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Examples from real life of Becker Consulting Services All
company and product
names have intentionally been made anonymous.
Is the flashy new technology really sound and competitive?The beautiful face and the dirty underwear…No Name Company had
developed an interesting software product,
Carinet, targeted towards a very large professional group. It was
developed
for the domestic market and the customer potential seemed fantastic.
Carinet
was also claimed to have excellent global potential. The business plan
was
glossy and impressive. All figures seemed OK and the staff
competent.
No Name Company turned to an investment banker for financing. The investment banker saw no reason to doubt the viability of the business concept, business plan etc. They were, in fact, quite confident and embarked on a tour around the world to visit numerous potential investors. They did impressive, flashy presentations at the most elegant conference locations, together with the inventor of the product. Champagne and luxury canapés were served. Investors were enthusiastic and provided a flood of money. All set for excellent business, one might think. We made a quick analysis of Carinet, because we were rather impressed and interested ourselves. It took us a day or two. We ended up with quite a number of questions. They concerned serious flaws in the software itself, considerable difficulties for the internationalization of the product and marketing on other markets as envisaged, information security flaws, and other problems. We reported our findings to No Name Company. They were grateful and apparently embarrassed. We did not hear from them for a long time. What happened? Well, the company fairly soon got into serious trouble. They could not deliver the product as promised, in spite of having lots of orders and interested customers. The money invested was spent, to no use really. After a while, the investment banker got into even worse trouble and eventually went down the drain. This could of course have other explanations as well. Obviously, the investment banker should take a considerable blame for the failure. Similar disasters have hit many other venture capitalists that invested too indiscriminately during the IT boom. Consequently, many enterprises and private investors had to bear significant economic losses. Conclusion
The
investment banker possessed neither the
technical/scientific nor the trade policy competencies necessary for an
adequate analysis of No Name Company’s business concept. The banker had
thoroughly scrutinized the business plan, but had ignored the probably
most important issue – the company’s ability to deliver the technical
solution according to promises.
If the investment bank had asked Becker Consulting at an early stage to give a second opinion on Carinet, the story might have had a happy end. At least for the investors. Probably also for No Name Company. The investment bank would have had the advice to either refrain from investing or raise adequate conditions for the investment. If the bank believed in Carinet’s potential, it might have contributed to Carinet’s future success by prescribing coaching services from Becker Consulting to No Name Company. Thus, Carinet could have been developed into a trustworthy product, ripe for internationalization. Certainly, the heaps of money invested here could have come to better use Is it safe to use a sensitive encryption component from the US in the next investment in China?The jewel in the fortress and the golden dragon Universal
Technology Exports, situated in a European country, was
planning for an extremely interesting investment in trade with China.
It
concerned sophisticated electronic equipment. In order to be truly at
the
forefront, they wanted to incorporate sensitive encryption components
from
Cryptics Inc., a US producer.
UTE had many worries: What about licensing requirements? How can we sort out the relevant parts of all that vast and confusing US legislation? How do we even find the correct information? Is there perhaps a total ban on US exports of such components, if the end user is in China? Might there be different rules depending on the status of the end user? If we can get the product to Europe, what about licensing from Europe to China? If we tell Cryptics about our plans, do we risk being put on the "black list" for future deliveries? If licenses are required, how do we get them? US authorities are huge and confusing, where is the right contact? What European authorities need to be contacted? Help… we are in a hurry… the contract with the Chinese customer is due to be signed in a few weeks! Yes, the situation was indeed complicated and stressful. However, we had excellent contacts in Europe and the United States and undertook to help UTE. We worked day and night to use both European and US time zones. We acted as an intermediary for our anonymous European client in contacts with Cryptics and the relevant authorities in both the US and Europe. Fortunately, we managed to solve all these problems of our client well ahead of schedule. From there on, a new chapter begins… Doing business in China is, indeed, very special and will undoubtedly give UTE many new and demanding challenges. Conclusion
Becker
Consulting could evaluate the jewel and be
the persistent pathfinder with the proper keys to the fortress.
We possess the adequate technical/scientific, trade policy and
administrative
competencies necessary in this case. Well… to command the golden dragon
was
of course up to our client…
It may be a very sound investment to consult us before entering a new market. How do you make an investment sustainable when it takes years to develop the final product?From larvae to butterflies with a minimum of cocooning – or how to avoid dangerous temptations Super Power
Electronics had an outstanding technological idea,
grand visions, ample funding and excellent management. The problem was
that
it would take time to develop the product to its full potential. It
would
also require substantial investments in expensive and unique production
equipment.
SPE could already produce a smaller scale product. It would be perfect
if
they could start earning money on the smaller scale technology, since
that
would speed up the development of the grander, more visionary
technology.
At the same time, competing technologies were emerging with frightening speed. It was a race, indeed. It required a steady and rich flood of money. SPE had recruited excellent staff and was working hard. Would SPE disappoint its investors or make it to the top? We were asked to assist in analyzing potential applications of the smaller scale, medium term technology. We carried out an in-depth research on competing technologies around the world, global markets and potential cooperation partners for one particular, possible application chosen by SPE. We analyzed our findings and provided strategic recommendations. We introduced SPE to a number of interesting contacts in this particular niche. We also, on request, made a specific invention for SPE based on their technology. We did a global patent search and prepared the documentation to be submitted to the patent lawyer. At a considerably lower cost than SPE would have had to pay for the corresponding services, if provided by a local consultant in SPE’s domicile country. Success story? Well, things happen very fast out there… Timing is essential, among other things. Our services were necessary for the strategic decisions of SPE. As it turned out, SPE in the end, wisely we think chose not to put their money on an application that would be subject to an almost impossible global competition and an uncertain market. For SPE, as far as we know, the question posed in the headline still remains to be answered. From our analyses, in combination with their own skilful strategic management, they learned enough to avoid some tempting but potentially dangerous adventures. Some of their competitors are now caught between a rock and a hard place. There are many ways to win a contest… Conclusion
Becker
Consulting is competent to establish top
quality analyses for decisions on technical/scientific and
trade policy business strategic issues.
Copyright © 2002-2009 Becker Consulting Global Ltd. All Rights Reserved. The company logo is a registered trademark in some locations. All other company and product names mentioned are fictitious and any resemblance to real company or product names is purely coincidental. This document is provided for information purposes only and the contents hereof are subject to change without notice. Becker Consulting Global Ltd does not warrant that this document is error free, nor do we provide any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. Becker Consulting specifically disclaims any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the prior written permission of Becker Consulting Global Ltd. Contact us for a free, non binding, consultation to find out if you need us to look for new winning strategies. |
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