Going global is no longer an either/or proposition.

Propelling your business globally could be as simple as setting up a Website to market your goods and services. In the ever-changing and ever-flattening world, in order to compete with your neighbors and competitors going global is no longer an option but a necessity. The world—of both information and goods—moves at a higher speed than it did even five years ago.

PROPELLING YOUR BUSINESS INTO THE GLOBAL MARKETPLACE
By Robbi Hess

10

www.bizstrat.com

In her manifesto “Shaking Things Up. Making Things Happen,” Chicago-based Laurel Delaney, founder and CEO of GlobeTrade.com writes, “In the future, there will be two kinds of enterprises: those that go global and those that die.” Companies should be going global, Bill Graff, director of the Rochester Business Alliance’s International Business Council says. “It makes sense to look at the international opportunities that are out there. If 95 percent of your customers live outside of the United States and if you aren’t catering to them, you are tossing away a large potential customer base.” Delaney says, “After Thomas Friedman’s World Is Flat book came out, it was the first time we’ve really had mainstream America understanding the ramifications of globalization. It’s almost as if you don’t “If 95 percent of your consider reaching out and customers live outside of looking at the world as your marketplace, you won’t be the United States and if competitive. It’s a radically different world now. The you aren’t catering to Internet has exploded and them, you are tossing expanded the opportunities and you should be out there away a large potential hard-charging to gain a footcustomer base.” hold.” As someone who has been – Bill Graff, Director, Rochester in international trade for 13 Business Alliance’s International years, Laurie Ritter, export Business Council manager at Newtex Industries— as well as owner of Export Compliance Council—explains that a company may be content with the market share it has in the United States and associated revenues. “But once a product becomes mature in the U.S. market, going global allows a company to either reposition its product or introduce the same product into new geographical areas. Global trade opens business opportunities, new product development, and new customers.” “Unless you offer a unique, niche product, it’s a necessity to look beyond your own backyard in order to remain competitive,” Ritter adds. At some point someone involved in the same industry as you are will find out how to compete in the global marketplace and will start snatching up your customers, according Delaney. “Today, companies in the U.S. find themselves competing with companies outside of this country for business.”
Business Strategies Magazine | May 2006

Why Go Global?

Take These Factors Into Consideration Before Going Global:
• GET COMPANY COMMITMENT. • DEFINE YOUR BUSINESS PLAN FOR ACCESSING GLOBAL MARKETS. • DETERMINE HOW MUCH YOU CAN AFFORD TO INVEST. • PLAN AT LEAST A TWO-YEAR LEAD-TIME FOR WORLD MARKET PENETRATION. • BUILD A WEBSITE AND IMPLEMENT YOUR INTERNATIONAL PLAN SENSIBLY. • PICK A PRODUCT OR SERVICE TO TAKE OVERSEAS. • CONDUCT MARKET RESEARCH TO IDENTIFY YOUR PRIME TARGET MARKETS. • SEARCH OUT THE DATA YOU NEED TO PREDICT HOW YOUR PRODUCT WILL FARE. • PREPARE YOUR PRODUCT FOR EXPORT. • FIND CROSS-BORDER CUSTOMERS. • ESTABLISH A DIRECT OR INDIRECT METHOD OF EXPORT. • HIRE A GOOD LAWYER, SAVVY BANKER, KNOWLEDGEABLE ACCOUNTING, AND SEASONED TRANSPORT SPECIALIST. • PREPARE PRICING AND DETERMINE LANDED COSTS. • SET UP TERMS, CONDITIONS, AND OTHER FINANCING OPTIONS. • BRUSH UP ON DOCUMENTATION AND EXPORT LICENSING PROCEDURES. • IMPLEMENT AN EXTRAORDINARY AFTER-SALES SERVICE PLAN. • MAKE PERSONAL CONTACT WITH YOUR NEW TARGETS. • INVESTIGATE INTERNATIONAL BUSINESS TRAVEL TIPS. • EXPLORE CROSS-BORDER ALLIANCES AND PARTNERSHIPS. • ENJOY THE JOURNEY.

