What Does The Rise of Manufacturing in ASEAN Mean for Multinationals?

While the rise of Southeast Asia has been discussed widely over the past few years due to its strong consumption demand, the production aspects of the region remain relatively unexplored with many companies not having examined ASEAN’s manufacturing capabilities, its ability to achieve economic integration, and the comparative strengths of the individual members as production units. FSG’s research shows that manufacturing is likely to play a significant role in ASEAN for years to come

The Rise of Manufacturing in ASEAN

Southeast Asia has experienced a strong CAGR of 5.5% in terms of its manufacturing output over the last decade and is now responsible for almost 4% of the global manufacturing output. This growth has been funded both by domestic companies as well as foreign investors; ASEAN surpassed China in terms of the FDI inflow in 2013 and the manufacturing sector received a large chunk of the funds. In fact, more than 30% of all FDI that has flown into ASEAN between 2005 and 2010 (see pie-cart below) has been towards manufacturing, and the sector is likely to continue to be one of the biggest beneficiaries of the growing interest from foreign investors. The major reasons for this drive in investments can be summarized through the ASEAN’s four C’s: Consumption (growth), Cost (low), Commodities (abundant), and Community (single ASEAN trade bloc)

ASEAN 1

However, even though the majority of the ASEAN countries have moved out of the agrarian state and have seen this growth in manufacturing, many are still in the early industrialization phases; meaning that the manufacturing sector is going to continue to see strong growth over the next 10 to 20 years (see graphic on the evolution of countries below) and will play a significant role in the development of the region

ASEAN 2

Assess the Direct Impact of the Rise of Manufacturing

  1. Serving the market: As costs rise elsewhere and the addressable market becomes larger in ASEAN, companies should explore the viability of moving production to the region using a “total factor performance” analysis. It is important to make sure that the analysis looks beyond the simple math of labor-cost and considers total factor performance (labor, transport, leadership, material, components, energy, and capital)
  2. Business customers (B2B) movement: Companies serving other manufacturing and production types of businesses should be assessing what types of industries are likely to invest heavily into Southeast Asia and which are not likely to consider moving beyond China

Gauge the Spillover Effects from the Rise of Manufacturing

  1. Productivity impact: The rise of manufacturing is going to positively impact productivity within the region, which has not seen a large improvement over the past decade. Manufacturing makes outsized contributions to trade, research and development (R&D), and productivity. The sector generates 70% of exports in major manufacturing economies, both advanced and emerging, and up to 90% of business R&D spending. Such productivity growth provides additional benefits, including considerable consumer surplus
  2. Rise in consumption will impact all industries: As the less industrialized countries of Indonesia, Vietnam, the Philippines, Myanmar, and Cambodia move from agrarian societies to manufacturing ones, companies should expect consumption dynamics to evolve. As people move from the less predictable farming sector to the fixed-wage manufacturing sector, they tend to experience strong income growth, increasing their capacity to consume. Even companies not exploring manufacturing opportunities in the region need to be monitoring this trend

Establish a Strategic Role for the ASEAN Region in Your APAC Portfolio

  1. Evaluate a “China Plus” strategy- China’s rise to manufacturing prominence over the past two decades has been staggering. However, rising costs, more sophisticated consumers, and fundamental macroeconomic realities mean that current approaches to manufacturing are losing their relevance. As the imperative for companies in China will be to boost productivity, refine product-development approaches, and tame supply-chain complexity, ASEAN has appeared on the horizon as a viable alternative for companies looking to expand their manufacturing footprint into relatively lower-cost locations. ASEAN countries provide cheaper labor, investor-friendly governments, and are part of established supply chains
  2. Compare the competitiveness of ASEAN (to China and India) – China is unlikely to lose its dominant position as the “factory of the world” anytime soon because of its well-established infrastructure, existing manufacturing facilities, ability to scale quickly, and strong involvement in established global supply chains. However, certain low value-added industries are likely to consider moving out of the country or at least setting up their next facility in Southeast Asia, where the cost of labor can be less than half of that in coastal China. ASEAN countries provide access to several raw materials, and certain locations have strong linkages to trade infrastructure
  3. Explore ASEAN’s complementarity to China- ASEAN countries are also likely to be playing a complementary role to China within several industries that depend on Asia for producing parts and final assembly. Given China’s established role as one of the most productive assembly locations in the world, due to its ability to scale quickly and availability of infrastructure, many companies produce their parts and components in cost-effective locations within the ASEAN region, conduct the final assembly in China, and then have the finished product shipped to the end customer. The ASEAN-China free trade agreement has helped companies create such fragmented supply chains

