Tellabs – Is Going Overseas Smart?

Implications: What do you do when your market shows signs of drying up? The answer is; go elsewhere to peddle your wares.

Analysis:  Tellabs has already started moving into overseas markets.  The economy overseas is not any better than it is in the United States.  However, I give their executive team points for doing the right thing.

When companies are having sales problems in their home country the first thing you do is look outside the home country.  Nothing wrong with that approach.  On a go forward basis forward basis for the next 6 quarters, the company needs to do the following:


-    Review the current product line.  Determine what might sell overseas. Determine what product lines need to be focused on for sales and enhancements.
 -    Survey customers in the U.S. to establish a degree of intelligence for the future.  In other words, engage your customer to find out if the depressed economy is the only reason they have cut back purchases.
 -    Develop a sales and marketing plan for overseas.  Tailor all the plans for the countries you are targeting
 -    Hire sales people who know the sales territory and the business customs of the country.  It never hurts having locals represent you; however, you need to have headquarter oversight.
    -    Commit the company to this endeavor.  You cannot launch an overseas sales effort half way.

I believe that Tellabs needs to prepare itself for bad times over seas.  The markets are in trouble there already.  However, that does not mean they should not go overseas.  Tellabs needs to tap other markets but it needs to do it smartly.

My suggestion to investors is make sure Tellabs has its act together before going overseas.  You have a right to ask; it is your money.