Internationalitation of SME'S

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Displays the description of the model of export consortia in a perspective of internationalization of companies. Additionally shown several cases of Export Consortia in Latin America, developed under the auspices of UNIDO

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Internationalitation of SME'S

  1. 1. www.unido.org The Internationalization of Firms and Export Consortia Carlos López Cerdán Ripoll UNIDO International Expert October, 2013 Belize
  2. 2. www.unido.org CONTENT 1.  Internationalization means 2.  The internationalization of companies 3.  Export Consortium as an instrument of internationalization 4.  Cases of Export Consortia at a glance
  3. 3. www.unido.org INTERNATIONALIZATION CONCEPT Internationalization means. Internationalization is a "cultural process" by which companies develop capabilities to do business in different countries, using local resources, both material and human.
  4. 4. www.unido.org INTERNATIONALIZATION CONCEPT Why process?. Why cultural? u Process: Because normally develops through successive stages of advancement. ü Some businesses internationalized born. ü Not only is selling abroad (export). Also distributing, purchasing, manufacturing ü  etc.. u Cultural: The word "culture" is used in the context of the directive function is primarily to get people to address organizational goals. To perform this function, the executives not only need to know how to address them, but also the motivations of those who must do.. ü The motivations of clients and executives are rooted in cultural processes: (religious, sociological and climate. Quite different depending on the area of the globe).
  5. 5. www.unido.org INTERNACIONALIZATION CONCEPT It is an active process: Directed and driven. u  Desire for growth. u  Economies of scale, etc.. But it is also passive: Globalization invades us. u  Global trade liberalization progresses. ü  Competitors pressure us. ü  Logistics progress. ü  Communications are cheaper, etc... u  Training and culture progresses. ü  Languages​​, travel, etc.. ü  Extensive training University. ü  Cultural exchanges, etc..
  6. 6. www.unido.org 2.- INTERNATIONALIZATION PROCESS Global Activity Productive Subsidiaries Abroad Commertial Subsidiaries Abroad Commertial Representatives Abroad Consolidated Export Sporadic Export Someone Buys From Abroad National Market Consolidation Local Activity
  7. 7. www.unido.org 2.- INTERNATIONALIZATION PROCESS MODIFIED UPPSALA THEORY Global Company Global Operations Production plants abroad Commercial branches abroad Search trade representatives Exports consolidated Domestic Exports sporadic Company Someone buys abroad Consolidation in the domestic market
  8. 8. www.unido.org BRIEF Ø  Internationalization process is: •  •  Progressive: By steps and nonuniform. Where an error in the process of moving takes years of stagnation.
  9. 9. www.unido.org ADVANCE KEY FACTORS Ø  Ø  Early stages: the delegation ability. u  The psychic distance. u  The cross cultural motivations. §  Executives. §  Customers. §  Suppliers. Advanced stages: Strategic Planning. u  The nature of strategic decisions. u  Depletion of business models. u  The ability to influence the future.
  10. 10. www.unido.org INTERNATIONALIZATION PROCESS Global Activity Productive Subsidiaries Abroad Commertial Subsidiaries Abroad AN UNSTOPPABLE PROCESS¡¡¡ Commertial Representatives Abroad Consolidated Export Sporadic Export Someone Buys From Abroad National Market Consolidation Local Activity
  11. 11. www.unido.org 3.- WHY INTERNATIONALIZE Ø  Very small local market. Ø  Some companies born with exporting vocation. Ø  Market risk diversification. Ø  Etc.
