Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

For Market's Sake, Train the Dealers

In Russia there are a lot of customers, a lot of very young companies and very few experienced business managers. For Western manufacturers, success or failure often depends to a large degree on local distributors.


When this relationship breaks down it can often be due to an inability on the part of the Russian partners to overcome the strains of managing their growing business.


Western manufacturers entering this market often bemoan the fact that their choice of partners is limited by the lack of Russian dealers with Western levels of financial controls and accounting practices. The answer is that someone has to help these companies to develop.


To meet this challenge, most Western information technology companies now organize "dealer training." This involves explaining to Russian business partners how products should be sold, serviced and supported. The training is to ensure that any dealer carrying a company's product is giving customers adequate levels of service and any dealer displaying the corporate logo is doing it justice.


Sometimes companies will hold more general initiation courses for new Russian partners that can describe how, according to the corporate guide book, certain business situations should be handled.


What very rarely happens, however, is that local companies get the opportunity to take courses in which they can learn lessons about their businesses independently from the corporate mindset of their suppliers.


Last year Hewlett-Packard began offering what it called the Distribution Academy to its Russian distributors and larger dealers. These week-long courses in Russian computer distribution have now been run four times and Moscow-based Merisel-CAT has subsequently hired the same training company to use itself.


It is Hewlett-Packard's worldwide philosophy that its own success depends on the success of its business partners. A cliche perhaps, but few manufacturers have been brave enough to organize an event in which the interests of their distributors take priority over their own.


Michael White, of course organizers Dent Lee Witte, says that, although the courses have been mostly paid for by Hewlett-Packard, they are entirely vendor independent and to a large degree this has been the reason for their popularity.


"In a young market like Russia this is essential. It is the only way to ensure your business partners (a) remain your business partners and (b) remain in business," he says.


The courses, held in Switzerland, are not free and participants pay about half the cost. A degree of financial commitment from each of the companies taking part was absolutely essential.


The Distribution Academy is not designed to teach Russian distributors about their own market, but to point out similarities in the periods of crisis that every growing company goes through.


For example, most Russian computer companies were established by groups of friends or informal teams at the same research institute. As businesses grow there comes a point when they need central leadership.


The emergence or appointment of a general manager can often lead to divisions between the founders and a change of atmosphere at the company as friendly informality is replaced by a more structured but impersonal business. Often companies never survive this stage.


But above all White says the Distribution Academy was valuable as it shows Russian resellers, with corporate rose-tinted glasses removed, just how tough the computer distribution business has become everywhere else in Europe.





Robert Farish is the editor of Computer Business Russia, tel: 265-42-14, internet e-mail: farish@glas.apc.org