Partner Search

We are specialized in locating international partners and fitting them together. Before making any partnership decision, consider at least the following points:

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Distributors/agents/reps
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Licensees
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Representative office: employees
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Contract manufacturing
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Joint ventures
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Acquisitions
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Special alliances

Based on your knowledge of how the market works and the requirements of your product, you can decide the best kind of partnership for you and begin a partner search. This could include a search for partners in a couple different categories, for example agents, distributors and joint venture partners. Different types of partners could be especially important if your idea is to phase in involvement from exporting through eventual local production.

Key considerations are:

•	Service requirements for your product, perceived or real?
•	Product tailoring to applications?
•	Technical sale?
•	Technical support?
•	Repeat sales? When, why?

In many cases, companies know very well what they are looking for because they have already decided on a global strategy. Small biotechnology companies, for example, commonly look for single licensing partners to cover major regions of the world (such as Europe, Japan, and the rest of Asia). In other cases, companies know they must set up local production, because their major OEM customers, who are already there, are telling them to. In yet other cases, companies have such highly technical and differentiated products that they only need to secure distribution. And so on.

If you don’t know who may be the best kind of partners, an outline of some considerations is presented below.

Representation options

Sales representatives : Paid employees who sell products on your behalf. Can also work on a partial commission basis.

+	Dedicated to your products; direct knowledge of customers; ability to plan
-	They assume no risk; hard to monitor from a distance; support expenses.

Agents: Independent commission-based agents.

+	Market and technical knowledge; direct knowledge of customers
-	Represent other accounts. May be more interested in short-term commission than in long-term growth. Hard to control, monitor.

Distributors: Distributors buy and sell the products on their own account and risk.

+	Consolidated shipments, fewer shipping/logistics expenses; No marketing expenses
-	No real contact with customers; Carry many other products, hard to focus on yours.

Selecting your representatives

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Its not easy. Ads, shows, trade associations, friends, professional search firms.

Due diligence

Visit and interview

Interview clients, references

Trial periods

Sales targets

Supporting your representatives

•	Training, here and there
•	Sales support: advertising, translated brochures, association memberships, etc.
•	Build personal relationship
•	Set regular visit schedule
•	Learn from your reps and adjust

Strategic Alliances

Why develop a strategic alliance or partnership:

•	Long term versus short term interests
•	Market share versus quick sales
•	Bypass some trade barriers.
•	Bring costs down, increase margins
•	Pressure from existing customers

Risks/difficulties:

-	Costs
-	Time
-	Harmonizing strategic objectives
-	Structuring
-	Managing

Types:

Contract manufacturing: Brings costs down to compete more effectively. Quality control key

Technology licensing: Production process, patent, trademark, know-how, trade secret. Long term can be a problem.

•	Technology transfer
•	Territory
•	Exclusive/non-exclusive
•	Fee structure

Joint Venture: Equity corporation with foreign partner. True long term, market share orientation. Issues:

•	Market access
•	Technical capability
•	Share Pinion (discuss examples of problem splits: fire pump, leather, etc.)
•	Key personnel (importance of CFO)
•	Labor
•	Quality control - image in market
•	Management (From a distance? Expatriate? Local search?)

Wholly owned subsidiary: Maximum control and costs. Same issues as JV.

Profiling and evaluating potential partners

•	Marketing & sales capability
•	Reputation
•	Technical level
•	Service capability
•	Organization
•	Workforce conditions and labor relations
•	Information and reporting systems
•	Quality and turnover of managers
•	Financial situation
•	Production efficiencies
•	Quality control
•	R&D

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