In FSG’s latest report on the region, titled ‘ASEAN’s Role in Manufacturing’, (a) we explore the rise of ASEAN as a manufacturing hub, (b) diagnose the viability of movement of different types of industries into Southeast Asian countries, (c) conduct a location analysis of the various manufacturing sites in ASEAN, and (d) decipher the impact of the ASEAN Economic Community on manufacturing decisions. FSG clients may click here to see the full report

Capitalize on the Evolving Channel Landscape in China

Life is getting more difficult for foreign companies in China because of growing Chinese local competition and invasive government policies that obscure the regulatory environment. MNCs which wish to stay for the long-run will have to adapt their channel strategies to this changing environment. China is set to undergo significant changes, and a few new channel models have already surfaced at a rapid pace and have been adopted quite well by a few leading Chinese companies. Multinationals should be aware of those trends and be prepared to revisit China’s go-to-market strategy a minimum of every two years to stay ahead of the competition.

FSG has summarized three key channel trends to help companies better understand the local nuances and capitalize on the evolving distribution landscape in China:

1. Channel disintermediation

The key issue affecting the Chinese distribution landscape is the fragmented nature of the market. As a result of this high fragmentation, goods move through several layers of distributors before reaching the end customer, thereby creating inefficiencies, high distribution costs, and an intensified frequency of channel conflicts (or Chinese Buzz word, “窜货” pronounced ‘cuan huo’). It has now reached a tipping point, where companies across industries are realizing the importance of developing their own sales and distribution arms. They are choosing to remove intermediaries and cut out middlemen to have better market access, or to just go direct in tier 1 cities.

2. Rise of e-commerce in lower-tier cities

Everyone understands the opportunities that China’s e-commerce market provides, as it has overtaken the United States as the world’s largest market. However, not all companies fully comprehend how to utilize the online channel, especially to penetrate into lower-tier cities. The effectiveness of the online channel is more pronounced in less-developed tier 3 and 4 cities. According to the statistics, the online channel in lower tier cities leads to incremental consumption instead of just replacing the offline spending. MNCs across the B2B or B2C landscape need to start building an effective e-commerce game plan to leverage this channel effectively. FSG has in-depth resources to provide its clients a strong starting point in this regard.

3. Distribution consolidation

Government policies laid out in China’s 12th five-year plan call for consolidation of distributors. In some industries, such as pharmaceuticals and automobiles, numerous acquisitions have already taken place. A few leading distributor groups are expected to benefit from expansion and acquisition policies, while manufacturers (including MNCs) might be negatively affected, because their wallet share in their distributors’ business portfolio will be diluted.

Channel Models in China

*Source: Frontier Strategy Group analysis

FSG is hosting a detailed session on effective distribution management for its clients on April 15 in Shanghai.

The Philippines – Asia’s Cinderella Story

Everyone loves a Cinderella Story, a situation in which a competitor emerges out of nowhere to achieve great success.  So it’s not surprising to see so many people rooting for the Philippines lately.  After expanding on average by 3.8% per annum from 1990–2010, the country’s economy has ramped up its growth to more than 6% in recent years.  The so-called “Sick Man of Asia” is now the top performer in the region ex-China.  Its stock market is up, its currency is strong, and FDI is beginning to flow.  Some companies looking to diversify away from China are even starting to consider it as an option.

Even so, doubts linger over the sustainability of the Philippines’ growth spurt.  Indeed, this uncertainty was on full display at a Euromoney conference in Manila that I recently had the pleasure of attending.  Although the president gave a rousing speech outlining the country’s progress and the finance minister gave calm assurances that the economy was on stable footing, the same questions kept coming up – What will happen after the 2016 election?  Will the next administration continue the current administration’s policies?  What assurances can you give us?

These questions are critical because in the past, interpretation of laws in the Philippines has changed from one administration to the next. So even if a law or contract was well-written, the way it was interpreted and enforced could change dramatically every six years.  Aside from concerns about corruption – which are also tied to this dynamic – this is one of the biggest reasons the Philippines has had such trouble attracting foreign capital.

