One of the most frequent technological problems met with international players in emerging markets is their technological and organizational incompatibility with local partners.

Usual challenges are like these:

• They want to bring new technology to the region – but no one of local manufacturers can utilize such technology
• They want to acquire local manufacturer and to incorporate it into the global supply chain – but find the local company utilizes technologies that require quite different materials (and thus they need to support "alternative" supply chain for that particular facility, while other facilities worldwide benefit unified supply)
• They want to acquire local manufacturer – but find its manufacturing management doesn’t fit corporate standards of the host company, etc.

ICG has excellent experience in resolving such kind of problems – with emphasis in technology and organization of the "smooth" transitions, corporate technological convergence, etc.

Case study

Challenge: International supplier of high-performance elastomers for automotive decided to expand its presence in the Russian OEM and aftermarket segments; the main challenges he met were technology incompatibility with local converters (compounders and fabricators of rubber parts), prices much higher to local competitors, and weak supply chain outside Moscow area.

Approach: ICG provided a client a set of services focusing in:

• Development of a strategy for technology compatibility with local converters
• Development of a strategy for launch of a JV in Russia for rubber compounding and high-performance part fabrication (that allows cost decreasing, governmental procurement penetration, etc.)
• Search for local converters with appropriate technologies (with focus in firms working outside Moscow area)
• Consulting at client’s negotiations with local converters, including JV potential partners, and with governmental agencies
• Risk assessment for a new business strategy in Russia

Value: Our client and its local partner (found with our assistance) could "smoothly" transform partner technologies to a compatible level; a JV agreement was signed – while local partner was included to our client’s corporate R&D process.