LOCAL PARTNER

In

T&M, you cannot take your principal partner for granted.

You must build goodwill for yourself. Or get out ASAP.

Sometime

in the seventies, Hewlett-Packard-now Agilent-entered the Indian

T&M market by appointing Blue Star as its distributor. In

1989, the company opened a Joint Venture (JV) with Blue Star

in India. Soon it bought out the Indian partner''s stake. Most

of the employees were retained. Almost the same happened with

Forbes Gokak, with which Wandel & Goltermann (W&G)-now

merged with Wavetek to form a new company WWG-had a partnership.

And with Hinditron, with which Tektronix had a JV. None of the

three Indian partners referred to here-Blue Star, Forbes Gokak,

and Hinditron-said goodbye to T&M, though. But they had

to virtually start once again. And surely, they are not in the

same position they once enjoyed.

So much

for the JVs. Distributors do not have a drastically different

story to tell. Hinditron, which was distributing Wavetek products,

is now no more doing that. After Wavetek merged with W&G,

the Indian subsidiary of W&G is now distributing Wavetek

itself. IFR, which was another principal of Hinditron acquired

Marconi, and Marconi''s channel in India, Blue Star is now the

distributor of all IFR products. Since these Mergers and Acquisitions

(M&As) are fairly recent, more such changes can be expected.

Sometimes one distributor could gain, another lose. But there

is no method here. If sometimes, the channel of an acquiring

company loses, sometimes it is that of an acquired company.

And those decisions are based on what suits the principals better-not

on the merit of the channels.

There is

no doubt about the fact that all major T&M vendors who see

enough business opportunity in India will like to come here

directly. It is only a matter of time. That time gap is shrinking

because of the M&As that are happening in the global T&M

industry. These are giving them instant access to new geographical

markets. Wavetek, for example, had only an indirect presence

in India. After its merger with W&G, it is in India directly.

Where does

that leave the local partners-a distributor or a JV partner?

How long can they keep on running from one principal to another?

And why?

Many distributors

are not very sure. They hope that somehow their business will

continue. And they will manage with changing partners. At any

point of time, there will be some new companies that will not

have a direct presence in India, and which they can represent.

But what about volumes, margins-business?

For many

companies-one is sorry to tell it so bluntly-it is a dilemma

that they do not know how to get out of. This is especially

true with big companies for whom T&M is one of the businesses

that they are into. The managers in these divisions keep on

convincing their superiors that things will be better soon.Unfortunately,

we will not see any miracle. Sure, opening up of new circles

for private operators, coming of utilities to communications,

and the opening up of Long Distance will push up demands. But

except for a few of them, most will look for T&M services

rather than T&M products. They will rather go to a big vendor

for total solutions, rather than buy products from a number

of distributors.

Is

There a Choice?



So as a distributor, do you have a choice? There are two. The
comparatively easier-though not so easy too-is to get out of

T&M business. The tougher option is to change the way you

do business. Before that, to change the way you think. You need

to realize that T&M is no more product selling-except for

probably in the low-end general-purpose instruments. You need

to look at yourself as service companies.

The first

step is to build an expertise in-house. Not just for providing

support, but to think out solutions as well. One mistake many

distributors commit is to take expertise as synonymous to training

the engineers. That is just not enough-tomorrow they can be

lured away by your principal! But the goodwill and respect that

you win as a company cannot be taken away.

There is

no alternative to working very closely with the customer. Nothing

can win you more goodwill than sharing responsibility with the

customer. Offering to help in areas where it is not your contractual

obligation is a sure shot way of building a long-standing relationship.

Just to repeat something which has been written, T&M is

now more of a service industry. Even while selling, focus on

the service part and not too much on the product. Tell them

what you will do for the customer, not what the product will

do.

Once you

enjoy the respect of the customer, all principals will think

twice before severing their ties with you.What

Does the Future Hold?



There will essentially be three types of local T&M companies
in India, excluding the manufacturers like Aplab and Meco. Firstly

those, which will continue to do some kind of business with

government users and survive for some more time. Secondly, those

companies, which will change themselves by adding more value

to themselves and continue with some selected principals.

The third

category will be a new breed of companies that will specialise

in testing and maintenance, and largely provide services. They

may or may not be having any distributorship arrangements with

any of the big T&M vendors, but will sell all brands as

long as it fits into their solution. As T&M becomes more

software driven and with India''s software strength, some of

the companies which go early into this area, may even make it

big. It is expected some of the smaller companies like Subex

and Fastech will graduate to this category.

Yes, one

last word. The JV route is the worst route to start your T&M

business. Then, one fine day, you will

lose your people, assets, and most importantly, even your goodwill.

To your partner.



The best path is to honestly ask yourself, if you really have
any strengths in T&M. If there is, however little that is-local

contact is not a strength-you can develop that to be a successful

T&M distributor, err...T&M integrator.