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A strategic take on international expansion

Rigorous market research preceded Stephen George + Partner’s push overseas.

13 July 2017

How should architects go about seeking out new opportunities in overseas markets? For Stephen George + Partners (SGP), it was a decision to set about the exercise ‘scientifically’ based on extensive market research and to act on the results.

With project work established in Oman and parts of Eastern Europe, the exercise successfully spawned Stephen George International (SGI), now one of the largest practices in Bulgaria, though the path taken was not exactly as planned.

Oman Salalah Freezone’s Administrative Complex was the launch project for the practice’s Oman office. CGI © Stephen George International.

At the outset, recalls partner James Nicholls, the practice decided to investigate Central and Eastern Europe and the Middle East and North Africa (MENA) and to bring in an external consultant to undertake its market research as the first stage in a four-step International Commercialisation Plan.

This began with a desk study of market attractiveness based on typical business development considerations: size of national market and economy, stability, market sector forecasts, barriers to entry and accessibility of markets.

The next step was to look at how well served and competitive the markets were for architects’ services and to gauge rewards versus risk.

‘We were looking at emerging markets because we thought that would give us an edge, and to capitalise on our existing strengths,’ says Nicholls. SGP would draw from its track record in masterplanning for large mixed use sites and a leading position in designing for the industrial and logistics sectors.

The exercise resulted in a shortlist of five markets to be examined in greater depth, drawing from further market reports, papers and research studies published by international property consultants. At the same time SGP kept in close contact with UK Trade & Industry (UKTI), participating in trade missions to its two spheres of interest.

The top two target countries that emerged from the research were Romania and Saudi Arabia; yet eventually SGI found themselves not working there but in neighbouring Bulgaria and Oman.

Through a UKTI mission the practice was introduced to British expat Alex Daw, one half of a small practice in Bulgaria that was looking for a larger UK partner. At another event in Oman a client sponsor encouraged them to come and work there.

‘You have to have a partner on the ground in these countries, and you have to meet people you trust and can work with,’ says Nicholls. So while the market data helped gain an understanding of regional opportunity areas, the personal meetings and discussions were key to the decision to partner.

SGP’s efforts paid off: the Sofia office quickly grew to become one of the largest architectural practices in Bulgaria with 35 staff, and now serves as a base for operating in the Balkans, Eastern Europe and further afield. The office has since taken the practice into the original target market of Romania, which is twice the size of Bulgaria.

In Oman the practice has been working primarily in the Salalah Free Zone. Having designed the Administration Headquarters for the Free Zone, which sits adjacent to the port of Salalah, the practice was then asked to bid for the masterplanning commission.

All work for overseas clients is now carried out by SGI, which is operated as a separate limited company with its own board. Nicholls heartily recommends the adoption of the word ‘International’ and says it seems to make a real difference.

The parent practice continues to have business development people in house, and part of their remit is to look at international markets. But Nicholls says if they were to have another big overseas push with in-depth market studies, they would probably do the same again and bring in an external consultant. SGP found theirs through a third party, but Nicholls suggests that UKTI would be as helpful here as they are generally.

Thanks to James Nicholls, partner, Stephen George and Partners LLP.

Text by Neal Morris. This is a ‘Practice News’ post edited by the RIBA Practice team. The team would like to hear your feedback and ideas for Practice News:

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