Background: Our client, a family-owned manufacturer and distributor with a nationally-recognized brand desired to expand manufacturing and distribution to Asia, particularly China, Singapore and Thailand. Client had already identified Asia as their target market and had been exporting to one Asian country for many years. Company realized they would need to have product manufactured in the local Asian markets and was concerned about the protection of their Intellectual Property.
EW was engaged by client to identify the specific steps needed to implement their strategy, assist their legal counsel with input to master license agreement and to conduct research in Asia. Client had developed strategy to perform a combination of relationships to include manufacturing and retail licensees.
Challenge: Client developed strategy from an international sales perspective with little thought given to business process development necessary to execute strategy. Client had well-recognized brand in the US that needed protection and owned proprietary processes and technologies to manufacture and perform quality tests. These proprietary items are the companies Intellectual Property (IP).
Client was a well-established manufacturer and distributor domestically, however, client was not yet successful on an international level. 100% of client's manufacturing was domestic and the company needed to develop subcontract manufacturing processes to identify and qualify Asian subcontractors. Additionally, the company needed to gather market intelligence information on their competitors, multiple retail chains and potential subcontractors.
Solution: EW recommended and performed a multi step approach:
- Conduct Business Process discovery sessions with client to determine which current processes could not accommodate an off-shore expansion
- After identifying gaps, rebuild business processes to support off-shore relationships in Asia.
- Assist client with business case development and business plan development to include pro forma financials.
- Build project plan identifying the steps required to obtain the subcontracting arrangements, licensing agreement process, qualification of identified subcontractors and retailers, competitor and market information, vendor negotiations, etc.
- Build operational processes to assist in the protection of client's intellectual property.
- Review all licensee agreements and provide input to legal counsel with respect to possible licensing changes based on EW's extensive Asian experience.
- Perform market assessment studies of the Chinese, Singaporean and Thai markets.
- Perform competitive intelligence on domestic Asian competitors and identify manufacturers and retailers.
- Perform vendor due diligence to accurately verify vendor representations, ownerships, vendor and government relationships.
- Assist with Vendor negotiations and selection.
Result: Relationship is ongoing with the project on schedule. Client is better equipped to select licensee and supplier relationships. Client feels that a number of problems were averted due to the extensive experienced and advice given by EW.
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