How Business Really Works: The Key to Expanding Globally with Bruno Mascart
Have you ever wanted to expand your business overseas? Wondering how you can even start? Find out on this AmCham podcast, where we hear from Bruno Mascart, the Managing Partner of Asia Pacific of Altios International.
A leading global advisory firm focused on international expansion and cross-border investments, Alitos International aids companies expand and invest globally. Throughout the podcast, Bruno mentions how Altios gets to understand each company’s strengths, weaknesses, goals, and interests, in order to best help its expansion to foreign markets.
Prior to working at Altios International, Bruno graduated in food processing and agribusiness and trained as an engineer in France. Through his studies and his travels, Bruno gained valuable experiences and expertise in international trade and business growth, eventually moving to Australia. Bruno credits his expertise in the agribusiness to key partnerships throughout his time in France and Australia.
Additionally, Bruno is part of a small group of individuals that make up special advisers to the French Foreign Board, nominated for his expertise in international trade and business development. Through his work as an adviser to the board, he hopes to strengthen the relationship between France and Australia.
In this podcast, Bruno breaks down the key to expanding globally for every business. While some businesses require smaller growth, and others much larger growth, Bruno explains how expanding globally is easier with the help of Altios International. However, Bruno also warns that not all expansions are equal – it is essential to fully comprehend the country in which you are expanding to for success.
Listen to the full podcast to gain one-of-a-kind information on expanding globally that you cannot get anywhere else. This knowledge can give you the key steps to taking your business from its locality to foreign markets worldwide.
Narrator: This podcast is proudly supported by eye level eye levels new innovative interactive video platform allows you to showcase your business knowledge to learn more and view AmCham’s interactive video visit eyelevelstudio.com.au/platform.
Duff Watkins: This is Duff Watkins the host of the AmCham business podcast you are about to listen to another exciting podcast or we talk to CEOs and politicians and people who are of interest in the world. But you know you can actually download these in your sleep. That’s right. You can subscribe to them through iTunes and a host of applications. So do your brain a favour make it easy on yourself. Subscribe to the AmCham business podcast. AmCham: bringing business to you.
Narrator: Welcome to the business podcast of the American Chamber of Commerce in Australia, where you find out how business really works. AmCham podcasts are hosted by Dr. Duff Watkins. Duff is the director of Execsearch International, an author, and is also on the AmCham counsel of Governors. AmCham: bringing business to you.
DW: Hello and welcome to the business podcast of the American Chamber of Commerce, How business really works. The world is your oyster. You’ve heard it. You’ve said it. But if you’re a business is it true?
Well today we discuss how to make the world your oyster if you’re in business. Today you’ll hear why having a good concept idea prior to service even a good business, it’s not enough. You’ll learn why the secret to expanding your business overseas is preparation and you will discover that each and every market is unique. It doesn’t have to stop you from entering those markets and making the world your oyster. My name is Duff Watkins, I’m your host on the AM channel business podcast and today our guest is Bruno Mascart from Altios International. Let me just explain the Altios International. You may not have heard of them but they’re in 15 countries where they operate across 80 countries and they provide assistance to companies wishing to expand their business overseas. And they’ve been doing this for 25 years. They’ve helped over 3500 companies implement and increase their sales revenues in those markets. Bruno is a friend of GM he’s is also a dual nationality of both France and Australia. So welcome to the show Bruno or should I say “bounjour.”
Bruno Mascart: Oh thank you, Duff, bonjour.
DW: My first question Bruno is I know you studied engineering in France. How did you get into this business of helping companies expand into foreign markets?
BM: Thank you, Duff. I mean this is a long process. I graduated in food processing and agribusiness as an engineer, trained in France. And I travelled around the world. I did a gap year. I wanted to discover the world and when I arrive in Australia I believed there were some good opportunities to bring some technology from Europe and help the Australian farmers and the Australian food industry to grow their business. And this is how we started this business, between France and Australia to bring agribusiness and agriexpertise. We recruited some cheese makers to go to King Island. We imported the cheese equipment; so that’s how the business started then and we still have a very strong background in the food and the agribusiness in our choice, especially with our worldwide partner, Agricorp. We call the farmabanks and it is a very strong partnership as well.
