign firms attempt to make inroads into the US market, there are four steps that firms can take to lessen the impact of the current economic environment.

Demonstrate that you are a global company, not a foreign one. Be able to point out the amount of US jobs created, sales made and taxes paid. As an example, the fact that Lenovo employs several hundred people in the United States and assembles its products in North Carolina and Mexico makes it a truly global company with an important US connection. It is these types of stories that companies need to tell when entering the US market.

Manage your political risks. Obtain the most up-to-date information on the political landscape in Washington. Develop a proactive strategy to leverage your US presence by building ties with key decision-makers. The recipe for success is to establish a presence and strategy before a crisis, rather than reacting to one.

Build your brand and reputation in the United States. Proactive corporate social responsibility and philanthropic projects help generate goodwill (and sales) and help show you are a responsible global company.

Be committed for the long term. Relationship building and communications cannot be a one-off project. It needs to be an ongoing part of your business plan in the United States.

Many of the problems that foreign firms face in the United States are out of their control. But rather than viewing the current situation as an obstacle to investment, it should be viewed as an opportunity to take the necessary steps to build the firm’s brand at both national and local levels. By taking a few basic steps now, foreign firms will be in much better shape the next time these problems re-emerge.

And GE stands ready to deliver – the world’s leading retailer and one of the world’s leading small appliance manufacturers are partnering together to develop a line of brushed steel appliances unique to Wal-Mart.  This is an interesting dimension to the Haier story and suggests that Wal-Mart’s desire for innovation is real and not being satisified by the cost leaders.

It would appear so … not to let Americans believe they have a unique position as global debtors, the Taiwanese are confronting a similar problem:

 Consumers are almost certainly not spending because they are unable to. Credit-card debt has reached epidemic proportions in Taiwan, prompting the government to institute a national rescheduling scheme to pull the estimated half a million problem debtors – known locally as kanu or “card slaves” – out of the red. Their overdue card debt is worth about US$10,000 per person.