WHY EXPORTING IS REAL? LARGERNET, LLC A Primer in International Trade Management

Going Global New technologies make the world smaller. Access to worldwide information and markets Foreign companies are competing “domestically.” Why limit your company’s sales to local and national markets?

New technologies make the world smaller.

Access to worldwide information and markets

Foreign companies are competing “domestically.”

Why limit your company’s sales to local and national markets?

Understanding Global Markets Keep abreast of world event that influence the international marketplace Analyze trade and economic statistics Obtain advice from experts Export Counselors Attend Seminars International Trade Consultants Seasoned Exporters Trade Associations

Keep abreast of world event that influence the international marketplace

Analyze trade and economic statistics

Obtain advice from experts

Export Counselors

Attend Seminars

International Trade Consultants

Seasoned Exporters

Trade Associations

Screen Potential Markets Obtain export statistics that indicate product exports to various countries. Identify five to ten large and fast-growing markets for your company’s product. Identify some smaller but fast-emerging market that may provide ground-floor opportunities Target three to five of the most statistically promising market for future assessment

Obtain export statistics that indicate product exports to various countries.

Identify five to ten large and fast-growing markets for your company’s product.

Identify some smaller but fast-emerging market that may provide ground-floor opportunities

Target three to five of the most statistically promising market for future assessment

Advantages of Exporting Exporting can be helpful to your business. Increase and diversify sales: raises overall productivity. Growth of company: increase in employees Expand markets, thereby spreading risk Extend product life cycles by entering new markets Reduce dependence on domestics markets Learn about foreign competition

Exporting can be helpful to your business.

Increase and diversify sales: raises overall productivity.

Growth of company: increase in employees

Expand markets, thereby spreading risk

Extend product life cycles by entering new markets

Reduce dependence on domestics markets

Learn about foreign competition

Is Exporting For you? International Trade is not for everyone… If your company is successful selling in the U.S. then it may have a good chance at succeeding in international markets.

International Trade is not for everyone…

If your company is successful selling in the U.S. then it may have a good chance at succeeding in international markets.

Is Exporting for You? (cont.) Is exporting consistent with the company vision? Are your products and services successful domestically? Why will your products be successful in international markets? Do you have commitment and persistence? Do you have the financial resources?

Is exporting consistent with the company vision?

Are your products and services successful domestically?

Why will your products be successful in international markets?

Do you have commitment and persistence?

Do you have the financial resources?

Developing an Export Strategy Direct Selling Most ambitious approach Difficult Indirect Selling Find domestic buyers who represent foreign customers Export through Intermediaries Export Management Companies (EMC) Export Trading Companies (ETC)

Direct Selling

Most ambitious approach

Difficult

Indirect Selling

Find domestic buyers who represent foreign customers

Export through Intermediaries

Export Management Companies (EMC)

Export Trading Companies (ETC)

Export Management Companies Serve as the export department for one or several businesses Specialize by product or foreign market Provide immediate access to foreign markets Conduct market research Locate foreign representatives and/or distributors

Serve as the export department for one or several businesses

Specialize by product or foreign market

Provide immediate access to foreign markets

Conduct market research

Locate foreign representatives and/or distributors

Export Trading Companies ETC very similar to EMCs Demand-driven and transaction-oriented, acting as agent between the buyer and the seller Provide immediate access to foreign markets

ETC very similar to EMCs

Demand-driven and transaction-oriented, acting as agent between the buyer and the seller

Provide immediate access to foreign markets

Marketing Control Selection among the methods of exports depends on the level of marketing control desired Brand Reputation, Brand Equity & Future brand value is at stake Higher level of control implies use of an exclusive agent or Wholly owned sales subsidiary E.g: Absolut Vodka in US with Seagrams as an agent Intel, Samsung in India with a wholly owned sales subsidiary Direct Export gives a higher level of control

Selection among the methods of exports depends on the level of marketing control desired

Brand Reputation, Brand Equity & Future brand value is at stake

Higher level of control implies use of an exclusive agent or Wholly owned sales subsidiary

E.g: Absolut Vodka in US with Seagrams as an agent

Intel, Samsung in India with a wholly owned sales subsidiary

Direct Export gives a higher level of control

Exporting- Work Involved Product Shipment Export Pricing Local distribution Getting Paid Legal Issues After-sales support Exporting job requires legal, financial & people skills. Exports also requires extensive documentation!!

Product Shipment

Export Pricing

Local distribution

Getting Paid

Legal Issues

After-sales support

Exporting job requires legal, financial & people skills.

Exports also requires extensive documentation!!

Free Trade Agreements (FTA) U.S. trade strategy to open foreign markets Countries agree to remove tariffs, quotas, customs among and between them. Existing FTAs include: NAFTA CAFTA More. . .

U.S. trade strategy to open foreign markets

Countries agree to remove tariffs, quotas, customs among and between them.

Existing FTAs include:

NAFTA

CAFTA

More. . .

Closing Thoughts Exporting has been a traditional way for firms to expand abroad. With Globalization firms are often forced to expand simultaneously in several countries Exports is the easiest way of going global, but it is not simple. One must be aware of the legal pitfalls and foreign currency exchange problems For global firms such as Intel, Nokia, Sony, Honda foreign sales are much bigger than sales in their home country. Similar trend is seen in Indian companies Exports provide a natural hedge against recession in home markets

Exporting has been a traditional way for firms to expand abroad. With Globalization firms are often forced to expand simultaneously in several countries

Exports is the easiest way of going global, but it is not simple. One must be aware of the legal pitfalls and foreign currency exchange problems

For global firms such as Intel, Nokia, Sony, Honda foreign sales are much bigger than sales in their home country. Similar trend is seen in Indian companies

Exports provide a natural hedge against recession in home markets

“ Direct Exporting involves learning about overseas transportation, international trade credit, tariff barriers, Legal rules & regulations in foreign country etc. This requires quite an investment for a beginner” Please let us know how we can be of service. Thank you. LargerNet http://www.largernet.com