Duff Watkins: Let’s get to it. Let’s say I’m a business. I want to expand my business overseas. The first question is how do I decide which country to enter? It’s a big world out there as we know. So that’s my first question. Can you help me decide which country I should enter?
BM: Yes we will. But first of all we have to ask you a number of questions. We have to understand your business model. We have to understand your strength. You have to we have to understand your long term plan. We have to understand your financial capability and really, at the end of the day will be your consumers. If it’s to see if it’s true it should be and how savvy you are in internationalizing your company already. If you have already an expertise, if not then we need to crawl before walking.
So it’s very important to understand every step of your strategy and your strength. Priority gives you the right advice. I mean if you’re an Australian company, you haven’t exported anywhere, we say why don’t we look first at New Zealand. You know it’s quite easy. There is a free trade agreement between Australia and New Zealand. To understand your capability to adapt to in your country and then maybe stepping into Singapore and to Hong Kong then we can get back at that with the Australian expat community. They are very strong in these countries. And then later on, see with your services and your product, what would be the three to five years deployment plan.
DW: So you start with me, me as the customer I guess. What it is that I’m trying to achieve. OK. So then based on that we select a country and there will be some sort of cultural gap between, let’s say my country and the foreign market that I’m entering now. Let’s just say for example, China or it could be a country in Latin America. Then what?
BM: Then, we’ll come and we’ll we’re going to spend at least a full day with you to get a full scope of what you want to achieve in this country and work out the range of possibilities you will consider which could be either you find a partner locally and deal with this partner as you saw distributors or agent in that isolated country or you would consider having some sort of resources on the ground that we can select for you or eventually to set up your business because we will be able to prove to you that the business is worth investing into this country.
DW: Do you do any research into trade agreements? Either existing trade agreements or new upcoming trade agreements? BM: Oh, that is very important and this is just prior to sending your project to our partners or our subsidiaries in these countries. Obviously there is regulatory issues that we will need to overcome. But all of that would be prior to working with you in this country. We will, through our local office at no cost obviously, validate that there is no barrier trade barrier or regulation barrier for you to work in this country. Otherwise there isn’t a business and there is no way to take you over there and work for you for a number of weeks or a number of months and at the end of the day said that you cannot trade with these countries. So that’s quite important.
DW: Will you help me define the market in this new country?
BM: We will, we always say we don’t have a magic wand but we’ve got a magic process. Our magic process is to put our sleeves up and go to the market, talk to the end users to the end consumers to be able to back track the distribution channels that we would recommend you to use and the best distribution channel based on your value proposal, on your prices, and your capability to handle these distribution channels.
We would as well, I know Walmart uses this extensively in expanding their business to what it is today, we will benchmark your competitors, and I think it’s very important to see how your competitors if any, but usually we always have competitors, are behaving in this market and maybe tried to be a bit smarter than your competitors from day one because you’ve got a white page. So you’re entering into this market, we will look at the distributions we look at your competitors and then come back with a solution. This solution will be proposed to you. You will be the end decision maker because we always say we your legs, you you’d be the brain. And that’s very important to our concept where we provide you the tool box. We know how to get you there. But any other day you would have to make the call through a business trip.
DW: Already I can see that you focus on fit very much. Just because I want to expand overseas there’s no guarantee of success. So it sounds like you have a process to make sure to optimize my chances of overseas expansion.
BM: We do. And then by doing that you would have enough to self-service as well. If plan A does not work then our team will be able to keep working for you and adapt the plan B or the plan C, if for whatever reason the distribution channel you’ve chosen after six months might not have delivered your expectation was to be able to backtrack and shape your distribution in this country. I mean we’ve been established in the US since 1998 we’ve been in China since 1989. So most of our offices have been established for 15, 20 years. We’ve got a very strong team on the run with the local knowledge and expertise.
