Saturday, February 04, 2006

Doing business in emerging markets

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Monday, January 30, 2006

about doing biz in emerging markets- my 10 commandments

For 40 days and 40 nights he laboured. At the end of the 40th night realization dawned and he knew the truth..and the truth set him free. Free to do business in emerging markets!!:) These are my 10 commandments from personal experience
• Thou shat understand thy Joint Venture partner. Thou shalt maketh effort to understand mutual vested interests –explicitly stated and implicit- for ensuring thy sustained beneficial partnership
• Thou shalt befriend Government and local authorities in emerging markets and try to align thy stated goals, actions and plans with Govt. policies. Then the Government and the Lord shalt both support thee
• Thou shalt continually test thy assumptions with ground reality through discreet feedback from local authorities. This shalt prevent unpleasant surprises
• Thou shalt recognize the absence of proper laws, governance mechanisms and a general lack of transparency business situations and shalt frame thy consequent response. Often there are no precedents, and even when there are, they are no predictor and sometimes not applicable to the new situation.
• Thou shalt strip ‘Investment banking deal making’ of its hallowed veneer. It is much like good old plain salesmanship or strategic account management
• Thou shalt not try to con thy partner.Joint Ventures that favor only one party don’t last too long.
• Thou shalt read between the lines and examine the financial numbers and assumptions in great detail to uncover issues that may have a potential future impact. While the spirit of an agreement is certainly important it helps to have the letter echo it
• Thou shalt recognize that doing business in emerging markets is no magic. The ‘laws’ of doing business are very transportable apparently though small variant subtleties do exist
• Thou shalt ,during an IPO pay a lot of attention to classifying productive assets and have strict covenants (if that’s possible) on use of proceeds
• Thou shalt not practice black magic. There is no magic to deal making. At the end of the day it just boils down to common sense and purposefully considering all available information (and systematically searching for relevant unavailable information) to making informed , balanced and fair decisions.
Ofcourse when thou art visiting they JV partner thous shalt not covet his house, his wife, nor his manservant, nor his maidservant, nor his ox, nor his ass!


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