Unfortunately, it seems that investors’ questions about policy continuity will remain unanswered for now.  Noynoy Aquino has not anointed a successor, and nobody seems ready to fill his shoes.  The current frontrunner for the next election, Binay, enjoys popular support, but it is not at all clear that he is committed to continuing Aquino’s policies.  And many of the other people who have been cited as potential contenders are old-school Filipino politicians – exactly what the country doesn’t need now.

And so the Cinderella Story continues.  Will the Philippines be able to sustain its growth?  Will the “Sick Man of Asia” break away from his past and continue sprinting ahead?  We’re looking forward to examining these questions and more in our upcoming reports on the Philippines.

A Quick Guide to India’s Upcoming General Elections

The general elections of 2014 might be one of India’s most highly anticipated political events of recent times where many expect a large shift in power after experiencing a decade of dominance by the Congress Party led UPA coalition. The elections bring with them a high level of ambiguity; what type of a coalition are we going to see at the center? Will BJP be able to achieve a landslide victory as has been predicted by majority of the opinion polls? Which political party is truly committed to reforms that will support the growth of the private sector and revive investment?

FSG breaks down its views for the elections into three simple phases: Pre-, during-, and post-elections:

1. Pre-Election: Companies’ Q1–Q2 Revenue Figures Should Benefit from Tax Cuts and Subsidies:

  • Tax cuts -> Targeted at middle-class voters
    • Companies in the B2C space should experience stronger top-line growth, as the government is using all the cash left in the current budget to please consumers before elections by reducing consumption taxes on several big-ticket items
  • Subsidies and pensions -> Targeted at the “common” man
    • Catering to the average voter, both urban and rural, the government has increased its energy subsidies by raising the cap on the number of subsidized gas cylinders supplied to households each year to 12 from nine
    • Targeting another large voting group that comprises roughly 2.4 million people, the government changed its policy on pensions for retired soldiers; it will provide the same benefits for soldiers of the same rank and length of service, regardless of when they retire. Currently, pensioners who retired before 2006 receive less
  • Speeding up project clearances -> Targeted at investor community
    • In a final attempt to revive investor confidence, the Cabinet Committee on Investment, a body set up to speed up investment projects, claims to have cleared 296 projects (private and public) worth an estimated US$ 106 billion

2.  During Elections: Companies Should Take the Results from Opinion Polls with a Grain of Salt 

  • Continent Worth of Voters
    • Difficult to have a sample size to represent opinions of such a large and diverse audience

Indias electorate

  • Pluralist System: Disconnect Between Votes and Seats
    • India uses the first-past-the-post electoral system, which declares the candidate with the most votes from each constituency the winner; there is no need for a majority
    • This causes a disconnect between the popularity of a party and the actual seats it wins in an election; therefore, parties try to be strategic by maximizing the seat-to-vote ratio

3. Post-Elections: Avoid the Financial-Market Hype; True Economic Reforms Only Possible by Q3–Q4 2014

  • Avoid the Hype: General elections in India are always a time of volatility because of the economic significance associated with the policies that a new government brings. Companies should not read too much into market movements that take place during this uncertain time; the past six general elections have brought stock market and currency fluctuations
  • Remain realistic about the policy change timeline: MNCs should not expect any major policy changes or turnaround on economic growth before the new budget is announced in July 2014 (the earliest possible). The impact of any potential reforms would only be felt in Q4 2014, assuming the government is able to pass changes in the parliament session between July and September 2014

indias timeline of elections

 

Manage Talent in India More Effectively: Pay More Attention to Local Nuances

Effectively managing talent in India is a challenge that has perpetually concerned executives of multinational and Indian companies; the country suffers from extremely high levels of attrition, lacks the supply of top quality talent, and has witnessed double-digit annualized wage growth for over a decade.

Unfortunately, not only is the situation unlikely to improve in the short run, but executives of multinationals should prepare for an even more challenging market in the short to medium term. India is expected to have one of the highest employee turnovers in the world at 26.9% for 2014. As the country begins to recover from its decade-low growth, retaining top quality talent will become more difficult because employees are presented with more opportunities in the market and many of these opportunities in the market are going to presented by your competition.