DW: So I’ve decided to expand overseas. I’ve worked with you. We’ve selected a country and let’s make it a big country. China or US or Brazil, something that’s big and difficult. And because it’s big and difficult, where do I start? I understand you have a diagnostic process.
BM: Yes. And that’s somewhat where you mentioned earlier. Where we ready to work with you in scoping your wish list and working with our local team to value that that you can deliver what are you expecting. Well we’ll obviously if it’s a consumer product concentrate if it’s in China in the three main cities, in Onjong, in Shanghai and Beijing. If it’s a B2B services it might be in the second tier country that you may have more potential that are still investing heavily in infrastructure or in any other product as well. So, there is no set rule.
I mean if you want to go and set up a plant in China we will need to decide if you want to be closer to the supply for your plant, or closer to the market. I mean in some example we work for a cordial companies out of Europe and we decided to go in the south, close to the sugar cane, more then to the market which was Shanghai and Beijing. So it’s very, there is no magic solution. Once again it’s really a matter of assessing where would be best presented.
DW: So it sounds like the diagnostic process is to validate my preconceptions or misconceptions about this new foreign market.
BM: Indeed and our strength as well is as we’ve been acting in China for almost 20 years. We would in one shape or form have worked for a similar industry in the past so we can fast track this process with our network, and once we in China is very important you know. It’s very hard to get a database in China, it’s very hard to get an e-mail in China. I mean after their numbers, you know. So it’s not a Duff, you know of your company. This is very tricky. And that’s what we’re good at it. And we’ve got a very strong team in China.
DW: So I’ve selected my country. I’ve gone through the diagnostic process you validated my conceptions and I now I think I have a pretty good idea of what I’m getting into. So can you walk me through it? What are the key steps that are going to happen, and in what sequence?
BM: The first thing, based on their formula you would you would request would be for you to go to this country. It’s essential to go and validate what our feelings have been, by meeting some distributors pride or to visit meeting some professional people, meeting some clients, for you to validate what we’ve seen as a business opportunity. And then to meet maybe other service providers such as a lawyer, such as an accountant, that will help you and guide you in getting it right from the start. And not only trying to do some business matching and business opportunities you really need to put the work into it and the planning into it is essential.
DW: And we’ll take a brief pause here for a commercial.
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DW: I’m listening to you intensely Bruno. The trouble is my feet have now gotten cold. You’re freaking me out. This sounds way, way too hard, way too complex for my little business. I’m just making this up. But are there other ways of entering a new market that are perhaps less formal and less complex?
BM: Oh there is. There is. But then don’t go to China. I mean starting in Hong Kong first, and then Hong Kong is a stepping stone into China. And I hear you. And it’s where you know is where we can talk and discuss this because if you go to Hong Kong you will have far less trade barrier. I mean look at the success of health companies and cosmetic companies. They’re entering Hong Kong and then they can get access to China through the red channels.
So it’s another approach, it’s another strategy as well that we can customize for you according to our discussions and our exchange. And yes, you know in that case just benchmark Hong Kong. It will cost you far less money, not just to you know our fees but in approaching this market. And then you get a feeling of that then when you’re be ready to step into China 6 to 12 months later.
But what you need as well is just to realize that every country has a trade organization that will be able to support you as well, in terms of financing this, in terms of giving you some feedback. Here in Australia, we are with the American Chamber of Commerce, they will be able to help us train companies to understand America better. So it’s not just about our choice it’s about trying to get as much expertise around your project and know that you’re on your project, which was valuable in your country and your trade organizations and government may be able to finance part of this some work through grant, through working capitals. There is a lot of support we will bring into the discussion as to the assessment which not just torturous.
DW: And that’s the name of the game, because if I expand overseas to this big new complex market I don’t want to fail, it’s a big investment it’s very expensive. So I want to expand into this new market. I want to establish a durable business. I want my business to be sustainable. And are there secrets or keys to doing that?
