inside the translation industry 2016

GAJAH ANNUAL REPORT 2015 | 1

Inside the Translation

Industry 2016Rafaella Athanasiadi

Richard Brooks

K International

May 2016

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“If you need a friend, get a dog.” 

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Being a dick is optional

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A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.

Commodity Good?

from Investopedia.com

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Is translation a commodity?

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No it bloody isn’t.But some of us sell it on price, so it feels like price is the only differentiator (a bit like a commodity).

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Differentiate – Don’t Discount“The truth is that if you are in an overcrowded market where you don’t stand out, all lowering prices will achieve is to erode your margins. Unless your business has lower costs than EVERYONE else’s, discounting is a losing game.

There is an alternative – successful differentiation.

If you can’t come up with something genuinely different and superior, nothing else will save you”

- Alastair Dryburgh. Management Today. December 2012, P16.

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Your ProductPotential Customer Awesome person who can do amazing things.

+ =

This isn’t what you sell This is

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Nurture ClientExpand BusinessSeek New Opportunities

Core

NuisanceGive Low AttentionLose Without Pain

ExploitableDrive Premium PriceSeek Short Term Adv.Risk Losing Customer

VALUE OF BUSINESS

ATTRACTIVENESS

Development Cosset Client

Defend VigorouslyHigh Level of ServiceHigh Responsiveness

Only 1% of suppliers are here, bad news. When you’re here you can charge 15% more, good news.

Used by the vast majority of buying directors.

Supplier preferencing matrix | Kraljic 1983 HBR

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Pretium = PricePretium = ValueThe thinking in 10 B.C.

Price = ValueThe problem in 2016 A.D.

Price ≠ Value

Pretium

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… 4G is “the communications equivalent of the change the jet engine made over steam”

>>> Inability to monetise value creation

Olaf Swantee, CEO EE

3G1GB£31

4G1GB£26

When Value > Price

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Becky Williams M&S Apology

When Price > Value

>>> lack of understanding of an emotive reaction to a small price change

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• The last time you met an Accoutant? • The last time you met someone from

procurement (or vendor management?• The last time you met someone from the

pricing department?

Rich ponders…

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Of all the 7 Ps Price has the single most immediate effect on

the bottom line. (hint hint… would make a nice tweet)

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“the single most

important decision in

evaluating a business is

pricing power”

“if you’ve got the power

to raise prices without

losing business to a

competitor, you’ve got a

good business. And if you

have a prayer session

before raising the price by

10% you have a terrible

business”

- Warren Buffet/MIT 2011

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What does a 2% rise in price do to your

profits?

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P&L #1

Income £100 000

Cost of Sales

-£50 000

Gross Profit £50 000

Overheads -£40 000

PBIT £10 000

Interest -£5 000

Tax -£1 000

Profit £4 000

P&L #2 (2% increase in price)

Income £102 000

Cost of Sales

-£50 000

Gross Profit £52 000

Overheads -£40 000

PBIT £12 000

Interest -£5 000

Tax -£1 400

Profit £5 600

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2% rise in price =40% Increase in profits

All other things being equal (tax calculated at 20%)

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The butter costs more than the corn and the paper bag/cup it comes in costs more than both

together.

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Created shareholder value by forecasting revenue streams.

Move from providing a product to a bespoke service.

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“… a unique mix of attributes that companies provide through their products, interactions, ethos and pricing to create loyalty and satisfaction in targeted customer segments.

It is the unique set of benefits a business offers its target customers.”

- P Kotler

Value Proposition

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Value = Benefits - Cost

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Add Value…Think how the impact, capability and cost change as you increase the complexity of your product/service to have a larger impact on your customer. Increasing (and demonstrating) value as you go.

… and extract some of it

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P&G paid $57 Billion for Gillette (in 2005) but they only acquired $6 Billion of tangible assets*.

*David Haigh, Brand Finance, Marketing Magazine, 1st April 2005

£4.98/Ltr

£2.47/Ltr

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•Better price•Higher sales•Lower prices •Better terms•Higher Search Engine Results•More partners•Better retention •Lower salary expectations•Better qualified candidates•Higher PE ratio•Lower volatility•Lower borrowing costs

In other words… Revenues upCosts downRisks downProductivity up

What does a Brand give you? Its way more than your logo…

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If you put lipstick on a gorilla you’ll still have to kiss it.

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http://hackthesystem.com/blog/why-i-hired-a-girl-on-craigslist-to-slap-me-in-the-face-and-why-it-quadrupled-my-productivity/

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Richard Brooksuk.linkedin.com/in/richardbrooks

twitter.com/@RichardMBrooks

plus.google.com/+RichardBrooks_L10N

0044 1908 557900Richard.Brooks@k-international.comwww.k-international.com

Look after yourselves. All the best for your studies.Talk to me anytime about anything.