Q&A with Richard Keyse, Chair of the Europe Beachheads Advisory Board. NZ Trade & Enterprise's Beachheads programme is designed to provide New Zealand companies with faster access to better international networks.
Do New Zealanders have any advantages when selling to markets in the UK and Europe?
People invariably prefer to do business with people they have an affinity with. Culturally New Zealanders are very popular in Europe especially in the UK. Their typically open approach to doing business and a reputation for getting the job done gives them a distinct advantage.
Does familiarity with the United Kingdom result in a tendency for New Zealanders to underestimate the differences?
This is definitely an issue for some companies. Those companies who do the greatest amount of research and listen to advice tend to have the greatest success.
New Zealand Trade and Enterprise (NZTE) and the Beachhead advisors can help companies understand, and deal with these subtleties. It is disappointing to watch some companies that have excellent offerings make some 'amateur' mistakes.
Are you seeing more or fewer opportunities for New Zealand businesses in the current economic environment?
As Europe recovers from the recession many New Zealand businesses are seeing more opportunities, especially those that have positioned themselves appropriately. Budgets that were reduced during the recession are now returning and pent-up demand provides new opportunities.
With existing supplier-customer relationships being dislodged during the recession New Zealand companies have a rare opportunity to become the incumbent supplier. Previous competitors may have either disappeared due to financial circumstances or retrenched themselves to a point where their proposition has been impaired.
How is the economic downturn affecting business in Europe now? Are some markets faring better than others?
The recession in Europe hit some sectors extremely hard whilst others made record profits. Even within sector, some companies were not only better equipped to survive but used the opportunity to gain market share from poorly prepared competitors.
In today's global economy, geographical differences across Europe are less pronounced.
What other lessons are there?
Many New Zealand companies, particularly in the technology sector have to refine their USP in Europe to meet the gaps in the local market. This is regularly less understood and often takes too long to resolve. You only get one chance to make a first impression and prospects may be lost while companies learn some hard lessons.
What common mistakes do you see?
Some of the mistakes I have seen are under investment; lack of market entry preparation including competitor analysis; 'product' rather than 'solution' focus, and lack of executive commitment to the market.
Do you think New Zealand businesses underestimate the difference between markets in Europe? How different are they?
New Zealand companies are correctly more cautious about going into Europe, and as such probably do not underestimate the differences as much as in the United Kingdom. Depending upon the sector the various markets can be extremely different.
New Zealand's distance from market can be perceived as a negative, how can companies overcome this?
There is no single answer to this. New Zealand companies rarely look for the positives of coming from New Zealand. For example taking appropriate prospects/clients to New Zealand could cement a very profitable relationship and be money well spent. Companies have an opportunity to exploit the Rugby World Cup as a means to get senior executives to New Zealand.
It is also important for every company in New Zealand to understand what sustainability means to their offshore customers and make appropriate changes before it becomes a problem. There is a distinct naivety from many New Zealand companies on sustainability matters.
How can companies prepare for success in the United Kingdom and Europe?
Research, research, research. Ask for and take advice from those who have already had success in the market. Understand your USP. Listen to your prospective clients.
What examples do you see of New Zealand companies doing well in the United Kingdom and Europe?
A number of companies new to Europe have become cash positive relatively quickly but it is the scalable companies that build foundations for significant and sustainable growth that provide the greatest excitement. Growth tends to be incremental rather than dramatic, which can be observed in less mature markets.
How should expansion from the United Kingdom into Europe be approached?
Firstly, Europe should be viewed as multiple markets not one. Each market should be approached separately and with necessary preparation.
Partnerships offer one route to European markets, not only to overcome language barriers but also to combat resistance to foreign products. Another is to have sales teams operating out of the United Kingdom, with the aim of establishing a local team once there is good traction in the new market.
Is the UK the best entry point for New Zealand businesses or is there more potential in starting elsewhere in Europe?
Historically the United Kingdom has been seen as the place to start and in many cases this still holds true. However the decision depends entirely on the industry sector and target client base.
How can the Beachheads programme help?
The Beachheads programme provides access to advisors who are successful private sector executives and have many years of relevant experience. Their guidance and mentoring can save New Zealand companies from making some costly mistakes. 'Faster access to better networks' is the catchphrase of the Beachheads programme and having access to advisors' own networks can be invaluable to New Zealand companies.
What are your top tips for success in the market?
•Research as much as possible then talk to as many people as you can
•Commit to the market and be prepared to be in it for the long haul
•Know your competitors
•Consider having a principal in the market, at least for the first few years
•Invest time in your relationships with advisors and clients - building confidence and trust will bear fruit in the long run.
Richard Keyse