BM: First of all you and I have the same DNA. We are entrepreneurs. We’ve got our jobs. We’ve got 190 staff spread all around the world. We grew by 15 to 20 percent every year. So we have exactly the same target as you have. I mean this year we opening two in your offices, one in Spain, thanks to a strong partnership with them a local bank, and one in Dubai, to catch the Middle East growth and especially Iran. So we’re doing what we’re trying to advise you to do as well. So we’ve got the same DNA and the same targets. So we fully understand your issues and your concern. And that’s how we will be able to give you the best approach in selecting the short term market, the medium term market, the long term market as an example.
I mean if you target India, where we’re seen in India, if you don’t have any patience you will to get some. And if you do have some, you will learn how to lose it. And it’s very true that eventually you cannot bypass India in your international strategy. And indeed our business in India is doing extremely well because I mean we have got very good people over there. We’re even trying to consider offshoring all our counting or part of our counting across all our offices around the world into our Indian office. So there is ways as well to optimize the use of every opportunity in every country. It’s a matter of sequences.
DW: You mentioned examples, that reminds me can you can name names if you if you’re able to. Can you give me an example of an outstanding success that you’ve had with any company anywhere?
BM: Yeah. I mean one of my very old clients is providing temporary facilities for big events. I went to approach them in 1997. They were in Europe saying why don’t you come and bid for the Olympic Games in Sydney. And at the time the company was doing about 100 million Euros and 5 million Euros on the international market. And they thought I was joking. And at the end of the day they won a 25 million dollar contract for the Olympic Games and were the official provider of all the temporary facilities. Since then we just signed a major contract with the Commonwealth Games on the Gold Coast recently, that would be delivered over the next 12 months. And these clients, I took them to Salt Lake City for the Winter Games that took them to Japan and Korea for the World Cup of soccer, I took them to Athens for the Olympic Games, so their company today is doing about a billion euros within 20 years, they grew by 10 times, and 60 percent of that is on the international market.
DW: So they leverage off their expansion into a foreign market, first of all by doing it right, and then when you’ve learned to do it right, you learn to do it right again presumably.
BM: Very much so. Then there is the other example of Brisbane-based company. They’ve got a very successful franchise here. They wanted us to take them to the US and they thought, let’s go to Texas because Texas is very similar to Australia. It’s not that cold.
DW: That’s funny.
BM: Their business is waterproofing. You know you want to have issue about freeze and about cold weather. So we do them to Texas and we realize that the service is up in the local market were always more low-end of the market and very competitive. So they were a bit disappointed by this assessment but on the other hand we identified a very interesting complementary franchise from the US that they’re now growing into Australia, so an opportunity can be transformed into something different to what you are aiming for in an issue.
DW: Well we were joking off air about, I’ve seen it firsthand in Brazil, in Australia, in the U.S., in China. Companies will enter a foreign market and they’re ignorant. They don’t have knowledge and that’s understandable, but sometimes they’re just plain naive. I’m wondering what are the common mistakes that you’ve seen companies make? And I’m sure you’ve seen many more than I have. What are the common mistakes companies make that our listeners can avoid if they expand overseas?
BM: The biggest mistake is not to listen. And really assuming that wherever they go it’s like it is in their own country. I mean a typical example is people coming to Australia from the US or from England, they will think look at this be the same language. We’re very similar but we’re not you know there’s a lot of difference between US, UK and Australia. I mean UK is very competitive and very low margin type of business because they’ve got a different scale. In Australia, they want to build a relationship, a long term relationship, and low margin is not as important as it would be in the UK. They want to have a trustful relationship and not to swap from one supplier to the other because it’s quite difficult for them to find new suppliers, they’re quite isolated, and there is not that big offer in the local market. And that’s just between you know three developed countries.
So when you go to China, I mean we always talk about the three cups of tea you know you need first to meet the people then be friends with the people and then the third cup of tea is you would be able to talk business. But if you want to start a business on the first cup of tea you won’t be able to do any business whatsoever in China. But then you go to America then you know you don’t need to have a cup of tea, you don’t need to have a beer. It’s straight into, down to business. And that’s where we come from. And every country would be totally different.
