1 teligent best in france case study january 2005 by: david chouinard, wei-jyun hoang, & eric...
TRANSCRIPT
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Teligent
Best in France Case Study
January 2005
By: David Chouinard, Wei-Jyun Hoang, & Eric Vambert
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Agenda
Company Overview Global Operations Doing Business in France Essential Advice
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Company Overview
Teligent is an international telecoms company based in Nynäshamn (Stockholm), Sweden.
Offers network service providers (B2B) application based solutions to increase revenue and end-customer usage.
Clients include BT, Cingular Wireless, Telefónica, Telia and operators within the Vodafone Group.
Founded in Sweden in 1990, the company is listed in Stockholm
€50 million in annual sales with a goal to achieve 10x higher sales by 2010.
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Telecom network service providers: Have heavily invested on infrastructure Experience a big churn Have some spare capacity
Teligent helps them improve: The revenue per user The fidelity of users The quality of service
By providing tools that: Use the spare capacity for adding value services Improve control of network and invoicing
Company Overview
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Teligent offers innovative solutions such as: Voice mail Messaging solutions (e.g.voice/fax messaging, unified
messaging) Mobile data solutions (SMS and MMS) Intelligent network solutions (e.g. Service Management) Service access management Pre-paid call management Virtual private networking Next generation networks (including application
interfaces and switching)
Company Overview
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Company Overview
Innovative applications developed from scalable proprietary platform (Teligent P90/E middleware)Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Clients include:
Company Overview
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Company Overview
Teligent International Sales by Region
Nordic Countries
25%
Africa15%
Middle East14%
Americas12%
Western Europe
30%
Eastern Europe
4%
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Company Overview
Key figures and breakdown of SalesCompany
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Diverse range of competitors, although no distinct group of peer competitors Large global suppliers of telecom equipment Global value added specialists Local or regional niche suppliers Local or global system integrators
Not unusal for a company to be both a competitor and a potentially valuable partner, such as Nokia, Ericsson and Lucent
Company Overview
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Global Operations
1990
1995
2000
2004
1990, Company Founded
1991, first order received from Swedish
organisation
1994, decision taken to enter international markets
1995, first int’l order received from Britian (IPM)
1997, subsidiaries established in France,
Germany and Spain
2002, Implemented globalisation strategy to expand to continents
outside Europe and North America
2003, Breakthrough orders in Africa, the Middle East and in the West Indies, 44% of
orders from outside Europe
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Teligent’s overall operational goal is to become a leading global supplier of advanced value added services for telecom networks
Expansion on the basis of establishing new indirect sales channels and geographic expansion
Teligent is represented in Brazil, England, France, Germany, Morocco, Singapore, Spain, Sweden, UAE, and the USA.
Global Operations
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Doing Business in France
France is around the fifth largest economy in the world with an annual GDP of about 1.9 trillion (1/5 of the US)
2nd largest economy in Europe Population of 60 million with a high disposable income of USD
29,000 per capita Ensuring foreign direct investment is of high priority for the
French government to ensure growth and jobs
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
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Many foreign investors are attracted by: Financial incentives Skilled and productive labour force Central location in Europe Quality of life Free movement of people, services, capital and goods
However, investors continue to be concerned about: Government economic regulation and taxation High social costs Complex labour environment Employee rights and benefits can make exit costs high for
investors seeking to leave France
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Teligent came to France to be near potential customers and ‘conquer the French market’
Other key benefits include: Highly skilled labor, strong concentration of engineers Able to ensure high product quality and innovation High productivity (e.g. revenue & profit per French
employee) Location benefits, such as transport, time zone, and quality
of life for employees Market Potential (i.e. growth potential, customer demands
for cultural adaptation of product(s), launch platform for other European countries)
Less taxes than Sweden and cheaper than the UK Paris offered an ideal central location with a large
population and good industry links
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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However, Teligent has had to adapt its strategy in response to several challenges posed by the French market Economic downturn in 2000 Cancelled contract with France Telecom Difficult for small companies such as Teligent to do
business with the small number of large service providers Companies such as France Telecom demand reliability
from more well-known, established companies such as Ericsson and Alcatel
France still considered a long-term growth potential North America and outside of Europe offer the best
growth prospects though
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Other constraints mentioned include: Cumbersome French bureaucracy Relatively unfriendly business/enterprise environment Auditing laws Labor laws Intense pressure to reduce prices and high competition
Key costs cited for locating operations in France: Employee compensation Potential exiting costs (employee severance packages) Corporate tax
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Teligent has successfully adapted its business model and plans to remain in France
French operations are used as the platform to reach other Francophone countries such as those in Africa, including: Morocco Ivory Coast Niger Togo Tunisia
Teligent has avoided establishing a local office in Africa, which would be difficult as there are no obvious hubs (highly differentiated markets in Africa with large economic and political differences between countries)
Nonetheless, the company tries not to be too French in order to avoid perception as the ‘old colonial power’
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Teligent enjoyed initial success in Morocco through an agreement with Maroc Telecom
Followed up this success with a deal from Atlantique Telecom, one of West Africa’s largest carriers; based in the Cote d’Ivoire
Involved installations in four markets: Burkina Faso Gabon Niger Togo
Further growth predicted for Africa Support office for North Africa established in Morocco to help
French subsidiary in this region Africa accounted for 15% of Total Sales in 2003 (only 10
employees in Teligent’s French operations)
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Being a small company has also enhanced the company’s ability to adapt in France relative to large companies Closer relationship with employees Employees are more willing to work long hours than those
in large companies No Union involvement, flat matrix organization structure Strong commitment and loyalty from employees Can provide special rewards to employees that are more
meaningful and cost effective
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Recruitment: Ads in Figaro for engineers APEC Head hunters for salespersons Diverse workforce composed of French and international
employees Compensation
Fix for engineers Percentage of sales for salespersons
Appraisal Twice a year but flexible since only ten employees Problems highlighted quickly Needs for training identified easily Expectations are known by all employees
Company
Overview
Global
Operations
Doing Business in France
Essential
Advice
Doing Business in France
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Essential Advice
France is a large, important market and can be profitable Being French is the best way to do business in France Think globally but act locally and adapt to customs Hire French staff and legal support Hire French sales people and propose business in a French
way French knowledge and language can be profitable for
reaching markets outside of France
Company
Overview
Global
Operations
Doing Business in France
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Advice
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We Thank
Mr. Hällerstam: Managing Director Teligent France and Africa
Mr. Melin: Project Manager
Teligent SAS
14 Boulevard Montmatre
75009 Paris
Tel: +33 (0) 1 48 00 18 18
Fax: +33 (0) 1 48 00 18 19
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Our Team
David Chouinard [email protected] Résidence Expansiel
Chambre n°17
1, rue de la Libération
78350 Jouy en Josas
01 39 67 88 31
Wei-Jyun Hoang [email protected] 15 rue Léon Bertault, 91120 Palaiseau
06 33 63 13 00
Eric Vambert [email protected] 104 rue Cambronne
75015 Paris
06 81 45 54 49
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Bibliography
Teligent Annual Report 2003 Teligent Quarterly Report, September 2004 United States Department of Commerce, ‘Doing Business in
France’, http://www.buyusa.gov/france/en/111.html