Just How Can I Achieve 'Asset Light Expansion' in my Growth Markets?

Examining the options in terms of outsourcing, partnering or building your own laboratory facilities for quality and safety testing.

25 September 2014

'Thinking global whilst acting local' may be an overused phrase in many industries, but in today's fast moving global economy, there can be no doubt that those who can deploy their products and services quickly in the fastest growing markets will steal a unique advantage.

It is one challenge to align your organization's culture in the right manner for that goal, but it is no less of a challenge to finance and deploy such plans.

Stripping it down to core essentials, organizations need to get their brand established in those target economies ahead of the rest, but then it is vital to follow up quickly in deploying those products and services with all of the support that is required.

There are a myriad of routes to getting any product or service on the ground in a new market territory – from direct export, to toll manufacturing, licensing and franchising to 'new build', each with their own advantages in financial return, speed of entry, intellectual property or brand protection and risk management.

It all adds up to a costly initiative where smart thinkers seek to minimize capital outlay with no compromise to the primary objective. As the organization muses over the options and devises its expansion strategy – a question that must be asked today is 'what supporting infrastructure must I own'?

Agility or Capability?

Over a decade ago, for laboratory testing and product quality control, most major companies realistically had little choice but to 'own', as the independent laboratory testing services 'industry' was immature. Truly international networks of global testing laboratories, operating to uniform and internationally recognized quality standards were rare and there were no regional expert testing capabilities which are required for resolving the most challenging testing and measurement tasks which often accompany with new market entry.

Today, increasing and global harmonization of laboratory testing standards backed by appropriate accreditations and combined with the rapacious growth of the Testing, Inspection and Certification (TIC) industry means that there really are global partners for testing and measurement – routine or advanced, located in your target territories and upon whom you can rely.

The TIC industry has enjoyed a decade of significant worldwide growth, largely driven by the need to support the demands of the rising middle class in emerging economies for new products and technologies. However, the need for increased consumer safety and product quality standards has come 'hand in hand' with market demand. Major companies must satisfy those standards for entry as well as for their brand enhancement in those markets.

Today the TIC industry has matured - to the extent that it has its own strategies and investment plans to fuel further growth in capabilities to support precisely those markets that you may be targeting for your own products or services.

Against this backdrop there has never been a more opportune moment to address the question whether to 'build or partner' for testing and measurement support.

Andrew Swift is a Senior Vice President of Intertek. He joined Intertek in 2001 to lead the integration and development of the Group's new Technology Centre at Sunbury on Thames, UK. Andrew then led the global laboratory outsourcing growth strategy for Intertek’s largest division before establishing the Analytical Services Division in 2008, moving on to become Executive Vice President and then Global Business Line Leader of its Chemicals and Pharmaceuticals business. Both of Andrew's degrees are from UMIST, and he is a Chartered Chemist of the Royal Society of Chemistry. His experience makes Andrew Swift well qualified to help address many of the key issues faced by local and global businesses when considering outsourcing their testing needs.