FSG believes that companies do understand what they need to achieve in terms of managing their talent but often struggle to achieve results due to implementation of practices that are not relevant to the domestic market, absence of adequate planning ahead of time, and a lack of evidence-based decision-making. As corporate headquarters are going to mandate more focus on profitability, regional HR teams need step-up as strategic partners and implement practices that are able to offer the highest return on investment.

India pic 1

India pic 2

india pic 3

In FSG’s latest report on Effectively Managing Talent in India, we focus on three key areas:

  • Immediate need for effectively managing talent in India
  • Debunking the myths of the domestic talent market
  • Tools and action steps for executive to manage talent more effectively

FSG’s clients can access the full report here

Vietnam’s Structural Slowdown

There was a time when companies could count on Vietnam to post one of Asia’s highest growth rates.  In the years running up to the financial crisis, its economy outpaced ASEAN’s other major economies, consistently expanding by at least 7% per annum.  Sadly, those days seem to be over.

Vietnam is in the latter stages of a structural slowdown.  The continued dominance of state-owned enterprises (SOEs) in the real sector has deprived the country of much-needed productivity gains.  And high levels of non-performing loans (NPLs) in the financial sector have thrown sand in the gears of the economy.  Until these obstacles are removed, Vietnam will grow at well below potential.

Vietnams GDP Growth

Officials in Hanoi have paid lip service to the notion that their state-led model needs adjustment; however, they seem to lack the political will to implement painful reforms.

Take the state sector as an example.  According to Hanoi’s own measures, its SOEs are 19x less efficient with capital and 9.5x less efficient with labor than non-state enterprises.  Vietnam would clearly benefit from a privatization campaign a la late-90’s China.  But unfortunately, that would require officials to face down vested interests, something they seem unwilling to do: after pledging to “equitize” 573 SOEs from 2012–2015, they only managed to “equitize” 13 in 2012 and 43 in 2013.  (56 down, 517 to go….)

This might not be so bad if Hanoi’s reform failures were limited to the state sector.  But unfortunately, they extend to the financial sector, where banks are struggling under an extraordinary weight of NPLs.

In this area, Hanoi’s bureaucrats are actively underplaying the problems they face and pursuing half-hearted reforms.  The path they have chosen – to merge bad banks with good ones and create a pseudo-asset management company – is not designed to fix the financial sector’s underlying problems.  Instead, it is designed to avoid painful initiatives and kick the can down the road.  So much for the country’s banks.

This is not to say that all the news out of Hanoi has been bad.  After all, the government has significantly improved its handling of monetary policy over the last couple of years, which has helped it tame inflation and reduce exchange rate volatility.  This is no small feat in a country that used to suffer from double-digit price growth and consistent currency depreciation, but unfortunately, it won’t been enough to revitalize the economy.

If Vietnam is going to break out of its structural slowdown and return to the growth levels it saw prior to the financial crisis, its leaders need to step up their reform efforts.  Given their recent track record, this seems unlikely.  Barring any major changes, the economy will continue grow well below potential.  Companies should not expect Vietnam to bounce back anytime soon.

India’s Imminent Foreign Exchange Volatility

India is likely to witness further volatility of the rupee in 2014 because of a host of internal and external factors, but the level of movement is going to be significantly lower than what the currency experienced in 2013. Companies should closely monitor the four major trends, outlined below, that will influence the direction in which the Indian rupee will move during the volatile first half of 2014 and create scenarios to ensure local operations are ready for all movements.

The US Federal Reserve’s Tapering of QE3:
While the Fed has decided to continue its quantitative easing for now, improving economic conditions in the United States are going to lead to the end of the program. Expectations are that the program, which is now conducted through a monthly purchase of US$ 75 billion worth of bonds, is to wind down further within the next six months.  In anticipation of the end of bond buying, investors are going to be pulling funds out of emerging markets, causing currency volatility similar to that seen in Q3 2013
.

Current Account Flux:
The massive decline in the current account deficit over the past few months should allow the annual figure to be in a manageable territory between 2–3% of GDP, reducing the level of risk associated with the Indian rupee and calming the nerves of currency speculators.  The recent surge in exports, which rose at a double-digit pace for the fourth month between July and October, bringing in much needed US dollar revenues, should provide further peace of mind to investors. However, demand for oil imports is likely to continue to rise, so any negative movements in global commodity prices will impact the deficit.