  12. 12. www.unido.org CHALLENGES FOR INTERNATIONALIZATION Large companies internationalize themselves, however sometimes deplete their business models, or make mistakes and get stuck in one of steps of the process ... SME’s do not have the skills and abilities to begin the process alone because they face transaction costs and learning and need help…
  13. 13. www.unido.org DIFFICULTIES OF SME’s FOR EXPORT FOREING MARKETS NECESSARY CONDITIONS: •  •  •  •  •  •  •  •  •  •  All the necessary equipment; Production capacity and working capital; Technology to meet quality specifications; Compliance with technical standards, environmental and legislative; Export infrastructure; Knowledge to do market research; Effective marketing techniques; Communication skills and negotiation; Administrative capacity and administrative facilities; Knowledge of export incentives. SME’s
  14. 14. www.unido.org 2.- INTERNATIONALIZATION PROCESS MODIFIED UPPSALA THEORY Global Company Global Operations Production plants abroad Commercial branches abroad Search trade representatives Exports consolidated Domestic Exports sporadic Company Someone buys abroad Consolidation in the domestic market Export Consortium
  15. 15. www.unido.org WHAT IS AN EXPORT CONSORTIUM? Ø  An Export Consortium is a voluntary alliance of companies with the aim of promoting goods and services of its members abroad and facilitating the export of their products through joint actions. Ø  An Export Consortium can be considered as a machine for export promotion offering specialized services to its members.
  16. 16. www.unido.org EXPORT CONSORTIUM GRAPHIC MODEL FOREING MARKETS EXPORT CONSORTIUM Firm A Firm B Firm C Firm D Firm E
  17. 17. www.unido.org EXPORT CONSORTIUM GRAPHIC MODEL CASE OF AGRICULTURAL & LIVESTOCK SECTOR FOREING MARKETS EXPORT CONSORTIUM 510 Agricultural Producers Producer Association Cooperative 300 Producers 80 Producers Producers Network 30 Producers Producer Association 100 Producers Firm
  18. 18. www.unido.org EXPORT CONSORTIUM GRAPHIC MODEL President Executive Director (Manager) designates Board of Directors Board of Auditors General Meeting Firm A Firm B Firm C Firm D Firm E
  19. 19. www.unido.org EXPORT CONSORTIA DOES AND DONT’S DONT’S DOES •  In an Export Consortium companies do not merge; •  Companies create a strategic alliance to export retaining their individuality to operate in the domestic market; •  It is not a cooperative. Although both can be considered a type of association; •  In the case of a consortium, however, common weaknesses are the core of members joint; •  Not a Guild or Association; •  Its purpose is to promote exports of their partners; •  Not a Club where members exchange ideas to export. •  Is Business Network which operates based on joint projects.
  20. 20. www.unido.org EXPORT CONSORTIA TAXONOMY TYPES Single sector; PROMOTIONAL CONSORTIA Multi-sector; Single products; Closely related products; SALES CONSORTIA Members from several regions; Targeting one market; Targeting global market
  21. 21. www.unido.org PROMOTIONAL EXPORT CONSORTIA United States Canada SERVICES PLATAFORM FOR COMPANIES: PROMOTION PROGRAMMING, ETC PRODUCTS Firm A Middle East Europe Firm B Firm C Firm D Firm E PRODUCTION IN EACH COMPANY Firm F
  22. 22. www.unido.org PROMOTIONAL EXPORT CONSORTIA •  •  •  •  •  •  •  •  •  •  Service platform for businesses; Structure with logistics and sales capacity; General manager, commercial and logistics; Product showrooms: Sales for each business line; Vendors by each company; Earnings per line per company; Firm share the expenses; Individual brands can coexist; There may be an umbrella brand.
  23. 23. www.unido.org SALES EXPORT CONSORTIA Whole salers Retailers PRODUCTS MARKETING SALES PRODUCTS Firm A Private Labels Boutiques Firm B Firm C Firm D Firm E PRODUCTION IN EACH COMPANY Firm F
  24. 24. www.unido.org SALES EXPORT CONSORTIA •  •  •  •  •  •  •  •  Unique collection of products; Portfolio of products from the target market; A shared private label; Forward integrates; Closer to customers; A company that generates its own profits; A company that has a lasting business; It is necessary to walk. There is nothing from night to morning.
  25. 25. www.unido.org ADVANTAGES OF EXPORT CONSORTIA Ø  Risk and cost reduction; Reduce promotional cost abroad for the firms; §  Reduce fix export costs; §  Reduce the risk of exporting and of exploring new business opportunities abroad; Access to new markets and major orders; §  Export diversification and penetration of inaccessible regions or distant §  Better knowledge of the market and lower sales-related risks Improved profitability. Improve the profit margins of member firms through a variety of savings, the development of an export strategy and the achievement of stable exports; Efficiency gains. By pooling financial and human resources and by sharing information and experiences, members of a consortium can improve and intensify their promotional activities abroad; Knowledge accumulation; Better access to potential funding; Firms maintain their juridical independence and managerial autonomy. §  Ø  Ø  Ø  Ø  Ø  Ø 
  26. 26. www.unido.org PROFIT CHAIN An Export Consortia program generates benefits for the following stakeholders: n  Firms. n  Public actors. n  Private organizations.
  27. 27. www.unido.org FIRMS §  Increase in export sales.
 §  Increase and diversification of the export supply of firms.
 §  Increased promotion and logistics capacity of the exporting companies.
 §  Access to a greater number of customers and markets abroad,that it would be impossible to achieve individually by companies.
  28. 28. www.unido.org PUBLIC ACTORS n  Harnessing the potential exporter, vocation and comparative and competitive advantages of the region.
 n  Increased visibility of the region as an environment in export- oriented growth.
 n  Strengthening fiscal fundraising by promoting the mass of exporting companies in the state.
 n  Generation and preservation of jobs in the export sector.
 n  Differentiation from other regions through the promotion of a culture of local export.
  29. 29. www.unido.org PRIVATE ORGANIZATIONS §  Strengthening and increasing the export capacity of its members through a successful model as Export Consortia.
 §  Loyalty of the members, in an environment of no compulsion, to give member companies a new scheme to promote competitiveness and Export Consortia.
 §  Empowering the affiliation of new firms through the positive effect produced by Export Consortia on its members.
 §  Differentiation from other business organizations to include in their portfolio of services a innovative product which does not exist in the market, such as the development of Export Consortia.
  30. 30. www.unido.org SINTHESIZING Export Consortia are a promotional machine for the exports of SME’s with export supply and financial constraints to promote their products and services intensively in foreign markets
  31. 31. www.unido.org Export Consortia are a simple and flexible instrument, adaptable to any development strategy and applicable to different situations and all sectors with export supply.
  32. 32. www.unido.org CASES OF EXPORT CONSORTIA AT A GLANCE Peru: 28 Developing Export Consortia in 4 regions benefiting more than 150 companies in 14 sectors, integrated support platform for 30 coordinators, 7 national consultants (tutors) and a National Coordinator. Bases for design of a fund incentive Export Consortia. Uruguay: 3 Export Consortia operating in 3 industry sectors and 30 SME networks; enactment of a Law in Support of Export Consortia in 2008). Tunisia: Export Consortia 10 operating and 10 more in development, more than 80 companies as direct beneficiaries in six sectors. Morocco: 17 Export Consortia in 6 regions; Over 100 firms directly in 8 sectors, a financial fund to support Export Consortia. Jordan: 2 Export Consortia and five SMB networks. More than 30 firms directly into 4 sectors.
  33. 33. www.unido.org CASES OF EXPORT CONSORTIA AT A GLANCE Mexico: a)  Jalisco20 Export Consortia, technical platform, benefiting more than 100 companies in 14 industries, preserving 5,000 jobs. Regional Coordinator. Consortia creative industries. b)  Zacatecas: 7 Export Consortia in 4 industrial sectors. c)  Distrito Federal: 4 Export Consortia in 4 Industrial Sectors. Costa Rica: Region Brunca. 3 Export Consortia operating in 3 sectors: agribusiness, fresh produce and tourism; Creation of the basis for the enactment of a Law on Support for Consortia. Ecuador: 5 Export Consortia.
  34. 34. www.unido.org MEXICAN CASES AT A GLANCE Mexico: a)  Jalisco20 Export Consortia, technical platform, benefiting more than 100 companies in 14 industries, preserving 5,000 jobs. Regional Coordinator. Consortia creative industries. b)  Zacatecas: 7 Export Consortia in 4 industrial sectors. c)  Distrito Federal: 4 Export Consortia in 4 Industrial Sectors.
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  44. 44. www.unido.org AGRIFOOD Hot peppers Export Consortium 120 producers of chilies of the state of Zacatecas, grouped across 9 producers associations.
