TRANSPLANTING BUSINESSES

There is this article written by Greg Macabenta that came out at today’s issue of the BusinessWorld (April 22, 2009, page 4/S1, “On transplanting a Business”). The article is about “transplanting” a successful “homegrown” (which in this case, the Philippines) business model to a foreign country, which in this article refers to the United States. Specifically, the authors warned about the mistaken notion that a proven business model could be replicated in another country and still be successful. This is because “foreign” consumers have a markedly different needs, wants, and taste compared to the “local” consumers, i.e., consumers from the home country that the business originated. As such, the author opined that most business going international usually took two routes. The first route is to play on the niche of a “natural consumer” group, specifically the immigrant group from same country as the business. The other route is to go mainstream, i.e., to sell to the general consumers of the host country not just to a specific group. Most “transplanted” businesses taking the first route would eventually take the second route in order to expand and break free from a limited market segment. Quite an interesting article actually since the author utilizes his own experience to write the article. I remember during my business school years when I’m taking up Global Marketing. The one and only commandment of Global Marketing is adaptation, i.e., a business’ product, brand, and marketing strategies must “adapt” to the local conditions of the host country. The notion that “one size fits all” is quite “blasphemous” (for wanting a better term) in Global Marketing because different people has different needs, wants and taste both individually and collectively as a national/racial/religious entity. However, there are some “high profile exceptions” to this “core truth” of Global Marketing as some brands seemed to defy this core logic. One such case is the Tokyo Disneyland theme park and to a lesser extent the Hong Kong Disneyland theme park. Disneyland is unabashly an American theme park and yet, it not only thrives in a thoroughly un – American environment. It is rather successful. Paradoxically, one other “foreign” Disneyland theme park is a colossal failure, that of Euro Disneyland in Paris, France and French culture is part of the greater Western culture of which the American culture also belong. Another exceptional case that defies the adaptation logic in Global Marketing is Coke. A Coke is a Coke and is still a Coke wherever you are around the globe, be it in China, in Europe, in the Philippines or in the US. McDonald’s would also fit the bill but it has since allowed “local” menu content (a form of adaptation) in countries like the Philippines where it is lagging in market share. Quite contradicting, indeed. On one hand, logic portends that adaptation must occur in order for a product or a business transplanted into a foreign soil to succeed while certain cases dramatically prove that it isn’t the case. And this is where messr Macabenta’s insightful article proved useful. While products and its marketing might not need to adapt in foreign lands, business strategies and certain aspects of the business operations do have to adapt. For one, a company’s business model or competitive edge may not be useful in a foreign land (and this is the limitation of Global Marketing since it only concerns marketing). For example, a company’s competitive edge in the local market may hinge on it’s taste, which in turn hinge on logistical support to ensure freshness as well as on adept sourcing capabilities and it’s knowledge of the local consumer’s taste. Granting that the taste is acceptable to the foreign consumers on the host countries, yet the logistical challenge to ensure product freshness as well as the sourcing of some ingredients which is not available in the host country might severely cripple the company’s ability to replicate it’s competitive edge in the host country and hence, necessitate changes in it’s business operations in order to sustain it’s “perceived” competitive strength (which the host country’s consumers may not appreciate at all especially if it involved added cost and therefore translate into higher prices) or all together create a new competitive strength based on “new realities”. Another example would be, if the company is hugely successful in it’s local market simply because it’s business model dictates that it had to deliver it’s products or services as fast as possible but in a foreign country, speed of delivery may not be the “deal clincher” especially if the mainstream competitors are delivering as fast as the company or that the consumers of the host country doesn’t particularly value speed of delivery and instead opt for something else like quality for instance, which thus turned the wildly successful business model simply a “local” phenomenon. Taking this as a cue, it would be safe to declare that there is no international company that haven’t “adapted” to the local conditions and still be successful. Coke for instance has a markedly different and yet successful distribution strategy in the Philippines compared to other countries like the US or in Hong Kong, or China but even so, Coke is still Coke nonetheless. In short, what messr Macabenta advocates about businesses going global is that it has to adapt to the local condition that it is “transplanting”. Moreover, I think this adaptation theory is not only applicable to businesses that is going global but may as well apply to businesses being put up in a foreign soil by immigrants using the business model develop from “home” (the country of origin). A case in point here is the delicacy shops in Chinatown (in Manila). Most of the delicacy stores in Chinatown are set – up immigrants and are highly focused on a very particular market segment, mainly fellow immigrants. These Chinese delis sell food stuffs from mushrooms (I knew of 3 or 4 kinds of “Chinese” mushrooms), Wooden Ear (木耳), Hopia, Tikoy, Scallops, Chinese candies (like White Rabbit), to the more “exotic” stuffs like Stuffed Pork Intestine Sausage and the likes. And just like what messr Macabenta observes, the market focus strategy on immigrants though hugely successful in the early stages of the business would eventually reach it’s limits in terms of number of clients. Furthermore, the clientele base, as observe by messr Macabenta would sooner or later diminish as second or even third generation immigrants whose taste are more in tune with the locals shun their products. As this develops, most of these “specialty” stores are forced to go “mainstream”, i.e., cater to the locals other than the particular immigrant groups. However, going mainstream has it’s difficulties and challenges. For example, in the Philippine Chinese deli’s case, selling mushrooms, wooden ear, and scallop to the Filipinos would be futile since Filipino cuisine don’t actually use those stuffs. Some of the more exotic delicacies like intestine sausage don’t exactly appeal to the Filipino palate at all. However, the Philippine Chinese deli’s are pretty much successful in going mainstream precisely because it was able to adapt to the locals. Tikoy for example has become popular because it has adapted (by coming up with small personal sizes) to the Filipino’s gift giving tradition during major holidays (which in this case is the Chinese New Year). Now, it becomes an SOP to give and receive Tikoys during the Chinese New Years whereas in China and elsewhere where Chinese are the majority, such practice of giving Tikoy is less seen. Hopia, as a Chinese delicacy has evolved into a Filipino delicacy simply by adapting its flavor to the Filipino taste. Instead of the original mungo only variant, it now has ube….. Changes can also be seen from the way businesses are conducted by the Chinese delis. They no longer boxed themselves in Chinatown. A few of them actually branched out ostensibly to cater to the growing demand of the mainstream markets. As a conclusion, for any businesses “transplanted” from the home country and into a foreign country, adaptation is a must, be it in the product offering or in the strategies used or in the business models being utilized. Relying on a proven successful formula made in the home market doesn’t guarantee survival in the new foreign market much less success.

SUNRISE/SUNSET

I’m not exactly a “beach” person though I am not necessarily averse to it either. My ambivalence towards the beach has more to do with the fact that I can’t swim. As such, the most I could do when I’m at the beach is to “soak” myself in the water, which is not exactly the most enjoyable of all the activities vis – a – vis to the boisterous partying in the water surrounding me. However, the good news is that there is more to the beach than just simply swimming. In most cases, the location of the beach has some of the most beautiful natural sceneries that one can feast his/her eyes on and I happened to be an avid nature lover especially of the sunrise and sunsets over the sea. Such is the case during my recent vacation trip to Virgin Resort at Laiya, San Juan, Batangas. Virgin Resort, one of the several resorts that dot the area, is situated right in the middle of “Laiya Cove” located at the eastern most coast line of Batangas that opens to the South China Sea. Anyway, during on my first day at the said beach, I was as usual “engrossed’ at my favorite “activity” at the beach, i.e., soaking. Probably it is the clear blue sky, or the crystal clear waters, or the strong splashing waves, or maybe it was all of it that enticed me to get out of the waters and lie down on my back on the shores and stare straight at the sky above while the cool water splashes and washes over me. It is then that I noticed that how beautiful was the sky that afternoon at the beach. Not much cloud, no skyscraper or tower to clutter the view, not much glare from the sun either. All one can see is wide, expansive, blue just plain, bright, cheerful blue. Funny, how can somebody like me could miss something so plain, so simple, so obvious, yet so beautiful. I ended up staring at the clear blue skies for an hour or so. As I was staring, it came to me that behind that beautiful, “unpierceable” blue “curtain” is the eternal darkness of empty space. Although, it is an obvious fact but still staring at the sky, I find it hard to fathom that there is actually “something” beyond the skies. I remembered in my reading of Mongol history that Genghis Khan before his campaigns would remove his belt and slung it over his shoulder and climb up the mountains alone to pay his respect to Tangri or Tengri, the Eternal Blue Heavens. He would spend a day and a night at that. What does he sees when he stares at the Tengri? Does he wonder as well? Although between Genghis Khan and