Indian Growth Direction:
India’s growth is expected to bottom out by Q4 2013, and the GDP should grow at a faster pace during 2014. Pre-election spending will increase and demand for India’s exports will rise as a result of the West’s recovering economies. Foreign direct investment, a better indication of longer-term investor confidence than stock market investments, has remained robust in 2013 despite slowing growth. FDI increased by 34.7% to US$ 13.6 billion during the first half of 2013 (January–June 2013), mostly due to a rise in M&A activities.  However, 2014 is an election year, and it is going to remain a fragile time for India, because the likelihood of any reforms being passed is low and many investors might wait until Q3 or Q4 of 2014 (post elections) to make investment decisions, reducing US dollar inflow.

Ambiguity of General Elections:
India’s growth is expected to bottom out by Q4 2013, and the GDP should grow at a faster pace during 2014. Pre-election spending will increase and demand for India’s exports will rise as a result of the West’s recovering economies. Foreign direct investment, a better indication of longer-term investor confidence than stock market investments, has remained robust in 2013 despite slowing growth. FDI increased by 34.7% to US$ 13.6 billion during the first half of 2013 (January–June 2013), mostly due to a rise in M&A activities. However, 2014 is an election year, and it is going to remain a fragile time for India, because the likelihood of any reforms being passed is low and many investors might wait until Q3 or Q4 of 2014 (post elections) to make investment decisions, reducing US dollar inflow.

Explore Possible Operational Strategies to Mitigate Impact

Operational strategies that executives could put into place to counter the effects of the currency movements include changing payment terms, structuring option-based contracts, working with a contrarian pricing strategy, and even considering acquisitions. It is key to note that these strategies can be implemented by international and regional leaders with limited support from their treasury.

FSG’s clients can access the full-report on the subject here

 

Decoding China’s Third Plenum Reforms for MNCs

There has been much talk about China’s Third Plenum, and with good reason because China’s Third Plenum is one of most important meetings for Chinese economic and social policy.  Deng Xiaoping, China’s paramount leader following the death of Mao, inaugurated the meetings in 1978 to implement economic reform within China, which effectively opened up China’s economy to increased foreign direct investment (FDI) and laid the foundation for China’s golden 30 years.

Not only is the Third Plenum considered a crucial moment for China because of its global economic impact, it is also the stage for China’s new 5th generation of leadership, Xi Jinping’s administration to unveil a new agenda for key political, economic, and social policies.  These policies will effectively decide China’s growth trajectory over the next 5–10 years, which not only has an obvious impact on China but also the global economy. The Third Plenum comes as China faces unprecedented economic and social challenges from local government debt, shadow banking, and staggering GPD figures. The Chinese government is expected to take the opportunity to address all of these challenges and to plot the course for the coming years.

China's Third Plenum

How will the Third Plenum affect Multinationals doing business in China?

The Third Plenum will certainly affect the competitive landscape within China.  As part of the plenary process, the Chinese government will identify relationships between SOEs, private owned companies, and multinationals. Private enterprises are to obtain more freedom, but SOEs will still remain dominant players in the market. The Chinese government will also emphasize the role of market forces, albeit a double edged sword for multinationals.  Allowing market forces to direct investment will give private domestic companies in China reduced barriers of entry and easier access to capital.

The Chinese government will also deregulate the price for energy which will affect the cost of doing business. Though this will increase the cost of doing business in short-term, the government will also enact interest rate liberalization leading to the lower borrowing cost for companies in the future.  Any company currently doing business in China knows that government engagement is necessary, even if cumbersome.  This will remain the case for MNCs since purchasing decisions will remain consolidated at the central level, including food, drug, healthcare, and construction. MCNs need to consider crafting a centralized government engagement strategy to navigate the political field.

The Plenum will also affect consumer bases, namely those in the early childhood sector can expect a large increase in the consumer base. After the relaxation of one child policy, urban families are allowed to have two children if one of the parents is an only child, which is expected to lead to 2–3 million new babies born each year. Baby-related consumer products, such as in food, diapers, infant milk powder, automotive, toy and clothing industry, will boom in the short term. However, since newly born babies won’t enter the workforce within the next 20 years and parents need to reduce working hours to care for additional babies, a smaller supply of workers will push up labor prices in the middle term.

