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Thursday, 6 September 2018

Our sit-down with Georg Tacke, CEO of Simon-Kucher & Partners

**#7 When you can see through the EM Zombie Apocalypse to the fundamentals, it’s a great time to invest in Egypt. That’s the take-home message from global consultancy Simon-Kucher & Partners CEO Georg Tacke, who recently gave the green light to the opening of a shop here in Cairo — the firm’s 35th globally. We delved into why the firm launched its Egypt office, its views on the economy, and whether consultancies are eating the lunch of marketing firms. Edited excerpts:

Why Egypt? And why now? It must be said first that we are not new to Egypt, as we’ve been actively serving clients here in various industries for many years. As an expanding global firm, we’ve been eyeing an expansion into Africa for some time. And since a key feature of our strategy wherever we are is local knowhow, and we have a solid and experienced Egypt team, opening an office here was the next logical step. Our office in Cairo will be led by Martin Janzen and Sara Shenouda — two financial services experts who have been spearheading a local team of specialists entrenched in a variety of sectors. The Cairo office has also full access to our global expertise across all industries from San Francisco to Shanghai.

This is an exciting time to be in Egypt. We’ve been following very closely the efforts the government has made to attract foreign investment and financial institutions through its ambitious reform agenda, particularly those reforms that have ensured the free and uninhibited movement of capital.

We see the inflation resulting from these reforms as not only temporary, but an opportunity. The question is, will the Egyptian market be ready when the dust finally settles? Are companies already preparing their products, services, prices, value proposition, business models, digital strategies, and their monetization to respond to this situation? We always tell our customers that there are those who make things happen, there are those who watch things happen, and there are those who wonder what happened.

We’re very excited about the financial services industry, which we see as still in its infancy in terms of its potential to grow. We like what the government is doing with the sector as well, particularly its financial inclusion initiatives and the potential growth of fintech and e-payments. These are all areas where we have much experience and knowledge to share. Our Cairo team is currently focusing on financial services, real estate, and tourism due to the growth potential we see in these industries. We’re also involved in telecommunications and energy, as well as consumer goods and retail. The mid-term plan is of course to cover all relevant industries in Egypt.

Our secret sauce is all about the power of topline: What distinguishes us from other consultancies is our adherence to what we like to call topline power. What we mean by that is essentially doing away with cost-cutting and restructuring, which we see as inherently limited and cumbersome. Instead, the focus is on growth, which is in principle limitless. We show our clients how to achieve it, through winning pricing, marketing, and sales strategies. If a company develops an innovative product or service, for example, we help to find the right price points and to come up with the best possible go-to-market strategy. We develop pragmatic and easy-to-implement solutions for our customers.

I cannot stress enough that we are a revenue-side consultancy. Our customers rely on us for this and we typically refrain from delving into the dreaded cost-cutting, including IT infrastructure development, automation, etc. We also strictly avoid legal advice and services.

And while marketing is a core component of our strategy, we do not see ourselves as a marketing and advertising agency. We are not worried about our industry being squeezed by such agencies. As a matter of fact, we see them as complementary to our business model. When it comes to marketing, Simon-Kucher & Partners helps its clients with the big picture: their segmentation strategies, marketing strategies, new product designs, portfolio optimization, value communication, marketing entry strategies etc. This is a totally different ball game from running ad campaigns, which we often hire out.

Typical challenges facing our customers in Egypt look to us for? First, our clients look to us to help develop the best digitization and online growth strategies catered to their business. They also come to us to help them know their customers better and what products adds value to them through customer segmentation with clear products differentiation and value communication. They also seek our expertise on how to adapt prices and revenue management, especially in the new currency and high inflation environment.

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