Delaney Urges Business Owners to

11

While Delaney believes that companies must go global, she also recognizes that some companies may not lend themselves to that level of production. “If you are a mom-and-pop organization making jams and jellies in your kitchen, you could certainly sell a jar or two globally but you might not have the resources, or desire, to compete on a larger scale,” she explains. She adds though, that with e-bay, many individuals are finding it much easier to sell products—whether one jar of jam, homemade items, or other products—on a global scale. “I am a fan of eBay for a small-business person selling their wares but I am not a fan of it being used as a model of going global when it comes to talking about selling a single item to a single customer in a foreign country. True globalization means that an organization is selling a large volume to a wide variety of customers across international borders.” A Website, Delaney says, is the first step in moving a business out of the local market to the international one. After that she suggests checking out governmental resources such as www.buyusa.gov which offers myriad information and tips. “You don’t have to do business in your own backyard,” Delaney states. “The world is your new marketplace. And the technology that we have available to us now is the ramp to launch your business to the next level.” Ritter adds that once Newtex had its Website operational, business “found” them. Before going international, Ritter cautions businesses to research what’s involved and to know their own limitations and restrictions: U.S. export regulations; pricing differences in both cost and currency exchanges; units of measure (kilos vs. pounds, etc.); payment terms, patents, language barriers; customs when visiting or in marketing materials (e.g. the number 4 in China is bad luck); 12

From Here to There

Did You Know?
THERE ARE MORE THAN 230,000 SMALL BUSINESSES EXPORTING IN THE UNITED STATES ALONE. THE NUMBER OF SMALL BUSINESS EXPORTERS ROSE 250% FROM 1987 TO 2001. ABOUT ONE OF EVERY FIVE U.S. FACTORY JOBS DEPENDS ON EXPORTS. EXPORTS MEAN NEW CUSTOMERS AND MORE THAN 95% OF THE WORLD’S CONSUMERS LIVE OUTSIDE THE UNITED STATES. SMALL BUSINESSES WITH FEWER THAN 500 EMPLOYEES EXPORT ROUGHLY 182 USD BILLION ANNUALLY, OR 29% OF ALL EXPORTS.

and dealing with distributors, agents, and direct salesmen are all issues that may have to be addressed when exploring the global arena. Filling a need or finding a niche may be the way to propel a business into the global arena, Graff explains, adding that Web commerce makes sense if you are offering goods or products that are industry-specific.

It’s a matter of products and attitude, Graff says. “We have companies that do a tremendous amount of business overseas—competing globally isn’t contingent on company size. It’s a matter of finding out whether it makes sense for you. Due diligence must be undertaken to understand the potential markets, benefits, and pitfalls before taking your goods to market.” The United States Department of Commerce’s export assistance center in Rochester, Graff says, is an excellent starting point. “They have access to market data that can help you determine if you can compete globally and make it financially viable.” Sometimes people have a shortsighted view and think they can’t compete globally. Graff says that likely isn’t true. “It depends on where you fall on the value chain of price versus cost. Companies need to provide not only low cost but a best value solution.” Are you going to blanket the globe with your products? Are you planning to target specific international markets? Those are questions a business must research as it explores business beyond its borders. “Look at your core competencies and go from there,” he advises. Businesses wanting to go global need to be open to new practices, says Ritter. “Global trade is not textbook in university teaching. In my experience, businesses cannot take for granted the importance of
www.bizstrat.com

Is It For Every Business??

knowing their products and how they relate to Export Administration Regulations (EARs).” Also, she says, alternative payment options may need to be explored. Gone are the days of cash in advance and net 30. “Contract negotiations can take months or years, depending on project size and could involve numerous overseas trips, meetings, and yes, unexpected expenses. Relationship building is important for customer loyalty in overseas markets.” Going global involves importing as well as exporting as global sourcing is used to help lower production costs or source products not available in the U.S.

“The Internet has exploded and expanded the opportunities and you should be out there hard-charging to gain a foothold.”
–Laurel Delaney, Founder and CEO, GlobalTrade.com

Rochester Poised For the
Global Market
Rochester is in a unique position, Graff says. “We are very heavily involved in a community that embraces international business; I think that goes back to Kodak and Xerox. Another shift we’ve seen is that small to mid-sized businesses have made international businesses a significant part of their revenue streams.”
BSM

Business Strategies Magazine | May 2006

13