Lastly, and certainly not least, foreign investors will see significantly lower regulation barriers.  Mixed ownership structures will be allowed and investors will be encouraged to for private sector partnerships in key strategic industries. MNCs will enjoy the improved regulatory transparency and stability for foreign investments in the Shanghai Free Trade Zone. Unfortunately, China will also continue to intensify indigenous innovation, resulting in a “techno-nationalism” and promulgating China’s IP protection, or lack thereof.  China is typically deemed one of the great economic powers of the 21st century, and it seems the Third Plenum is attempting to continue that trend. For further reading on China’s Third Plenum, Frontier Strategy Group clients can click here to access the full report.

Managing the Next Phase of Commercial Effectiveness in India

Historically, commercial tactics in India have either focused on creating hedges to protect from a slowing market or maximizing growth during boom periods. Moving forward, corporate headquarters are increasingly going to mandate a focus on profitability during both the peaks and the troughs. Executives have to accept the level of volatility of the Indian market and implement commercial practices that maximize returns during all phases of the business cycle.

The graph below illustrates India’s volatility over the past two decades, which is why it’s vital to keep these two things in mind:

  1. Preparing for a mature market: Companies that have committed to staying in India for the long run, despite the challenges associated with doing business in the country, should revisit their commercial strategies in order to be more effective during the next phase of execution as the market continues to mature
  2. Handling peaks and troughs: Volatility is not uncommon to India; companies need to accept the level of variance that exists in this country and adopt commercial practices that maximize returns during the peaks and the troughs

Peaks and Troughs in India

In addition to India’s volatility, another challenge in the region is understanding the market dynamics and peculiarities of India.   In order to prepare for the next phase of growth in India, executives need to be constantly analyzing the constants and variables of the marketplace, which will eventually impact the firm’s ability to achieve commercial excellence.   The image below helps to further illustrate this concept, but keep in mind that companies looking to boost their commercial effectiveness need to focus on the specific phase of the commercial process that requires readjustment. Though challenging, this task is not insurmountable.  With the proper methodology and process in place, India will provide great opportunity to MNCs.  FSG breaks down the process into three key phases and provides 10 case studies of firms that are addressing these issues in India most effectively. FSG’s clients can access the full-report here.

Indian Dynamics and Peculiarities

The Time is Now for China R&D

China R&D Banner

The importance of a well-designed China R&D game plan 

As multinational executives consider their China R&D strategy, local companies are already penetrating into their key markets at an astonishing speed.  The time is now for multinationals to take action on their China R&D game plan, whether that means increasing existing R&D capabilities or initiating an entry plan, failure to act now will risk missing out on a tremendous opportunity. Skepticism will always prevail but overcoming that will require thorough and strategic thinking.

Define your R&D strategic goal

Defining a clear goal for your China R&D center is vital for success.  Many MNCs often find their current R&D center is not effective enough to sustain revenue growth, or current operations face challenges related to cost, talent pressure, and regulatory barriers.  This is likely because a clear strategic objective was not properly defined at the very beginning.  FSG proposes four types of objectives that an R&D center can achieve based on your business’ maturity:

  • Market Entry: During market entry, MNCs should consider outsourcing the manufacturing function to China by monetizing cost arbitrage. By establishing a local supplier network, China sites will help MNCs become a cost leader in the global market.
  • Early Stage: As time goes by, headquarters may allocate more responsibilities to China R&D such as developing the full range of project management competencies. R&D centers at this stage will begin to conduct relatively complete modules of the development process rather than just low value added manufacturing.
  • Late Stage: Given that local market is becoming more attractive, China R&D centers may be elevated to develop a local product/brand to cater to the domestic market. Organizations will also evolve from a centralized model to a decentralized model.
  • Established: At the next level, companies can consider expanding their China R&D center to serve similar Asian or even global markets. The benefits are obvious; to improve China R&D centers’ scalability by converting them into global resource integrators.  This upgrade will also help to enhance the bottom line, as revenue is increased by leveraging China R&D center for Asia/global and cost is reduced by consolidating duplicated resources across pan Asia/global wise.

China R and D

Though this framework is not a one-size-fits-all solution it is a great starting point for MNCs needing to enter or ramp-up their R&D efforts in China. FSG has done in-depth research assisting multinational executives to consider deepening their China R&D plans. Eventually, the R&D offices in China can play a larger role, i.e. manage some global product innovations or help in launching products which can be optimally used across Asia.