  45. 45. www.unido.org AGRIFOOD Hot peppers Export Conortium The first shipment of 19 tons of chili, mole and corn leaves reach the food wholesale in Los Angeles, California. USA
  46. 46. www.unido.org Appareil Export Consortium 15 apparel manufacturers knitted and woven clothing’s in Zacatecas, Mexico.
  47. 47. www.unido.org COSTA RICA CASES AT A GLANCE Costa Rica: Region Brunca. 3 Export Consortia operating in 3 sectors: agribusiness, fresh produce and tourism; Creation of the basis for the enactment of a Law on Support for Consortia.
  48. 48. www.unido.org AGRO-INDUSTRIAL CONSORTIUM REGION BRUNCA 2013
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  51. 51. www.unido.org The consortium is comprised of seven Tourism Tourist Enterprises Brunca Region. Costa Rica The members of the Consortium are: •  Jardín Botánico Wilson & Estación Biológica Las Cruces ( OET) emilce.ramirez@ots.ac.cr/ www.ots.ac.cr Tel.(506) 27734004 San Vito, Coto Brus. •  Bahía Aventuras bahia.aventuras@gmail.com Uvita, Domical.Costa Rica •  Rancho La Botija/ Hotel de Montaña (506) 2770-2146 y (506) 8874-0967 info@rancholabotija.com www.rancholabotija.com La Bonita de Rivas, San Isidro del General, Costa Rica. •  Asociación de Mujeres Organizadas de Biolley (ASOMOBI) asomobi@yahoo.com, Buenos Aires,Puntarenas, Costa Rica. •  Agro San Miguel Adventures. agrosanmigueladventures@yahoo.com / www.agrosanmigueladventures.com (506) 27714119 Zapotal de San Pedro, Perez Zeledon, San Jose, Costa Rica •  Camping el Chaman chamanran4@hotmail.com 27438160 / 27438161. campingelchaman@gmail.com info@campingelchaman.com. www.campingelchaman.com Parque Nacional Marino Ballena, Sector La Colonia, Uvita, Puntarenas, Uvita, Puntarenas, Costa Rica. •  Ecoaventuras kuasran. saribu2002@yahoo.com Boruca Puntarenas, Costa Rica.
  52. 52. www.unido.org ¡ Over 400 Followers !
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  55. 55. www.unido.org Fresh Products Consortium Región Brunca 2013
  56. 56. www.unido.org Allied Firms Unión Zonal ASOFRUBRUNCA Distribuidora de Frutas Exóticas •  Federación de Centros Agrícolas Cantonales •  AFAPROSUR •  Frutos y Raíces Tropicales •  COOPEASSA RL
  57. 57. www.unido.org LAW PROJECT (MEIC)
  58. 58. www.unido.org PERUVIAN CASES AT A GLANCE Perú: 28 Developing Export Consortia in 4 regions benefiting more than 150 companies in 14 sectors, integrated support platform for 30 coordinators, 7 national consultants (tutors) and a National Coordinator. Bases for design of a fund incentive Export Consortia.
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  61. 61. www.unido.org FRÍO AÉREO Caso de Eficacia y Optimización Logística
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  73. 73. Perú:  Muyu     www.unido.org
  74. 74. www.unido.org URUGUAY CASES AT A GLANCE Uruguay: 3 Consorcios de Exportación operando en 3 sectores industriales y 30 redes de PyMES; Promulgación en 2007 de una Ley de Apoyo a los Consorcios de Exportación.
  75. 75. www.unido.org Phyto Uruguay Consortium
  76. 76. www.unido.org SERVICES OFFERED §  Technical Assistance Projects: §  Advice and technical support for design, management and evaluation of Export Consortia Programs. §  Capacity building and training of promoters of Export Consortia. (public and private sectors) Encourage development legal and financial incentive systems for the support of Export Consortia. §  Development Methodologies, Manuals, Training Packages. §  Organization Meeting of Experts to share international best practices in the field. §  Global Courses & Regional Courses. §  Toolboxes (analysis, management, monitoring and evaluation).
  77. 77. www.unido.org For more information contact: 
 
 Carlos López Cerdán Ripoll UNIDO International Expert E-mail: clcripoll@yahoo.com


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