Group shot of Ceriatone’s staff
By Alvin Ung
Malaysia has big companies with big brands that have gone global. Travellers and tourists beyond Asia know of AirAsia and MAS. They may even know of Petronas, Sime Darby and Selangor Pewter.
We also have big companies with lesser known brands that have gone global. I met a few of the CEOs at Monte Carlo in July. I was there as a leadership coach during EY’s Entrepreneur of the Year Global awards.
I sat in a helicopter with Dato’ Hazimah Zainuddin of Hyrax Oil. I had breakfast with Dato’ Seri Stanley Thai of SuperMax, as well as his wife Datin Seri Cheryl Wong. We enjoyed dinner with Tan Sri A.K. Nathan of Eversendai. And together we toasted Dr. Chia Song Kun of QL Resources and his wife, Mrs. Chia, as Malaysia’s Entrepreneur of the Year 2012. The latter couple were extraordinarily kind. They helped me to find my wife and son when we got separated in a Charles de Gaulle airport in Paris (long story).
So my time in Monte Carlo helped me to see that these CEOs were amazing individuals, incredibly hardworking, and who are global citizens. At any given point, they are flying from one country to another: United States, Brazil, South Africa, Ireland. Their products — motor oil, gloves, skyscrapers, fish balls — may not be household names. But these products can be found in huge quantities in six continents.
Given the names I’ve listed above, we might assume that to go global, we have to become a big brand or a big company. But is it possible to be a small guy with an unknown brand to make it big on a global playing field? Of course.
Idris Jala and Nik posing with Idris new amp from Ceriatone
The story of Shazwan Nik Azam shows us that you be a mom-and-pop company operating out of a first-storey shoplot with a small staff of mostly Kelantanese designing products made in Kelantan, AND you can deliver world-class products and services valued by consumers all over the world. Amazingly enough, you can even do this while living in Malaysia (if you wish); you don’t have to battle jet lag like Hazimah and Stanley.
Wouldn’t it be fantastic if you and I could play a big game in the globe? What would it take? Now, if it was so easy to pull off, Malaysia would be full of such individuals. But folk like Nik and Azlin are the rare exceptions still. There’s more to it than what’s seemingly apparent. I decided to turn to Dato’ Sri Idris Jala, the CEO of PEMANDU, for some coaching tips.
Q: Dato’ Sri, you may not be a household name worldwide, but you’re seen as a turnaround guru around the world. At Shell, you turned around businesses in Sri Lanka and Bintulu. Your team rescued a global airline a few years ago. Now other countries want to learn from you what you are doing to transform Malaysia. I’m not a big player. I am not a country or a government. But I want to seek your advice on behalf of tens of thousands of Malaysians just like me. Are you willing to be our executive coach?
A: Of course. What’s on your collective mind?
Q: Okay, let’s assume that I — along with my ten thousand readers — we are all small players. We are like ikan bilis swimming in the world’s ocean. And yet we may have a product (a book, a guitar, a bed) or a service (financial advice, writing, counselling, whatever) that we want to offer to the rest of the world. We are small players with big dreams. What do we do? How do we get there?
A: First, you must identify your target segment. What’s your niche market? If you don’t do that you cannot move. Nik focused on producing amplifiers. But not just hi-fi amplifiers. He focused on guitar amps. And then he focused only on tube guitar amps. That wasn’t enough. He looked at all the best vintage and boutique amps in the world, and then he developed his tube guitar amps based on that. That’s world class thinking. Whatever you do, you need to frame your product or service so you are seen as the only guy in this whole country to provide for the market.
Q: This kind of focused persistence is really hard to do. I’d rather do a few things well in a few areas.
A: You might get very good at it. But to become world-class, you must target a customer segment, where you truly know their needs and have complete mastery of their challenges. Otherwise you won’t become world class.
Q: So the key is to always keep the focus on the customer. What do Nik’s customers really, really want?
A: Guitarists want great tone. Tube amps offer tone that is a wonderful combination of warmth and sharpness. The customers are also techie types who like to see what’s inside the amp. So Ninm has designed the amp so that his buyers can see the tubes and wires inside.
Q: What’s next?
A: Thirdly, you need to craft your specific value proposition. Nik’s products are clones of the world’s best amps. But that’s not enough. Nik has made his product cheaper. The build is better. The wiring is better. If you’re shopping for a tube guitar amp, its hard for you to pay a full price when you can get for one third the price. That’s great value.
Q: But I might still not be willing to buy the amp because I can’t try it out. Global customers are far away. They may not be persuaded to try something unknown, no matter how great the value.
A: That’s the fourth point. If you want to take your product to the world, you’ve got to craft the reasons for people to believe in your product.
Q: What do you mean?
A: You need to provide reasons and evidence for people to buy your product or service. There are hundreds of Youtube clips that show guitarists playing the amps. They are praising their amps. Nik’s sound is clearly better. And if you open up the amp, you’ll see that the soldering is clearly better. These are all reasons to believe in the product.
Q: Am I now ready to take my product to the world?
A: Not yet. Fifthly, you must think about trade-offs. What is it that you don’t give?
Q: You mean I can’t give them everything they want? What about pleasing the customers?
A: You must be very clear about what you do and don’t do. For example, I do turnarounds. I have my six principles of transformation. I don’t do Kaizen. I don’t do quality assurance. You’ve to tell your customer that if you want these things, you have to go somewhere else.
Q: That sounds harsh. But I get it. If Nik were to just produce normal amps, he’d get wiped out by the mass manufacturers in China and Vietnam. So he says no to mass produced amps. He also says no to selling his amps in local music stores. That’s be because he’d be so busy fulfilling orders for people who aren’t so skilled in music, and they’re probably the ones asking for price discounts, which Nik doesn’t give.
A: Yes, there must be trade-offs. its important to say what you don’t give. If you are not clear, you won’t know how to price your product.
Q: That’s your sixth point….
A: Right. The sixth point is figuring out how much you charge. You determine your price point based on what you do and don’t do. You must position yourself relative to the competition.
Nik knows every competitor he is targeting. He has studied every single amp.
The six steps are reiterative. You keep on changing, tweaking, improving. If you do the customer segment, you will be a world champion. You become the brand. Tony wants to do a Low Cost Carrier. He is relentless about cost. If you know the customer segment, you must deliver according to that. You will become average. You must be totally specific. You stay pure to the customers. You must understand what makes them tick.
And if your product doesn’t sell, you’ll need to go through all the six steps, and tweak and rejig, until you find the price point. The process of going global is a journey of reiteration. Along the way, you might decide to shift your customer segment to something else. You must keep moving. That’s the reality today.
The principles of going local to global
1. Focus on your target segment
2. Identify what your customers really, really want
3. Develop your customer value proposition
4. Give them a reason to believe in you
5. Think of trade-offs and what you do not give
6. Pricing