Report: Market Access for SMEs in Service Sector Workshop, March 10-13, 2015, Seoul, Republic of Korea

Group Photo of Participants

Group Photo of Participants

RATIONALE

After realizing the importance of productivity improvement of SMEs due to  intense global competition, the Asian Productivity Organization (APO) organized a workshop on Market Access for SMEs in 2011. This year’s workshop was organized to enable participants to understand the global market access situation and provide an overview of challenges faced by SMEs seeking wider market access in the service sector. The workshop aims to share information on global market access strategies and best practices for global competitiveness adopted and promoted by prominent companies from advanced countries in the service sector.

OBJECTIVES FOR PARTICIPATION

The APO workshop on Market Access for SMEs in the Service Sector is relevant in handling promotion of service exports.  By participating in this workshop, I could learn about the common challenges experienced by service provider SMEs from other countries in the Asia-Pacific region who wish to increase their shares of the markets for global trade and services. It will also afford me a glance on the best practices adopted by prominent companies from advanced countries through the sharing of country presentations. Through this workshop, I could also get insights on new trends in global market access strategies and on useful techniques in managing challenges in the highly competitive global market for services. These new learning’s would be helpful in the execution of my task in providing informative information during consultancy session with EMB clientele who are planning to market their companies globally. The workshop could provide me an overview of the global business environment to enhance my skills in formulating strategies to enable SME business missions to maximize possible market opportunities. More so, I can share my learning’s with my colleagues so that we can contribute in improving the quality of services of SMEs.

NUMBER AND PROFILE OF PARTICIPANTS

The number of participants was 18 from 13 different countries (Bangladesh, Cambodia, IR Iran, India, Indonesia, Lao PDR, Malaysia, Mongolia, Nepal, Philippines, Sri Lanka, Thailand and Vietnam. 10 participants are from the government sector while  8 are managers, CEO and director of owned or for other companies.

SCOPE, CONTENT, METHODOLOGY

The topics presented and discussed by the resource persons were all about the success of SMEs and some mentioning their own success and  experiences.

Mr. Young Soo Han
Manager
Korea International Trade Association (KITA)

He showed a film clip about this association. KITA was established on July 3, 1946 by 105 pioneering traders with the objective of advancing the Korean economy through trade. Since its founding, KITA has laid the foundation for economic growth by setting policy directions in trade, as well as developing the national trade infrastructure. It has over 73,000 member companies as of now. It has established 12 domestic offices and 9 overseas branches in major cities to assist SMEs in gaining foreign market entry. Its goal is to contribute to the development of the national economy as a private economic organization through advocacy of the Korean trade industry’s rights and interests to facilitate global trade. Since Korea’s trade volume reached 1 billion US dollars in 1967, the country has achieved remarkable economic growth, becoming the 9th country in the world in 2011 attaining a trillion-dollar trade volume. It is a new challenge for Korea to raise its status and makes its utmost efforts to become an FTA hub, bolstering growth and strengthening support for the Korea trade industry. Website: http://www.kita.org

SMEs may partner with large companies such in the case of a Korean company that sought partnership with SC Johnson and Pfizer for global medical services. However, success of Korea in the IT BPO/Game Development is not yet successful because value of trade is very disputable.  But the Korean government is developing health content and its IT system with the target to launch in 2017.

Professor Abdul Kareem
Singapore

One of the Resource Speakers is from Singapore named Professor Abdul Kareem. He presented Market Readiness and Global Partnership and Success Stories of Market Access. He cited that 70% of GDP in China comes from SMEs. In the years to come, the Regional Trade Agreement will be more powerful that FTAs. He mentioned that some companies that became successful in Singapore such as Banyan Tree International Resort and “What’s App.com” , Karsperky Lab, Li Fung, Ya Kun Kaya Toast and Kingsmen Creatives were due to hard work and modest lifestyle. These became world brands.

Prof. Kareem emphasized that when building a brand, the first customer is the best customer. So By word of mouth, a good brand will spread to many people. One must not just establish a business or branch in foreign land. He should have good local partner as his consultant because each country is unique in terms of law, customs and culture even within the same region.

Mr. Taneo Moriyama
Chief Consultant
Insight Inc.,
Atami, Japan

He talked about the characteristics of SMEs in Japan. In Japan, 99.7% of companies are full medium enterprises with 28 million people employed.  They have their own money to invest, not relying on bank loans. Most people, especially the old do not save in banks. They keep their money at home. Japan is behind compared to other Asian countries in service exports because Japan’s service industry is stuck at home. They practice SKU (Stock Keeping Unit), a delivery system that products are arrive to stores in its freshest condition. Products of same temperature will be delivered in certain times of the day. Delivery may be twice or thrice a day. No more stock pile of products in store.