me, we’re 800 years apart and he was in Mongolia and I’m in Laiya but still wasn’t it fascinating to wonder, to stare? That evening, around dinner time (7pm maybe), as I was waiting in the open bungalow for my dinner to be served, I noticed something over the horizon. A huge yellow ball, the size of a peso coin if you are able to reach it with your hand and get it, came out from under the sea and hung over the dark skies. The moon in it’s fullness shone so brightly that it dimmed the twinkling stars around it, smothering them in it’s brightness. It was like a giant lamp or more like a humongous flashlight that illuminates only a slice of the sea, leaving the rest in total darkness. The sea under the moonlight looked so calm and tranquil that it actually betrays the actual rippled turbulence. The whole scenery is like something that plucked out from a painting or any drawing of the moonlit sky over a body of water. It looked so “artsy” except that it is real and is directly in front of me that night. I can’t help but be reminded of Beethoven’s Moonlight Sonata (one of my favorite actually). Ludwig van Beethoven wrote Moonlight Sonata sometime in 1801 (over 200 years remove from my time). Moonlight Sonata, is a piano solo whose music is soft, literally quiet, and serene. The first time I strain my ears to hear the music, I felt I was strolling beside a lake and staring at the moon and enamored by the beauty of the moment must like I was then that evening except that there is no music in my ears (and I forgot to bring the radio or the CD containing the said piece neither was the song in my sister’s ipod) and I wasn’t strolling beside the shore. It made me wonder however. What Beethoven sees in such a beautiful moonlit night to inspire him to write such an immortal piece that captures the moment? Am I seeing what he is seeing? Or more accurately, was I seeing what Beethoven wanted me to see as depicted in my piano sonata? The following morning, for unknown reason (probably felt refreshed and invigorated by the events the day before), I woke up early, around 530. And as I opened the door of the cottage that we’re staying for the night, I discovered that it was already morning and everything is quite “illuminated” but the sun hasn’t fully come out yet. I thought that this is probably my lucky day and that I get to see the sunrise that morning. And so I set out to the shore, bringing along a chair and planted it near the water out in the open beach where I could clearly see the sun slowly rising up from the east behind the mountains. And turning my head to my right, I saw the moon now pale white setting over the mountains running away, fleeing maybe from the chasing sun. “The moon and sun shall never meet, one would eternally chase after the other but they will never meet” as the some forgotten old poem would say (or something to that effect). But of course, the sun and the moon do meet….. during eclipses. Between the chasing sun and the fleeing moon on that beautiful morning lies the “serene” sea in the middle. It’s rhythmic waves gently crashing onto the shores while further away, the crystal green waters reveals the bed on which that water rests. On it’s surface, schools of dancing fish, jumping out of the waters cheering, beckoning the sun to come out and play with them. What a sight to behold! Too bad, I could only see what’s in front of me and because of that, I had to constantly turn my head, paying only intermittent attention to the sun, to the moon, to the dancing fishes, to the serene sea. I wish I could “see” the whole thing in just a glance but I can’t. As the sun slowly rises, it resembles a lot like the New Year Ball at Time Square in New York but instead of descending from its pole, the sun is rising up from its invisible pole. Its brightness seemed quite subdued until it reaches it’s “peak” (of the imaginary pole, figuratively speaking). Right then, the sun blasts its full brightness in all direction, covering everything with a golden glow and blinding anyone who dares attempt as to even peek at its silhouette. Even as I was “blinded” by brightness, I felt a sense of renewal, a sense of energy, a sense of hope, a sense of life. I could only imagine that millennia ago when the first man came out its cave, he must have felt the same thing as I am feeling that morning, a sense of new beginning after a night of total darkness. It is probably due this feeling that our ancestors worship the sun, the light, the day and imbibe the sunrise with the meaning of renewal. It is only then that I came to realize a fundamental truth, which is “we are the reason”. We are the reason that what we came to know to be beautiful is beautiful. The sun, the moon, the sea, and even the fish don’t know what beauty is. Heck, they don’t even care that they are part of a choreograph performance that defines beauty. We define beauty. We are the reason that beauty exists, that the sun, the moon, the sea, the world and everything around us exist. In fact, we are the reason that reason exists, that meaning has their meaning. We are the reason. And it also us, that “ruin” beauty, that erase beauty when we no longer enjoy them, when we “busied” ourselves with whatever we’re doing, when we no longer get up to see the sunrise and instead opt to sleep through the day, when we no longer stayed up to gazed at the fullness beauty of the moon and instead glued ourselves to the nightlife. We are the reason.