HOW TO SUCCEED IN A GLOBAL ECONOMY

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HOW TO SUCCEED IN A GLOBAL ECONOMY

• Dr. Charles N. Toftoy

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Small Business Go Global!Percentage of Small
Companies Exporting
Year
Source Arthur Anderson and National Small
Business United Companies with
fewer than 500 employees
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BENEFITS BY DOING GLOBAL BUSINESS

• Offset sales decline in U.S. market
• Increase sales/profits
• Extend products life cycles
• Lower manufacturing costs
• Improve competitive position
• Raise quality levels
• Become more customer-oriented

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INVESTING GLOBALLY

• Can we make money there?
• If so, can we get it out?
• Will we feel comfortable doing business there?

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WHY TRADE?

• Absolute advantage
• Comparative advantage
• Porters Dynamic Diamond
• Balance of trade

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GLOBAL STRATEGIES

• Exporting
• Joint Venture
• Export middlemen
• Countertrading and bartering
• Foreign licensing
• Franchising
• Establishing international locations
• Networking

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GLOBAL NETWORKING

• Distributors, suppliers, customers, other firms
• Advantages
• Gain access to distant markets
• Technology
• Market knowledge
• Keys to success
• Unique product (thwarts local branding)
• Visit distributors/customers often
• Trade shows
• Conduct seminars to educate customers

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BARRIERS TOGLOBAL TRADE

• Domestic Barriers
• Global Barriers
• Cultural Barriers

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EXPERT EXPORT ADVICE

• Investigate standard payment procedures in
  foreign countries. Since letters of credit are
  difficult to arrange, the exporter should
  consider an open account payable in 30 to 60
  days.
• Invoice in U.S. dollars to avoid losses due to
  fluctuations in currency values.
• Make arrangements for local servicing in the
  foreign country to avoid costly transportation
  charges.
• Offer a discount to distributors who offer a
  warranty on the product you sell.
• Assign exporting responsibilities inquiries,
  documents, requirements to one in-house person.

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EXPERT EXPORT ADVICE

• Locate foreign distributors through trade shows
  run by local chambers of commerce, the Department
  of Commerce, and others.
• Work with one exclusive distributor in each
  country, especially when selling a unique
  product.
• Start with a small distributor, since they are
  hungrier and often work harder to build sales
  volume than larger distributors do.
• Since exporting adds little to fixed costs,
  settle for a lower profit margin to get
  established in the market.