Achieving scale in tiny Singapore has long been a challenge for SMEs. Originating in a country with no domestic flights, Singaporean businesses must break out of their home markets at a much earlier stage than their larger-country peers. But acquiring such international chops can be a daunting prospect. In early 2016, AJA Enterprises finds itself wrestling with its own international tech-to-market strategy.
AJA – a blast mitigation solutions company for architectural glass – was initially set up in 1999 as a distributor for silicone sealants and aluminium cladding used in window installations and glass facades on commercial buildings. However, in the cost-sensitive construction business, distributors like AJA are all too often compelled to compete on price. Angela Toh, the founder and director, realised that for her company to be sustainable in the longer term, she would need to innovate and move further up the value-chain with additional services and offerings that differentiated AJA from other distributors.
The increased security demands of the post-9/11 world presented Toh with an opportunity. In 2002 she pivoted the company to become a blast mitigation solutions provider. This led to several successful projects to install blast-resistant treated glass in government buildings, train stations, hotels, and financial institutions in Singapore. However, Toh was well aware that she would need her own unique product offering and brand strategy to truly take off.
In 2009, AJA embarked on the financially risky and lengthy process of developing a proprietary technology, coined the Energy Absorption Mullion (EAM) system. Three years later the company began manufacturing the system for design testing. After a rigorous testing process costing millions of dollars, the system successfully met US quality specifications, the gold standard for blast mitigation certification. The EAM system was then registered under AJA's own Enerzorb trademark.
Enerzorb officially launched at the Interpol World 2015 trade show in Singapore, as a world-class, patented energy absorption blast mitigation system backed by in-depth know-how, rigorous R&D, and compliance with internationally certified performance tests. Now in 2016, Angela and her team are considering possible exit strategies, but first need to demonstrate the viability of Enerzrob beyond Singapore's more saturated market.
There was a sense of urgency. The building security business is highly fragmented, with only two other companies in the world offering a product of comparable quality to AJA. Toh adds, "It's only a matter of time before a conglomerate or a large corporate house will take advantage of their scale and start offering similar products." As the only Asian firm offering blast mitigation systems, Toh believes AJA can secure a regional advantage.
Government and international organisations were obvious customer targets, given their propensity for investing in greater building security, particularly blast mitigation. Capital cities were an obvious beachhead. Toh remarks, "Awareness concerning the importance of blast mitigation is still quite low in Asia. This makes attracting customer interest a huge challenge."
As a niche, value-adding product that can command a premium price, Enerzorb needs to be positioned and marketed accordingly. In terms of expansion, licensing the technology offers more speed, scalability, and affordability than a joint venture or partnership. Whatever option AJA chooses, it is essential for any company to adequately understand the risks inherent in such major business decisions, and how best to manage such risks. There are trade-offs between speed and control, which can have serious implications regarding both failure and success.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
Do you know more about this story? Contact us anonymously through this link.
The Centre for Management Practice is a leading university think-tank at Singapore Management University. The Centre identifies, captures, and disseminates new knowledge based on emerging trends, best practices, and cutting-edge business models operating in Asia's fast-changing and dynamic markets. This is accomplished through academic consulting; as well as the development and publication of case studies, journal articles, and other periodical content.