Following the leaders (or how to do business)

They say that imitation is the sincerest form of flattery. What I teach my students is “Always have a business model” to follow, to copy, or to guide you towards what you want to be. Many people put up businesses or companies and end up doing twice the work or taking twice the time to build, simply because they had no idea or nothing to compare with. This may be acceptable in a pioneering field, or if you’re the only game in town, but with internet and all, having no business model is no longer acceptable.

Back in the ’50s and ’60s there was a popular children’s playground chant that goes “The leader, the leader, we’re following the leader” as they formed a human train going around the playground. That chant or cheer has as much application and wisdom today as it did then and an actual example would be what Foton Philippines under the United Asia Automotive Group  Inc. (UAAGI) has done.

We first heard of Foton in 2006 as a “Chinese car brand” and that was at a time when a number of Asian automotive brands particularly from China faced lukewarm reception from the Philippine market due to quality issues and after market sales support. Everyone assumed that “Foton” would either fall by the wayside or stay a hole in the wall operation like many other Chinese car brands.

But unlike their local counterparts, the UAAGI group were not newcomers into the business. They started out in the tough and competitive business of selling surplus engines and vehicles. Then they climbed up the business ladder by becoming locators at the Subic Bay Freeport where they grew into importing, conversion and sale of Japanese right-hand vehicles from cars, trucks, SUVs and industrial equipment. They worked through the years and faced commercial and government challenges even excessive restrictions as well as a mushrooming of fly by night competitors.

They certainly learned well to the point of realizing that they had to evolve into becoming a distributor of a legitimate brand. From there they searched for the right brand and the right product line based on a market demand that was sustainable. As my mentors always tell me: “Find a need and serve that need”

Under the leadership of their “Kuya” and business leader Dominic Sytin and company president Rommel Sytin, UAAGI chose right with Foton because Foton was and is the largest truck manufacturer in China with a global footprint all the way to Europe that represented a proven track record and competitive performance.

But having the product was not enough. Unlike many Chinese brands that chose to play the backyard game or act like a small time player, the Sytin brothers and UAAGI followed and copied the industry players and kept pace but in their own way. In terms of marketing, Foton Philippines spent a respectable sum of advertising money in print and broadcast just like big Japanese carmakers. With a smaller budget, they found creative presentations, placements and timing that would catch their buyers’ attention.

Not only did they place regular ads in national dailies, radio and TV they had the street smart of betting on programs such as Wow-Wow-Win with Willie Revillame for the long haul. They clearly understood the importance of presence and public participation from their many years of being auctioneers in Subic. All this of course came together as a result of Foton Philippines hiring experienced people from the automotive industry who were driven to show up the big boys and who enjoyed working in a small but motivated team.

Foton also did many of the things that manufacturers and distributors did such as hosting “Launch events” for new products, hosting factory visits for motoring editors and reporters to Beijing or to attend motor shows in Shanghai and other major destinations. Just like the “Big Boys,” Foton Philippines also made their products available for test drives and user evaluation.

Yes, they played like the big distributors played and every year they would go a step higher by hosting their very own motor show called “The Foton Big Show” where they put on display not just trucks but construction equipment, buses and the likes. In the last three or four years they have pushed the envelope by going beyond trucks and competing directly with Japanese and European brands by presenting the Foton Thunder Pick-up, the View Traveller van that has become popular for families that love to travel in style. For the more practical commuters Foton came out with the View TransVan that operators use for commuter businesses. For small business in need of transport, Foton brought in the Gratour that’s perfect for small deliveries especially in urban settings.

In the last Foton Big Show, they launched an eye-catching luxury “Mini Bus” called the Toano as well as clear challenger for the SUV market called the “Top Lander.” In terms of strategy, Foton has copied the play of the Big Boys but they don’t openly compete or come into conflict with them by trying to grab specific markets. Why choose a knife fight inside a drum when the countryside is at your disposal. To do this Foton developed 24 dealerships all over the Philippines from Isabela in the north to Zamboanga down south.

Aside from having the right products at the right place or market, Foton also did right by pricing their products appropriately. Given their much lower cost to manufacture vehicles, Foton has the advantage to peg prices that are 20 percent lower than most competitors. With the right prices in place, the Foton Philippines team worked on getting acceptance and accreditation from most major banks and financial institutions since 90 percent of buyers reportedly go through financing or leasing.

Without missing a beat, Foton Philippines turned their sights on having an assembly plant and in 2013 they acquired 11 hectares inside the Clark Industrial Complex where they invested P1.2 billion to set up an assembly line with a annual capacity of 12,000 units, employing 500 employees and will break ground this Friday Feb. 12.

Follow the leader until you yourself become one. Congratulations Foton Philippines.

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