Case Studies

The Austrian-based regional HQ of an MNC in the IT industry wanted to boost its sales orders in a post-Soviet country in which a regime change had previously taken place when a new president came to power. Although the MNC was assumed to be well established in the market and have a capable sales force in the country, the acquisition of new orders declined steadily. As a first countermeasure, the company’s management decided to increase the budget for sales activities in the respective market, but without tangible results. At the same time, the MNC’s head of sales in the country proposed to enlarge the existing network of distributors with three new players whose business in the country had grown significantly since the regime change. The regional HQ was reluctant to do so, as nothing was known about these companies in terms of reliability and compliance standards.

When L&M PRISK was hired to analyze and solve the problem, we designed a more comprehensive approach. Firstly, we analyzed the market development in general to find out whether the company was in a declining, stagnating or growing market. Secondly, we analyzed the competitors’ investments and sales procedures.

Thirdly, we carried out an in-depth KYC investigation of the reliability, strengths and weaknesses, and compliance records of the MNC’s head of sales in the country and the three potential new distributors. The head of sales has local origins and seemed to be well connected with the relevant decision-making bodies. However, the analysis revealed that he had lost his steady and central connections because of the recent regime change and was trying to reconnect with the respective new elites and businesses. As for the three potential partners, it turned out that they were directly connected to high-ranked ministers and secret service agents. While one of them had a miserable track record regarding reliability and compliance, particularly relating to fraud and shady deals with the Taliban and Iran and circumventing US sanctions, L&M PRISK gave an all-clear for the other two distributors.

Based on these in-depth market insights, L&M PRISK developed and implemented a comprehensive market strategy, including a compliance management system according to the latest international standards. The MNC has since been profiting from the growing market again.