Explaining the Global Consulting Project

The more observant readers of this blog may have noticed that I blabber on about Thailand every January (see here, here, here, here and here for examples).

I travel to Bangkok each year to supervise 20 lucky (and talented) students who work intensively on ‘real’ company projects.  It’s a fantastic learning opportunity for all involved (including me). It also highlights something that is coming through in my current research – that hands-on experience matters in terms of how managers frame the very complex decisions they confront in international arenas (You’ll see more on this in coming months on the blog).

So, you could say I’m ‘shaping the minds’ of future business leaders! Alarming I know.

Here’s some more on what we were doing in Bangkok (a story I wrote for the Aust-Thai Chamber of Commerce magazine  – see pages 5-9) – just click on the picture:

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Anyone see a 7-Eleven around?

I’m here in Bangkok for my annual supervision of the Global Consulting Project.

And again, I have been struck by the ubiquity of 7-Elevens in this city.  On the relatively quiet street of our hotel there are four branches of said store within a stretch of about 250 metres, including two pretty much directly across the (narrow) road from each other.  Just 400m in the other direction there are another three stores in a 60m stretch.

This obviously generates lots of discussion. One student said he’d seen similar density in Taiwan.  That got me searching for some data to check out which locations in the world have the most of these stores per person.

And here’s what I found.  In terms of population per 7-Eleven store (i.e. national population/number of stores), Thailand is in the top five globally (with ‘top’ meaning not many folks per store, or, put differently, the most stores per person):

I included Australia, simply for illustrative purposes.  We’re a fair way down the ranks (see here for the lengthier store count list – the US (c6,500 is missing)). The table identifies what appears to be the ‘natural home’ of the convenience store – densely populated urban centres around Asia.

For those who have missed the back story, 7-Eleven originated from the US, but was bought out globally by the firm’s Japanese master franchisee almost 25 years ago.

Japan had a pretty big head start on Thailand (opening in 1974, versus 1989 for Thailand), but Thailand is catching up fast.  I saw an estimate that there are over 3,000 stores in Bangkok, which equates to about one store for every 4,000 residents in this megacity (and comfortably defeating city state Singapore).

The Thai franchisee is doing something right, with profits reportedly up fivefold in three years. No wonder there’s talk said firm is chasing the franchise rights for Laos, Cambodia, Vietnam, Myanmar (and also some regions of China!).

I do start to wonder how far such expansion within a given city can go.  Could we eventually see a Bangkok headline like this one (mocking Starbucks’ rapid growth)?

These two stores are within 50 metres of each other in Silom, Bangkok

Thai Latte please

A few months back I made some noise on here about the scope for Australia to leverage a barista advantage internationally.

The argument was that our wide brown land was at the cutting edge of the ‘third wave’ of fancy coffee-making (and by fancy, I’m not talking about the Franken-coffees dreamed up by Starbucks for people who like whipping cream, flavoured syrup and milk rather than roasted bean-infused goodness).

Having spent the last fortnight in Bangkok, I can say there may well be considerable competitive advantage for the Aussie approach a few steps back from the leading edge also.

After enduring the overpriced faux coffee of the aforementioned US giant out of desperation, and the abomination that is my hotel’s brew, I followed a tip from an Aussie and headed to a little café run by some locals who’d lived and worked in Melbourne (reportedly).

Café Ohana is doing no more than what your standard Melbourne coffee vendors does, i.e. latte, macchiato etc. They deliver it in a slick Scando-decored venue, with tasty sandwiches and a mix of cakes, but it’s not anything amazingly groundbreaking.  But it felt like an oasis to me, and seemed to be a happy haunt for numerous Japanese ladies who lunch.

It must being doing well, as the firm is about to open another branch (according to their Facebook page).

It’s a reminder that international  transfer of competitive advantages doesn’t always have to be lead with the fanciest, most innovative version of your product.  Indeed, sometime it pays to tone down the radicalness so as to find a receptive audience.

Now if only I could find a purveyor of quality craft beers around here too…

Entrepreneurship from the beachside

This interview with Travelfish founder offers some nice insights for those of you/us thinking that building a career around lying on a South-Eastern Asian beach would sure beat winter in Melbourne (feel free to substitute your wet and windy hometown here).

Stuart McDonald certainly seems to have built a nice life of running an informative travel website for several prominent countries north of Australia.

I presume many of his site visitors (the folks who are providing the click through revenue) come from down under and other Western nations. But as the interaction is web-based the visitors don’t really care where he is.

His suppliers (i.e. the content providers) and advertisers/clients (the hotels, travel companies etc) are in the six countries his site covers. He has made the very judicious decision to base himself closer to these folk. This reduces his overheads dramatically (as cost of living is so much lower) and makes his revenue requirements much lower. He presumably can also deal with any dramas much more quickly (espcially if they require a physical presence) then if he was sitting in an office in Sydney or Melbourne.

There are other aspects of strategic importance here (such as the decision to focus on a regional niche, the possibility of considerable early mover advantages from network effects, and the scope to extend the model to other locales users identify).

It sounds like a pretty cosy life. Now, can someone think of a version for the rest of us to pursue? 🙂

Mobile banking done well

I liked this version of mobile banking facilities that I spied here in the Thai beachside village of Bophut:

While there are quite a lot of ATMs along the same street, the hotels do warn that if you lose you card in one, you may have real dramas getting it returned.  The only bank branch is about 150 metres away up on the less glamorous and traffic-filled main road.

This little van fills a neat gap in the market and gives this bank (the third largest retail bank in the country) a little step up in attracting custom (and presumably can be moved to more popular or event-specific locales when need be).

Now that’s innovativeness…