DW: I always say the same thing in a different way. They speak English in Australia, the U.S., the U.K., New Zealand, Singapore, India. But let me tell you, they all see the world very, very differently even though they may speak the same language.
BM: And you hear, and sorry for the U.S. market, but more horror stories into the US where you’ve been burnt, than you do in China with all of our clients. And that’s very surprising. A number of our clients went to manufacture under licence in the US and within two to three years their US partners decided to go directly to the market. And they had to fight them back, work on the patent rights. And it’s very expensive when you go down to the legal path in the US, where in China. I mean you will find a manufacturer. All they want to do is to manufacture and make money out of manufacturing. They will try to bypass you and distribute and sell your product. So that’s what we know. And we can share with our clients where what seems to be obvious to them may not be obvious.
DW: And I can confirm that I’ve talked with an Australian lawyer who represented one of the largest Chinese companies and he said he’d had far more Chinese company gouged and fleeced in Australia. Then he’d had Australian companies gouged and fleeced in China. And I was astonished Bruno, only because I had never even contemplated that. But of course I don’t know how accurate he was speaking but you’re saying the same thing. It isn’t a one way street. It’s when you enter a foreign market, it’s a foreign market and you need to do your due diligence and road test some of your assumptions.
BM: Another important point as well from what we’ve been discussing since the beginning of this podcast is if you don’t feel it it’s always important to stick to your first impression especially if it’s a bad one. So if you don’t really feel that the market is ready or suited for you because of marketing issues, because of cost issue, because of technical issues just stop, regroup, and come back six months, 12 months to three years later. Don’t keep trying to invest if you don’t see the end result.
DW: Take the time to get it right.
BM: Very important. I mean the world is so big there is opportunities everywhere. You just need to optimize where you want to go into a timeframe.
DW: There are many open doors.
BM: Very much so.
DW: Off air, we were discussing something that’s important, so I want to give you a chance to brag about your home country. I know that you are appointed a special adviser to the French Foreign Board and can you describe to our listeners? Because I thought that was just a very interesting concept which as far as we know only France has it.
BM: That’s true.
DW: And you’re one of the elite that has been appointed to this. BM: That’s right. I mean there’s only 4000 of us around the world. We are nominated by the French Prime Ministers through the advice of the local ambassadors and the Trade Council for our expertise in specific market. I mean in Australia alone there is 34 of us and we meet every five or six weeks there is people in the construction industry, into the banking industry, into the tourism industry, into the consumer industry, and we basically share with the French Trade Council and often the ambassador as well, our local markets and where we believe that the relationship between France and Australia can improve and can be supported. We organised some conference, we organised some coaching, we organised some get together with new companies coming to Australia. An Australian company wanted to go to France to improve the trade on an official way.
DW: So France has had the commercial and trade expertise of its citizens abroad and uses it as a resource.
BM: That’s right. And we meet once a year. Two years ago I was in Miami, last year I was in Deauville and this would be in Bali with experts from all over the world, part of this network.
DW: To that all I can say Bruno is Viva la France.
DW: Bruno, what’s the final takeaway point you would like to leave with our listeners?
BM: You’re not on your own, and use the expert advice that’s in and even if it’s not at all to us but use the expert advice go and talk to your local chamber of commerce if you’re targeting a specific country. Go and see the local Trade Commission there and go and look with the Chamber of Commerce that could be locally. Talk to your accountant, talk to your lawyers, on tax issues on legal issues. Get ready. And I would say three words. Plan, plan, and plan. That’s the most important to me.
DW: And we’ll finish it on that note. You’ve been listening to the AmCham business podcast. We wanted to know about how to expand the foreign market so we called Bruno Mascart at Altios International. So should you. We value your opinion if you’re listening to us through iTunes, you can easily hit the subscribe button, leave a review, make a comment all of which are very appreciated. We want to know what you want to know what the topics the people the issues that are of interest to you. Just email us, email@example.com. Did you know that you could find all that podcast on the website amcham.com.au. Thank you for listening.
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