|
Car Fleet Strategy in 2011: Are You Ignoring Business Close to Home?
|
|
|
New business development a long way from home, especially when those new markets could be almost infinite, is much more exciting than looking closer to base, at ones’ own doorstep, for developing and new clients and new sales.
Almost every company in our industry is eyeing up the BRIC markets – Brazil, Russia, India, China with their almost infinite business growth potential. But are there better, albeit more modest and less risky growth and profit opportunities waiting to be harvested relatively close to home ? While the BRIC markets may offer the biggest opportunities longer term, what risk do they pose ? There is always an enhanced risk with a new opportunity in taking a new product or service into a new market that has little or no experience of providing or buying that service. It can be fraught with problems. Are there less risky opportunities that one might develop shorter term while the magic BRIC markets come to terms with our type of product and acquainted with the European business vehicle model ? If one is risk averse – or even cautious, then read on. Many business strategists claim ‘first into the market gives a real strategic advantage’ – yes it probably does, but at what risk and cost ? A new market with a novel business concept – fleet management or leasing for example – may take time to accept the new idea. Equally, there is the necessity of understanding the local culture and business climate, competition, identifying and perhaps helping to grow service support and then finding new customers. If your existing customers expect you to enter a new market to provide them with service support, that is a different matter – you have a customer you understand and you can develop together. BRIC markets are huge in volume terms – geographically too – a quarter of the globe’s land mass – can you take that on from scratch ? How much business would you need to have a critical mass ? China alone is now the biggest car market – what share would you want to lease ? Some might say - can you afford not to be there ? Many a successful company has a business model which suggests they ‘lead from behind’ – this could be a case in point! Let others make the expensive mistakes, buy their staff and grow – later. And what about the CEE ? Where else might one look for real new business opportunities ? The CEE markets may well be an interesting proposition if your business is not already there. Essentially the old Warsaw Pact countries, they are now moving forward with increasing economic confidence. With the exception of Poland, none of them are especially large, but they do have the great benefit that they are relatively close to the EU15 and share much of the business ethos of the EU15 – and are normally only a couple of hours away if senior management have to intervene in development or management activities. Equally, within the EU legal and accounting issues are gradually converging. For the international fleet management and leasing business with a spread of clients, many will either have moved into the CEE markets or be contemplating such moves as they emerge from recession and reposition themselves for growth. Such a business status can represent an excellent opportunity for their suppliers. For a company entering a new markets, better to take with them their own suppliers who they know and trust. Their business is not to provide business mobility, it’s to sell goods and services – your business is to provide that transport. The international leasing company can have what may amount to a symbiotic relationship if you move into a new market together – you need each other. CEE markets will certainly be different to the EU15 markets; vehicle requirements may be different; income levels and costs may be lower; dealers less experienced in terms of supporting fleet business. Used vehicle disposal may raise issues – in some markets lessors almost routinely move end of lease vehicles to other countries for disposal because used car markets are not yet mature enough ot have the volume capacity to absorb ex fleet vehicles. The checklist in Figure 1 highlights some of the issues which might need to be examined when considering new business development in as yet untapped markets. Think about the services you might seek to provide if you open a new market closer to home, and perhaps less glamorous than the BRIC markets. Your clients are presumably specialists in areas other than fleet management – that may give you the opportunity to provide a wider range of services in the new markets than in existing markets. You can take over the whole provision of personal business mobility for them. Certainly part of that service will need to be subcontracted to ,local suppliers – or to your existing outsourcers which may already be operating there. However, a package for a CEE market, or indeed for all of the CEE markets, may well prove less complex to provide than seeking to provide the same levels of support in a BRIC market. ‘Small and perfectly formed’ might be the definition of the individual CEE markets, few can provide the levels of outsourcing capability as the EU15, but they are closer and probably more akin to your current business than going for ‘big is beautiful’ – in terms of the BRIC markets. Be careful Every business needs a strategic vision, it also needs to be prudent. It is a very nice decision to have to make – develop CEE markets – several smaller countries but with an affinity to your existing successful business – or ‘go for broke’ and seek to develop a BRIC market – few would seek to take them all at once. Maybe BRIC markets are sufficiently alien as to justify a radically different modus operandi – do you have that model, the people and the clients to be sure of a realistic start – or should it still be a dream for tomorrow ? I’m not saying ‘avoid the BRIC markets’ – but are you ready for them and what they might represent – or is there still high quality domestic business waiting for you ? Think carefully about new markets you wish to open up!
| 28/02/2011 |
|
|
|
|
| |
|
|
|
|
Registration 
