Moscow FASIE Success Story

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Grantee Profiles

A Eurasia Foundation Grantee Profile

Experts and Consultants Intergroup:
Consulting firm increases effectiveness of innovative, technology-based firms

By Carolina San Martin, Public Relations Coordinator,
Moscow Regional Office

"When the Experts and Consultants Intergroup consulting firm first approached me and offered their services, I didn’t want to have anything to do with them," explains Lyubov Bratkova, president of the Moscow-based firm Ranita Ltd. "Usually the clients end up teaching the consultants, and not the other way around."

Having been state-subsidized during the Soviet era, the science and technology sector in Russia has had to reinvent itself in recent years. This has been a major challenge for the sector as a whole, which generally lacks market culture and the professional business skills needed to succeed. In 1997, the Eurasia Foundation joined forces with the Russian Fund for Assistance to Small Innovative Enterprises (FASIE) to help Russian consulting firms specializing in science and technology increase the quantity and quality of their services to small, innovative enterprises. As a result of the EF-FASIE competition, 14 consulting agencies received grants totaling $317,500. Experts and Consultants Intergroup was one of them.

Thanks to the grant, Intergroup received training, equipment, and the chance to prove themselves on the consulting services market. "Our strategy is based on identifying champion firms—small, innovative businesses that have a good product, but that are at an early stage of organizational development," says Giorgy Cheremisin (photo above), president of Intergroup. Ranita Ltd., which researches and produces light-transforming agrofilms for use in building greenhouses, fit this description perfectly.

When Cheremisin first met Bratkova, her company already had established partnerships with foreign companies in South Korea, China, and Europe. But he knew that the company’s potential was much greater, and he helped Bratkova to see this as well. Intergroup consultants began by conducting a thorough analysis of the company, assessing its strengths and weaknesses. The study revealed that Ranita’s weakest departments were sales and marketing. Intergroup worked with Ranita to develop a new sales strategy whereby Ranita identified a few dependable distributors and worked exclusively within this network of buyers.

Bratkova found the task of improving her company’s marketing strategy to be especially intimidating. A preliminary analysis of the firm’s audience showed that advertising its product on the Internet would be most effective, but Ranita staff did not know where to begin. Cheremisin and his staff took on the web project and worked with Ranita to create the company’s site.

Sales jumped almost immediately as a result of the new strategy and the Internet site. "Ranita works ten times more effectively than it did a year ago," says Cheremisin. And the work accomplished with Intergroup’s help ensured the survival—and the success—of Ranita despite the August 1998 financial crisis. Thanks to the web site alone, which was launched in April 1999, orders increased by 25%. "And we thought that after the crisis sales would fall by half!" exclaims Bratkova. Certainly the firm’s most impressive achievement has been the venture capital investment of more than $10 million that it secured from Merrill Lynch with Intergroup’s negotiation help.

A large part of Ranita’s success is due to the credibility it has gained in the past year. Not only does the web site include information covering Ranita and its product, but it also provides a listing of the firm’s partners with links to their web sites. "When people see that companies like Bayer can vouch for the quality of our products, then they know they can trust us," says Bratkova.

As proud as he is of his client’s success, Cheremisin is also proud of how his own company, Intergroup, has utilized the grant project. "Of course, not everyone trusted us when we offered free services," explains Cheremisin, "but we quickly showed our clients that we never economize on professionalism, no matter how much or how little the services cost."

The grant gave Intergroup the chance to prove themselves on the consulting services market, and that they did: The firm’s client base has increased from 17 to 25 companies. In addition, Intergroup’s efforts have helped create 20 new jobs and attract over $10 million in investments during the grant period alone. Intergroup has also contributed to the development of the consulting sector as a whole by launching a web-based electronic bulletin, Technology Business, which includes articles on the science and technology sector in Russia, business management and investment allocation, legal issues, and other topics related to the business technology sector.

Ranita and Intergroup will continue to help each another grow and benefit from their achievements. "We’re a living alliance," says Bratkova. "It’s difficult to say who is happier about our success—I can’t imagine working without Intergroup." The coming year, affirms Cheremisin, will be more challenging—yet also more interesting. Intergroup plans to assist Ranita continue its market research, attain quality certification for its products, establish better internal controls, and attract further investment from partners both in Russia and abroad. "We’re entering a new stage," explains Cheremisin. "Our companies know each other well, and the challenges ahead are exciting." The task is not daunting—Bratkova and Cheremisin agree that, working together, they are sure to succeed.

November 1999