Japan buyers tend to look for product innovations or new products almost every other week while retaining the price of goods. To stimulate consumer demand, more than 1,000 products are launched every year in Japan. 25% of Japanese people are retired and live long, taking huge amount of money from government as pension.  But these people are the ones who buys from convenience stores. Mr. Moriyama cited the success and failure of Japanese companies in the domestic and foreign branches. Tough competition is the main reason for closure. Culture is another factor to consider when doing business in other countries. The service called “Hair cutting in 10 minutes” where hair cut is done in ten minutes for busy people is successful in one part of Japan. Loyalty to the company is still very much practiced in Japan.

Dr. Ju-Young Park
Professor
Department of SME
Shun Shi University

Dr. Park teach marketing and franchising. He said that in Korea, the ratio of restaurant is 1 to 100 people. Koreans do not have enough time to cook for their families. Foreign franchises localize the taste of the food as the reason for success. But Koreans patronize their own brand also like the Japanese. He also discussed the reasons of success and failures of the companies that expand overseas. By studying very well the culture, traditions and local laws, a business may prosper in global market.

Site visit at Genesis BBQ Group, Korea

Site visit at Genesis BBQ Group, Korea

SITE VISIT

A visit at the Genesis BBQ Chicken was conducted on March 12, 2015. It’s not barbeque, it’s BBQ (BEST OF THE BEST QUALITY)!

The resource persons, APO organizers and the participants went to see the Chicken University facility.  We were impressed how the university is run.  There is a training program for franchisees prior to operation of a BBQ Chicken outlet for 2 weeks even they came from other countries. Buyers meet at the auditorium once a year for learning sessions. BBQ Chicken has undergone numerous innovations to cope up with the trends in their markets. Genesis BBQ Chicken has grown to become no. 1 franchise brand in Korea.  Within 4 years after its existence, it opened its 1000th outlet, followed by the first and only Chicken University in 2000. BBQ Chicken is also the 1st F & B (Food and Beverage) Franchise Brand to be selected as the Korea’s Top 100 brands.

BBQ Chicken began to expand its business globally. Today, it has opened in 59 countries with 4,000 outlets in the region of Asia Pacific, Middle East, Africa, North America, South America and Europe. BBQ Chicken is the first brand that uses 100% Olive Oil for frying, thus giving the brand an extra edge over other competing names by providing customers a tasty yet healthy variety of food. Its Chicken University in Korea is a professional education institution that trains its business associates the business know-how from the understanding of franchise business to the business mind and cooking. The R&D Centre in the Chicken University, which houses more than 30 professional food researchers, is at the cutting edge of BBQ Chicken’s continuous product improvement, while developing an appropriate localized menu to maximize customers’ satisfaction worldwide. They use chilled instead of frozen chicken and fresh new materials. Chickens are marinated in 30 types of natural spices for 12 to 15 hours to ensure flavors are absorbed.

A Chicken Theme Park is under construction. It will have auto camping sites and museum.  Its target day of opening is in 2018. Genesis BBQ Chicken has sponsored a lunch of all chicken menus in one of their outlets in Seoul.  The tastes of chickens were superb, also the vegetable salad, margherita pizza and juices with ice ream floats. Website: http://www.bbq.com.kr

OUTCOMES AND EVALUATION

The best practices of specific SMEs/sectors were shared by participants from IR Iran (construction in Iraq), Indonesia (fashion sector), Thailand (restaurants) and Vietnam (dragon fruit Tam Vu Cooperative). Philippines shared the SME access to global market of the IT BPO sector. The four (4) Resource persons were highly experts on the topics they lectured.

Participants were allowed to explore and eat out during lunch break and dinner. The APO Korea and Japan sponsored two (2) buffet dinners for us to experience the traditional and authentic Korean food.

Friendships were developed among participants. A facebook account was created for the 2015 participants to the workshop of SME Access in the global market.

RECOMMENDATIONS AND ACTION STEPS

I highly recommend that same workshop should be regularly conducted to benefit countries that are not yet successful in gaining access to global markets.

Submitted by (27 April 2015)

MARIA INGRID JAVALERA
Senior Trade and Industry Development Specialist
DTI- Export Marketing Bureau

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