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Top 5 Issues Putting Aircraft Parts Suppliers Off Greater Profit

Top 5 Issues Putting Aircraft Parts Suppliers Off Greater Profit

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Published by Locatory
In the nearest future the rapidly evolving regions, such as China, India and Russia are expected to experience the highest demand in aircraft and the MRO markets.
In the nearest future the rapidly evolving regions, such as China, India and Russia are expected to experience the highest demand in aircraft and the MRO markets.

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Published by: Locatory on Oct 25, 2011
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Company code: 302572273VAT code: LT100006029014Smolensko st. 10, LT-03201, Tel. +370 5 252 5500Fax +370 5 252 5501Email: info@locatory.comWebsite: locatory.com JSC „Locatory.com“
25 of October, 2011 // Press release
Top 5 issues putting aircraft parts suppliers off greater profit
In the nearest future the rapidly evolving regions, such as China, India and Russia are expected toexperience the highest demand in aircraft and the MRO markets. However, the Northern American and theWestern European investors are reluctant to expand their businesses to the areas. Such disinclination is based on different business prerequisites, cultural barriers, bureaucratic apparatus, etc. According toLocatory.com experts, the predominant reasons must be the lack of proper market analysis and the negativenotion about the difficulty of organizing business in the growing economies.The aforementioned experts describe the entrance into such markets as a new learning experience ascompanies must find the best ways to adapt to new cultures and navigate their businesses according to new
 
rules and regulations. In the meantime, access to aircraft parts and components’ providers is vital for theemerging markets as the development of the sector itself is directly dependent on aircraft parts’ import andquality standards.After thoroughly examining the situation, Locatory.com listed 5 statements often used by companies whengiving reasons for their reluctance to enter new markets:
1.I do not have clients in these countries and I am unaware of their business ins and outs.
In the last couple of decades the business climate in the emerging markets has changed significantly.Among other things, experts have observed an ongoing shift towards considerably larger business models.Most Chinese, Latin American and African companies operate according to the Western business culture,sometimes Western business models are implemented even faster and in a stricter manner than they are inthe West. Despite some countries still having to deal with various complicated government imposed legalconstraints, in contact with Western suppliers or clients companies tend to make independent decisions andtake full responsibility for sorting out government formalities.
2.
It is juvenile market and we cannot expect to sell anything.
For a very long time now airlines have been operating outside of the USA and Western Europe – relativelyhigh and rapidly growing passenger flows can be observed in Indonesia, Malaysia, China, India, Africa andRussia. Needless to say that all aircraft require technical support and servicing; therefore it would onlymake sense to connect as many markets as possible thus ensuring faster and more cost-effective solutions.The emerging markets have no other option than to collaborate with the Western companies, otherwisefurther expansion and quality services are completely out of question.
3.
New markets complicate the existing logistics systems.
As the American and the Western European countries operate global logistics networks, the regionallogistics services providers can offer express services at highly attractive prices. This way companies donot have to search for new carriers and all customs formalities, i.e. documentation, costs, etc.. are takencare of by the buyer who has local knowledge and experience and is interested in receiving his goods intime, therefore will do anything in his power to make the process as smooth and fast as possible
4.
Payments delay.
Unfortunately, nowadays late payments are becoming more and more common in many different businesssectors. The aviation sector is certainly an exception as most companies adhere to exceptionally high business standards, based on an increasingly important competitive image, especially in emerging markets.
5.Under-the-counter transactions.
The largest aviation companies in the emerging markets are predominantly privatised and do not belong tothe public sector. The private sector is interested in making profits, providing quality services and

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