Electro-Acoustics Systems (EAS) builds a solid reputation at home before leveraging on good references to penetrate overseas markets. Strict cost control measures ensure that expansion plans are not stalled.

Lam Tong Loy, CEO of EAS, knows a good thing when he sees it. Realising that there was a huge demand for quality electro-communication systems, he founded a company that equips large venues with multimedia systems.

Building A Reputable Company

Lam understood that attracting major clients would strengthen his company’s reputation and in turn, bring in more clients. His persistence paid off when he clinched a contract with the Monetary Authority of Singapore (MAS) within two years of setting up his company.

This led to many other large contracts, including those from Parliament House, the Supreme Court, the Suntec Convention Centre and the Esplanade.

Venturing Into Non-Traditional Markets

Having developed a solid reputation at home, EAS looked overseas to expand its reach and increase its customer base.

In the 1980s, it ventured into Malaysia and Brunei due to proximity and an existing customer network. Soon, Lam realised that he had to penetrate non-traditional markets like China, Taiwan and Hong Kong in order to increase profitability.

Sound Financials

“It’s not easy for an SME to get financial support,” admits Lam. “In the early days, we faced quite a lot of financial restrictions, even though we had the manpower and the management skills."

The company put in place strict cost control measures, such as shipment consolidation, systematic logistics control and fixed payment terms to avoid cash flow problems.

Initially, the payment terms did not go down well with the customers, but ironically, this eventually contributed to the company’s reliable and prudent image. “Reputation is of utmost importance. Customers know we provide quality work and agree to our terms,” Lam says with confidence. “It’s just like buying a Mercedes, you will gladly pay the huge down payment.”

Finding Local Partners

Different strategies were adopted for different locations.

It was easy for EAS to set up offices in neighbouring Malaysia and Brunei and provide support from Singapore. But in places like China where business is done differently, EAS had to find local partners to tap into the local domain knowledge.

As its reputation was solid, EAS had little difficulty finding partners. “We are often approached by overseas companies who express interest in cooperating with us. We normally take about a year to assess them, before formally entering into any partnership,” says Lam. He looks for established companies with the right personnel, a good track record and sound financial backing.

How EAS Ventured Abroad Built up and maintained sterling reputation locally before venturing abroad. Depending on the market, EAS would set up overseas offices on their own or with overseas partners.

Practical Tips Establish strict cost control measures to avoid cash flow problems.