The Sanet Hedging Strategy for Direct Investments in Asia

Develloped by experienced enterpreneurs of the Sanet Network

The Sanet strategy for doing business in Asia is based on risk mitigation. That is why we call it a „Hedging“ Strategy. The procedural method is focussed manly on Small and Medium Enterprises (SMI) , which plan to relocate their production to Asia, and also to expand their sales and distribution towards those growing markets. A detailed description of the Sanet Hedging Strategy may be found in the reference book "Asia for SMI - strategies without illusions, published in 2007 by German OLZOG-Verlag in Munich/Germany. All English speaking interested parties are invited to ask for a presentation of the strategy by our English speaking network partners sending a mail to info@sanet.eu or to one of our offices.

The bearing principles of the Sanet Hedging-Strategy are:

  • Increasing financial risks and costs step by step following the growing knowledge and capability to judge the chances of success throughout the project work.
  • Spreading  the risk on two different regions and markets in Asia, and at the same time seizing the chances of both chosen areas. 
These are the measures to implement the strategy
  • Painstaking internal preparation including a „fitness test“ of the company resources and organizational skills.
  • Developing the strategy  in self-contained single steps, fixing distinct targets for each step.
  • Defining clearly the Exit-Points.
  • Continuing intelligence and permanent improvement of knowledge through „Scouting“ and constant research activities.
  • Keeping regional options, decissons about the final location as well as the legal form of the investment open or flexible as long as p ossible.
  • Avoiding fixed and long binding costs and investments; keep both flexible and tied to the obvious sustainability of the success.
  • Ascertained measures of risk provisioning and risk management. 
 
 
Step by Step to Prosperity
 
This is how a typical project managed by Sanet project managers will take place. Each of the steps ends with a result checking and includes the option of an adjustment of the strategy or even an exit. 
 
Step 1: Desk-Top Research
  •     Establishing customer profile and economic project target
  •   Testing of project prospects through Internet, Chambers of Commerce
           telephonic data gathering
  •    Identification of comparable projects.

Step 2: Feasibility Study and “Long List” 
  •   Establishing partner profile for alliance
  •  Setting up of criteria catalogue with evaluation
  •  Analysis of project‘s regional options
  •  Technical and legal feasibility
  •  Assessment of economic subsidy programmes
  •  Development of a “Long List“ of prospects
  •  Creation and mailing of a “Teaser“ 
Step 3: Selection of Partners and Preliminary Negotiation
  •   Direct contact with interested partners  
  • Audit and appraisal of potential partners
  • Audit and appraisal of potential partners
  • Audit and appraisal of potential partners
  • Audit and appraisal of potential partners
  • Audit and appraisal of potential partners
  •   Fact – Book illustrating options and proposal
  • Acquiring confidentiality statement
  •   Arrangement of first contacts and discussions 
Step 4: Planning and Contract 
  • Definition of anticipated partners and „Letter of Intent“
  • Assessment of reciprocal performance of co-operation
  • Cultural due diligence of potential partners
  • Setting up of business plan and profitability calculation
  • Setting up of project and time schedule, investment budget 
    Preliminary Discussions with authorities and banks
  • Conclusion of contract 
Step 5: The Implementation, tailor-made to customer requirements 
  •  Acceptance of specific responsibility for individual implementation
     m     easures up to interim management
  •  Project monitoring, reporting and trouble shooting
  •  Assistance in personnel procurement
  •  Supervise the task of our partners
  •  Mediation in cases of conflict with venture partner
  •  Project related PR – involvement