Transcript Developing Local SME`s and Opportunities for Local Businesses

Sharing Experiences: Enhancing the Benefits to
Communities from Extractive Industry Projects
“Cajamarca: Opportunities for Local SME’s through
Business Rounds”
Oscar Manuel Mendoza
Washington D.C., June 19th, 2006
Contents
Context for the business rounds
The business rounds
Methodology of the business round
The process of the business round
Basic aspects for a good negotiation of SME’s
Résumé of lessons learned
Future challenges
2
Context for the business rounds
Cajamarca GDP Million US$
2500
1990: Three sectors:
2000
Tourism
Milk derivates
Wood
1500
1000
2006: More potential sectors:
500
To export:
0
1990
1995
2000
2004
Cajamarca: Sectorial Contribution to GDP
100%
90%
Mining
Tourist
Agro-industry
Forest – wood
Farming: fruits, vegetables, beans
To national market:
80%
Milk derivates
Tourism
Services
Transport
Construction
Metal workmanship
Aquaculture
70%
60%
50%
40%
30%
20%
10%
0%
1990 1991 1992 1993 1994 1995
Farming
Mining
Industry
1996 1997 1998 1999 2000 2001
Construcction
2002 2003 2004
Services and commerce
3
The business rounds
 Business encounters
 Direct commercial linkage mechanism
 Promotes entrepreneurial
appointments
 Facilitates:
 Public and private sale – demand
linkage
Event
Participants
Amount of
business
US$
Business
Round 2003
64
373 170
Business
Round 2004
124
1 411 300
Business
Round 2005
193
2 211 349
 Face to face entrepreneurial
bargaining
 Contributes to identify market
opportunities
 Disseminates market information at
low transaction costs
4
Methodology for the business
rounds
• Local business registration
Before the business round
• Commercial brochure edition
• Dissemination of information
• Counterparts searching
• Demand – Sale matching
The business round
• Appointment schedule
• Dissemination of information
• Business encounters
After the business round
• Business escorting until
closing
5
The process of the business round
At the beginning:
Identification of local suppliers
Incorporation to the big company’s supply
chain
Development of local services
The business round, now:
Public – private combination effort
Market openness:
Domestic
National
Associativeness
Entrepreneurial days
Workshops and seminars
Identification of new demands:
Focalized market research
Commercial missions
Customer orientation
Present goal:
Development of good suppliers
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Basic aspects for a good negotiation of
SME’s

Appropriate sale – demand

description of the business





Production cycle
Present and future production
capacity
Product description: samples,
brochures, technical profiles
Strengths and differences with its
competition, in quality and processes
Prize policy, according to different
amounts of requirements
Post sale services: warranties,
delivery times, technical support
Flows and distribution: Kind of
transport, fees, packages and packing
7
Résumé of lessons learned
Linkage an small region to national markets, sorting infrastructure limitations
Public – private alliance in order to promote local business
Inter-institutional organizing commission
Standardized methodology:
Manual
Software
Checklist activities
Budgeting process
Auspices
Redefinition and appreciation of entrepreneurial coaching in order to close
business negotiation
Strengthening of suppliers based on:
Information dissemination
Understanding of market rules
Adequate preparation
8
Future challenges
Consolidate the participation of traditional economical sectors in
order to open new market opportunities
Promote:
The participation of farming sale actors, according to the local and
national demands
Brand development and registration, in order to help local business
to expand to national and international markets
Innovation, research and development through patents, industrial
designs, utility models, trademarks, franchises, intellectual property
Support the competitiveness of good suppliers
Emphasize the business people training before the round
Transference of the hole financing aspects to public and private
institutions
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