Asian Century Solutions
Assess, Launch and Grow Your Business in Asia

Engagement Models

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

- Charles Darwin

We lead this section with the above quotation because we firmly believe in it. We learn from the successes and failures we have experienced and seen in the market place and continuously adapt and innovate. Clients work with us because they are eager to adapt the new opportunities and challenges of today’s global economy and globally integrated markets. We recognize different clients require different engagement models and that engagement models which appealed to clients yesterday might not meet their needs today. The purpose of this section is to present examples of how we have worked with clients in the past and how we can envision working with clients today. It is a list of examples intended to promote thought and dialogue, We are always eager to consider nw ways of addressing the old problem of how to enable clients to achieve their objectives while ensuring ACS maintains a profitable and sustainable business.

Fixed cost / Fixed delivery 

This model is usually applied to market research reports, road show coordination, and/or one-off partner recruitment effors. An example of one such project we delivered for Data I/O can be seen here

Commission only

In some cases, we will apply resources to sell a product or service in Asia on a purely speculative basis with no long term commitment from or equity participation with the client. Common characteristics of such efforts include account protection or some form of exclusivity, products with short sales cycles not requiring significant technical resource, high commissions, some form of trailing commission, and products which can be sold through relationships we have already established.

Retainer + Commissions

This is our most common model. We build a team of technical and business development resources who become the client’s Asia Pacific sales and technical services organization. The team members carry the client’s business cards, use the client’s email addresses, and implement the Asia plan acting as the client’s resource. The team stays on ACS payroll until such time as the client feels the “start up” phase is complete. When the client is ready, ACS wil help in the establishment of a local subsidiary for the client and, if the client so wishes, the client may directly hire the ACS resoruces with whom the client worked during the start up period. This model enables the client to get into business quickly with limited fixed expense while both achieving progress and assessing the long-term fit with the people on the project. The retainer level depends on the number and caliber of resources required and the commission percentage depends on the average purchase order value and average sales cycle of the offering.

Joint Venture

The client and ACS become co-shareholders in an Asia based entity which becomes the exclusive Asia Pacific licensee of the client’s intellecutial property. Percentages of investment, equity and revenue share are all open to discussion. Buy out mechanisms and formulas are determined at the onset to avoid concern about hostage scenarios.

Build, Operate and Transfer (BOT) 

Although ACS commonly works on the “retainer + commissions” model,  many clients today have trouble with the cash flow implications of this model. So, we have adapted to change by introducing a new model: Build, Operate, Transfer (BOT). The BOT approach to Asia market entry has the following characteristics.

  • ACS establishes and owns 100% of a client’s Asia subsidiary for X years.
  • ACS assumes all marketing, sales, pre-sales, professional services, and support roles.
  • ACS makes low (20%?) product license royalty payments to Client. ACS sets pricing policy for Asia.
  • During this period, ACS has exclusive rights to all of Asia.
  • ACS pays Client for whatever support services it needs (other than training, which should be free).
  • After X period of time, Client can buy 100% of ACS shares for Y times previous 2 year revenue.

What does this do for the client? It provides a risk-free, cash-flow-neutral-from-Day 1 approach to Asia market entry. At the same time, it also enables the client to buy the business back with partners, customers, and employees in place, at a pre-determined price.