We live in global market place foreign competitors enter the home market so let’s see if we can take advantage of the trend generating export sales.
Sounds simple! The reality can be quite different more importantly if it’s not done correctly quite easily a potential opportunity turns sour and hits your profitability the opposite of what was intended.
Let’s consider how export opportunities arise:
Scenario One
Your Company has been approached by a potential overseas buyer or agent who’s interested in your products.
Scenario Two
We want to increase the turnover the business because our home market is highly competitive or your market share can’t increase so let’s see what opportunities are to export our products or services
Nothing wrong with a business taking advantage of either scenario but you have to be sure it’s the right thing to do and that you have the necessary skills and resources to analysis the opportunity to make sure that it’s the right business strategy for your company.
So what’s the secret to exporting that’s not easy to answer in one sentence because it’s actually quite a complex issue? If there is a secret it’s too really understand what you letting your business in for and making sure that you fully appreciate the commitment that’s need to make successful. It could be that exporting is not for your company but make that choice by developing knowledge. Here are the issues you need to consider the list is not exhaustive:
Market Opportunity:
How large is the opportunity in units and revenue terms?
What’s the local pricing for my product or service?
What profit levels can be expected?
What’s and who are the competition?
What support is required by local customers?
Do we need have our own people operating in the market?
Could we employ a local agent or distributor?
How do we find a local agent and distributor that we can trust?
What are the support requirements?
Legal Requirements:
Do we need to setup a local company?
What are the local ownership requirements?
Are there any local law on guarantees requirements?
Any need for special insurance?
Are their local legal standards and regulations that our product service needs to meet?
Do are products need to be tested to certify regulatory compliance? How much does it cost and how long does it take?
Do we have to translate all our documentation into local language?
What’s our legal standing in the local market if we need to take legal action?
Getting Paid:
Do we need a local bank account?
Can we repatriate my revenues?
Are there any restrictions on transferring money out of the country?
Are we going to receive payment in local currency or Pounds?
How are we going to cope with currency fluctuations?
What guarantee that we will be paid?
Are there any statuary payment terms in the country?
Who pays for the delivery of the product or services (FOB, CIF etc)?
Do we need a Letter of Credit?
Do we need and can we obtain export guarantee payment insurance?
Will my agent buy off me and stock for sales to local customers?
Case Studies:
These case studies are all large international corporations with the resources available to ensure they didn’t make unnecessary mistakes that would jeopardise their businesses.
(1)Detergent manufacturer try to sell its washing liquid in the UK, it was called “Piss”, obviously meant something quite different in their home language. The product was withdrawn!
(2)Global car manufacturer came up with an “Spanish sounding ” name for one its new cars and launched it to Spanish speaking markets – it translated into something quite offense. The car was renamed at great cost all the TV, press adverting and brochures had to be scrapped and it damaged the brand for years.
(3)Specialised computer hardware and solutions developer of cross border logistics software thought that the European Single Market border arrangements where the same as for NAFTA which they are not. The company was about to sign a lease and invest in manufacturing these systems in Europe before they decided to double check their assumptions which saved them 10’s millions of dollars.
(4)Global telecoms operator expanding internationally wanted to bid for the second cellular network in Germany and didn’t know that Denmark was not part of the Germany.
(5)Global telecoms operator trying to expand in Spain sent a Spanish speaking manager to Spain once a month believing that this was adequate commitment to develop business but didn’t understand the cultural business differences between Spain and their home country.
(6)International business wanted to expand in South East Asia sent a high level executive on a 2 weeks business trip with meetings arranged in the morning and afternoon with local senior management. After 10 days they had only seen one customer. They didn’t understand that time and meetings have different meaning in these markets.
Bottom line seek advice when considering exporting you could lose more than your “shirt” if you get it wrong!! New Mindset can you help you contact Andy for more details either call 01276 537 282 or email andy@andyhamer.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment