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Entering Emerging Markets: An LSP Perspective
Ilya Mishchenko EGO Translating Company 14 April, 2015
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Your Speaker Ilya Mishchenko
With EGO Translating since 2006, presently Managing Director in charge of translation & localisation, interpreting and document legalisation business segments. Chairman of St. Petersburg branch of Translators Union of Russia, at the same time serving on the Union board; proposed member of FIT Translation Technology Committee.
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EGO Translating Company
25 years on the market; 6th largest in Eastern Europe (CSA research); One of the leading Russian RLV’s; Scope of services: translation, interpreting, voice-over, localisation, legalisation of documents, DTP, pre-print, language & translation training; Over 200 in-house staff, over 2,000 freelancers; Headquarters in St. Petersburg, offices in Moscow and 12 cities in Russia.
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At Home Increasingly competitive translation and localisation market at home — Russia — harder to sell and gain sizeable profits: more mature clients; technology penetration; stringent RFP/RFQ procedures, government authorities procure mostly on price basis (80%); stronger competition in regional centres (smaller LSP’s with lower overhead); technological advancements penetrate lower segments of the market. We no longer have the edge as compared to smaller competitors.
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Why Try Elsewhere? Markets outside the standard “comfort zone” — WHY VENTURE THERE? Obvious reason: content explosion → localisation into more languages (increasingly globalised economy, faster time to market, etc.); Developing economies grow faster than anybody else; Events of still present opportunities for growth.
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Emerging Markets Growth
Source: International Monetary Fund, 2014
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Expertise And Scenarios
Our expertise: Russia is also an emerging economy with traits that are similar to those markets we are (were) trying to enter. Market entry scenarios: Selling from a “home base”; Buy an LSP / merge with a local LSP; Open a dedicated representative office.
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Entering Emerging Markets: Aspects
Entering a market is quite different for an RLV as compared to, for example, a manufacturing company. RLV is not a global brand and has harder time trying to get a solid footing in a foreign market. Standard marketing concepts do not apply. Aspects to consider: Intercultural communication, brand recognition; Pricing models and revenue drivers; Processes (sales and customer care, production, QA, etc.); Resources (staff, technologies, etc.).
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Scenario 1: Home Base We researched a possibility to hire locally, find BDM’s speaking the required language. Aspects: Intercultural: no expertise of the target market & business practices to produce an adequate marketing strategy; Pricing and revenue drivers: poor knowledge of the market, our pricing models does not work that well (“mystery shopper”); Processes: time difference, dedicated PM’s with extra hours, new procedures for rush orders; Resources: 1 BDM, technology already in place, dubious expenses for business trips and promotion abroad. Outcome: BDM now covering other international markets without specific regional focus.
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Scenario 2: M&A We researched a possibility of merging with or buying a smaller LSP in the target market. Aspects: Intercultural: manageability of staff, due diligence outsourced and not by a local provider; Pricing and revenue drivers: use adopted models, define several revenue drivers and concentrate on those; Processes: harmonisation of processes used in both companies; Resources: costly — due diligence, time spent on paperwork. Outcome: partner scheme, without M&A. Cross sales
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Scenario 3: You Own Office
We researched a possibility of opening a permanent representative office in the target market. Aspects: Intercultural: time needed to adapt marketing strategy locally; Pricing and revenue drivers: market research, concentrate on top revenue drivers that we can start selling instantly; Processes: processes in place; Resources: local staff, technology in place. Outcome: uncertain profitability, long-term perspective.
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Q&A
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