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Entering Emerging Markets: An LSP Perspective

Entering Emerging Markets: An LSP Perspective. Ilya Mishchenko EGO Translating Company 14 April, 2015. Your Speaker. Ilya Mishchenko With EGO Translating since 2006, presently Managing Director in charge of translation & localisation, interpreting and document legalisation business segments .

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Entering Emerging Markets: An LSP Perspective

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  1. Entering Emerging Markets:An LSP Perspective Ilya MishchenkoEGO Translating Company14 April, 2015

  2. 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.

  3. 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.

  4. 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.

  5. 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 2014-2015 still present opportunities for growth.

  6. Emerging Markets Growth • Source: International Monetary Fund, 2014

  7. 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.

  8. 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.).

  9. 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.

  10. 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.

  11. 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.

  12. Q&A • ilya.mishchenko@egotranslating.ru • Twitter: @iljich

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