An international assignment in Kazakhstan.
The Situation.
I was hired by a large Polish company manufacturing chemical products for the building sector, and operating in 19 countries worldwide. They have had a presence in Central Asia for 25 years. During this time, the company has significantly built its position on the Kazakh market, but the years 2013-2018 brought a regular decline in profitability. The company implemented a new strategy worldwide and expected the Kazakh market to adapt to new expectations.
The Task.
There was a need to refresh development activities so that the company could significantly improve its financial efficiency. At the same time, the assignment was to accelerate development by increasing market share, sales volume and profits in Kazakhstan.
The Actions.
In the role of an interim General Manager I worked with the local team to identify new opportunities and prepared a local strategy for growth continuation based on the new strategic directions from the Group. The team focused on:
Identifying portfolio priorities in a wide range of assortments,
Significantly developing marketing activities, aiming to encourage new End Users (Professionals) to use innovative products,
Revisiting the pricing strategy to increase margin and make the sales force focus on the most innovative and profitable products,
Developing Sales Excellence to increase the efficiency of salespeople in everyday work.
The Results.
Despite COVID in the period 2020-2021 and political turbulence in 2022 the company managed to double the sales volume in 2023 as compared to 2018. The profitability increased from neutral numbers to almost 2 million Euro in operational profit.
Although the company already had been the market leader in the majority of products we managed to further increase our market shares (for some categories even to 120% of initial shares), in some categories reaching even 50% of the market. Our sales grew twice faster than the overall building market.
Key challenges in terms of cultural differences.
Implementing a project in Kazakhstan and Central Asia requires adapting to the local specifics of the team, which may be a multinational team. We may encounter Kazakhs, Russians, Koreans or Germans among the employees.
Key challenges in the project may be related to the fact that:
religious differences may lead to possible misunderstandings between team members, especially men and women (in Islam, men are in a stronger position than women)
within the Central Asian culture, less attention is paid to the implementation of tasks within agreed deadlines,
there are situations when participants in negotiations agree to the implementation of some tasks and then do not implement them,
personal relationships, especially family ties, play a huge role for local owners, managers and employees.
in order to maintain the pace of work, it is advisable to monitor the progress of work among team members as closely as possible.
At the same time, it should be noted that local project teams are very interested in new features and concepts, improving their competences and acquiring new managerial knowledge along European standards. All this creates promising prospects for implementing new projects and developing business.