Maybe it’s self-evident, but the world continues to be a smaller place as travel becomes easier, the Internet brings us worldwide information faster and businesses of all sizes expand into new markets. Looking at the globalization of the audio-visual (AV) industry, it seems that there are two major factors impacting how AV companies sell products globally – macroeconomics and technology convergence.
Macroeconomics has impacted where AV companies are selling their products across the world. Five years ago a quarter of Biamp’s export business was in developing countries such as China, India and Brazil. Now over half of our business takes place in these countries, with China and India as two of our biggest export markets, and I anticipate they will go head-to-head for the top spot in 2012. This change is influenced by the global economy: while Western Europe and the United States are still dealing with the recession, Latin American and Eastern Europe have come back well.
Obviously this impacts sales strategies, since each country and region will have different cultural and channel demands. Successfully developing these new markets is similar to getting married from the standpoint of commitment. Effective companies fully commit themselves to these new markets, and work hard to understand and develop the relationship with each market. It means learning more about these markets than what’s immediately evident.
In developing countries, the obvious points of entry are the large cities, since they are often considered ‘low hanging fruit.’ But companies that really make the full commitment understand that continued success depends on entering a market’s second tier cities, and devoting the resources to doing so. This requires a decentralized management strategy that goes beyond just sales. For Biamp that means offering more training in local languages and hiring staff locally. It also means thinking about localizing products. Vocia, our network-based paging system, was the first product where we truly looked at the international markets more than the US market during the development of the product.
Technology Convergence Factors
Ten years ago when Biamp started selling Audia, which is based on networking technology, consumer and enterprise technology were completely different and much more basic. Now you can find a basic network connection in nearly every home, and employees demand that same level of connectivity in the office. The backbone technology of unified communication is constantly evolving, so the concerns of today’s IT managers have shifted dramatically. Today IT mangers are extremely focused on network latency and redundancy, and asking questions about how to improve efficiency. In developing countries the answers to these questions are simpler because they aren’t dealing with legacy technology.
In fact, developing countries like India are leading some technology trends because they don’t have to contend with an existing technological infrastructure. This makes the path of innovation smoother than in more developed countries where the legacy infrastructure can dictate a certain ‘comfort zone,’ making it easier for companies to react instead of innovate.
I see this phenomenon when it comes to creating sales channels in developing countries. In developing nations distributors don’t play a large role, which means business is done directly with manufacturers. This makes global sales channels look much different when compared to the US. Again looking at India, people often buy AV products through IT logistics companies because they want to buy from the channels they normally buy through, and the integration side of the business has largely passed from the A/V sector to the IT sector. To them data is data and it makes no difference if you’re talking about an audio file or an email if it’s sitting on the network.
Really the sales challenges in the audio-visual industry mirror those found in other technology sectors. Almost every technology company has addressed the same fundamental questions about their sales channels: how and where do I sell?
These questions get to the heart of the technology business and my number one take away: a mindset change is required to be a global company with a global sales force. Whether it’s changing an organization’s management structure, localizing products, adapting to a different sales channel – global business requires innovation and flexibility from region to region.