Belkin Corporation in France

1. Best in France Case Study Belkin Corporation in France Andrea GANDINI Andrei KOTOV Cristina JARRIN SILVA Xiyin CHEN December, 2003

2. Belkin Corporation • Belkin is a privately held company with its headquarters located in Compton, California. • Leading technology company that provides connectivity solutions to the B to B and B to C Computer and Consumer Electronics Market. Industry Leader in B to B E-commerce integration. • Belkin is considered one of the fastest growing privately-held companies in the U.S.A., with wholly owned subsidiaries : Belkin Corporation, Ltd., located in Northampton, United Kingdom, and Belkin Corporation BV in the Netherlands that supports the rest of the European continent.

3. Belkin Corporation • Diverse product offering: USB modular hub systems, KVM switches, surge suppressors, wireless accessories, cabling accessories. • Service offering: Bar coding, turnkey product development, e-commerce integration, just in time management, private labeling and custom molding of cables and enclosures.

4. Belkin Corporation • The company was created in 1983, reaching $ 100,000 of sales. In the year 2002 the company reached sales of $ 460 millions worldwide and projects sales of $ 500 million for the year 2003.

5. Why it came to France • Cautious approach to International Growth. The office was not open until there was a certainty of reaching a critical mass in terms of revenues. • A native French Management was considered a critical success factor for the office operations. • Belgium was also considered to open locations, but France offered better advantages in terms of logistics and coordination. • The French market is an essential strategic point for the development and growth strategy of the company.

6. Why it came to France • Belkin’s French operations were opened in 2000, as a subsidiary of the UK organisation. This office is a purely Sales and Marketing Office, as all logistics and finance are located in the UK. • Belkin opened a Representation Office in France at is a key strategic point to market its products in the area. In fact, Belkin will achieve 14 Million Euros of Sales in France in 2003, with the expectation that the French Region will deliver approx. 80 Million Euros in Revenues by 2008.

7. Company values • Cultural challenge related to work ethics in France, which differed from the American perspective. • The core of the sales strategy of the company had to be changed to fit the French prevalent view. • To instill the company’s values in the French Unit, Belkin created a consulting team of Senior Managers, denominated “Mc Belkin”.

8. Company values Belkin Core Values • The more senior the manager, the more expert on the presentation, implementation, and execution of the model. • We don’t focus on selling products, we focus on providing VALUE to the channel. • Everyone participates because you have to DO IT so you know that it works, and so you speak with passion and authority. • We focus on the most important channel partners and largest opportunities. • We take responsibility for our channel partner’s results. • We become the channel partner’s best supplier. • “No” means nothing to us. • We only look at “sell through”, not “sell to”. • We always have “Sell Through” data on hand. • We benchmark, set expectations, and measure results for all of the elements that deliver VALUE.

9. Company Products • Belkin doesn’t manufacture any of its production in France due to cost issues. • 95% of the products are produced in the Far East. • There are no perspectives in the near future to produce in France, as the company has cost and technology advantages in the Far East and the United States.

10. Company's clients • Clients are classified in four major channels: Retail, Mail Order, Distribution and Value Added Resellers, and Original Equipment Manufacturers. • The major expectation from clients is that Belkin will be a “Subject Matter Expert” in the categories that the companies manufactures and sells. • French presence helps satisfy costumers’ demands as retailers expect regular visits to shops and continuous communication with client’s personnel in French.

11. Constraints in France • The most important constraint was the Legal System, which was perceived as “complicated” by the Senior Management. • Rigid Labor Regulations. • Higher Cost of Employment. • With practice, they also discovered that changing the role of an employee or his or her reporting structure is more difficult in France than in any other of their subsidiaries.

12. Adaptation to France • Adaptation of the company’s Strategy for France: • Having a French base allows them to truly make sure that their products have a chance for success in France. • This includes adapting their Marketing Strategies based on feedback from French colleagues as well as Field Surveys, all the way down to testing the products in the region where they will be sold.

13. Adaptation to France • Creation of the “Pan European Business Development Team”, which aims to adapt the company not only to France, but to all the European Markets in which it operates. • Facilitates the integration of the Managers throughout the region, and allows the share of expertise, know-how and cooperation. • It is a regional adaptation of the company’s policies regarding Management Development, Workforce Planning, Communication Policies, Motivation and Training.

14. Key Constraint Costs • Human Resources costs are higher than any other region that the company operates. • These has been the key constraint experienced as they grow the team in France and the Legal Structure changes. • Costs of dismissals are higher compared to other European locations. • Cost of transportation and traveling in France are increasing. • Communication constraints. It is perceived that the integration of French managers is more difficult. Even though they are fluent speakers they don’t feel comfortable with English.

15. Key Benefits • The presence in France is the most important reason why the company opened its office. • French Clients feel much more comfortable dealing with a company that has a base in France. They believe that is shows commitment to the Region. • The local presence has allowed to significantly increase the customer base. • Responsiveness: • Having the sales people based in France allows to the company to be much more responsive (quick and more efficient) to their customer needs. • Recruitment: • Natural advantages at recruiting in local market: language and knowledge of local market and existing client relationships in France.

16. Essential Advice • “It is very important that the Senior Manager who will run the French operations be inducted into the company values BEFORE he implements the operations” • “It would be wise to have in-house counsel to guide you through the complications of opening and managing an office in France” • “Hire an experienced HR manager BEFORE you hire anyone else – will save a lot of pain down the line” • “Any company opening an office in France will have to do so with an OPEN mind, expecting differences and integration difficulties”

17. We Thank Rohit Nartlehy Pan Euro Relationship Manager Permanent Location: Amsterdam Phone: 316 21 89 68 11 E-mail: rohitn@belkin.com