Entering International Markets

1
Entering International Markets

• Or so? You want to go global, huh?

2
Starting Point for Going Global

• It all starts with where you are

3
So why go global

• To increase market size and extend product life
  cycle
• To enhance your return on invested capital
• To reach economies of scale in domestic markets
  by selling globally
• To enhance location advantages for suppliers or
  customers

4
So how do you go global?

• Exporting
• Strategic Alliances
• Licensing/Franchising
• Acquisitions
• New Wholly Owned Subsidiary

5
And what do get by going global?

• Neat places to have meetings
• Actually the returns on investments are quite
  good, better than the track record for
  diversifications domestically.
• Exposure to risks you never knew existed
• Political
• Economic

6
Corporate Level Strategies

• Multidomesticeach country is independent unit
• Global Strategythere is one product or service
  regardless of the location
• Transnationalthink globally but act locally

7
Exercise on Exporting

• Get into groups of 3-4 people
• Define the product you wish to export
• Outline an exporting plan which includes
• Product
• How you plan to export the product
• What are the potential issues involved
• What assistance can you seek
• Metrics you will use to measure performance

8
Options for Exporting (Stage 1)

• Passively filling orders
• Sell to domestic agents for foreign buyers
• Export indirectly through intermediaries
• EMC
• ETC
• Trade Consultants
• Export Directly

9
Potential Issues

• Product readiness what and why would customers
  want to buy your product?
• Company readiness are there change agents
  internally and externally to support decision to
  go global? (managers, demand, competitors,
  distribution partners, banks, professionals,
  others?)
• Company capabilities people, production,training,
  finances, etc.

10
What help is available?

• Export Management Companies
• As Distributors
• As Agents
• Trading Companies
• Can do it allimporting, exporting,
  countertrading, investing, manufacturing
• Or just be an agent
• U.S. Export Trading Act
• SBDC, Commerce, State Agencies

11
Options for Exporting (Stage 2)

• Licensing use of licensors intellectual
  property (patents, trademarks, technology or
  process skills)
• Franchising granting of right to do business in
  a prescribed manner to an independent entity, the
  franchisee.
• Manufacturer-retailer (cars)
• Manufacturer-wholesaler (soft drinks)
• Service firm-retailer (lodging, fast food)

12
Metrics? (Or how do you measure success?)

• ROE
• ROI
• Sales
• Market Share
• Payback period
• Per Unit Costs

13
Exporting a Service

• Types of Services for Exporting
• Financial services
• Engineering
• Computer/data
• Legal
• Accounting
• Education
• Consulting
• Entertainment

14
Drivers of Global Service Exporting

• Growth of service sector in U.S. and abroad
• Changes in business environment
• Technology innovations
• Reduction in government regulations
• Growth of international trade organizations

15
Exercise on global services

• Do the same outline on exporting service rather
  than product
• What are some of the similarities?
• What are some of the differences?

16
Terms to Know

• LicensorLicensee
• FranchisorFranchisee
• Product Driven/Market Driven
• Source Country/Receiving Country
• EMC/ETC