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Becoming a successful exporter to China

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Going beyond talking points and providing attendees with insight into how mid-sized businesses in America can create and successfully oversee a Chinese customer base.

www.theabcgroupllc.com

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Becoming a successful exporter to China

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  2. 2. Agenda ►Exporting as an Identity ►Exporting to China ►Market Research ►Market Entry ►Customer Oversight ►Expansion ►Self-Evaluation 2
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  4. 4. Who We Aim to Reach • Wisconsin business owners • C-Suite executives • Trade associations • Financial, Legal, and Private Equity professionals • State and local policy makers • Educators “Wisconsin ranked 19th in the nation for total value of exports in 2012” Wisconsin Dept of Agriculture, Trade and Consumer Protection 4
  5. 5. What It Means to Export Successful exporters possess: Strong, forward looking leadership An entire organization that understands the importance of the global economy A desire to minimize weaknesses and strive for continual improvement 5
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  7. 7. Opportunity for Growth “In 17 product categories in the United States, the market leader in 1925 remained the number-one or number-two player for the rest of the century.” Capturing the World’s Middle Class. Court, David;Narasimhan, Laxman 7
  8. 8. Game Theory Potential ramifications: Increased pricing competition Increased barriers to entry in China Ripple effects felt across all markets 8
  9. 9. From Theory to Action 9
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  11. 11. Internal Business Assessment •Product Evaluation -Is your product unique? -Do you have specific IP concerns with your product? -Is your product easily and affordably shipped by vessel? •Customer Evaluation -Do any of your current customers intend to establish a physical presence in China? -Do industry trends point towards China being a vital market in the future? •Current Export Activity -Do you currently export to any other emerging/ high growth markets? -What areas do you excel in as an exporter? -What areas do you struggle with as an exporter? -Do any of your competitors export to China? •Available Resources -Have you identified your capital and manpower constraints? -Does your organization possess the intellectual capital needed to succeed in China? 11
  12. 12. External Market Assessment •Current and projected demand for your goods in the marketplace -What is the size of your industry in China? -Is your industry growing or contracting in China, and at what pace? •Players currently operating in the marketplace -Who are the major players operating in the marketplace? -Are your competitors active in China? -How are these players currently reaching and servicing consumers? •Pricing competitiveness -Can the demand for your products withstand increases in costs due to overseas shipping? -How competitive are your prices with domestic labor costs? 12
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  14. 14. Initial Sale Has your company received unsolicited business inquiries from Chinese buyers? What sales channels does your company utilize in other markets to engage new customers? 14
  15. 15. Selecting Sub-Markets 15
  16. 16. Structuring Relationships • Payment terms should be structured to protect your interests -Industry standards vs Company standards -Emerging markets vs Mature/Domestic markets -Means of enforcement • Terms & Agreements to frame commercial business -Must take product life-cycle into consideration (one-time sales vs recurring business) • Quality Agreements -Prevent fraudulent claims -Protect all parties -Claim verification/testing procedures • Conflict resolution 16
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  18. 18. Active Management 18
  19. 19. Product Development 19
  20. 20. Relationship Building 20
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  22. 22. Sales Office 22
  23. 23. Contract Manufacturing 23
  24. 24. Joint Venture 24
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  26. 26. Self-Evaluation □ Is exporting to China essential to meeting your long- term business goals? □ Does your company have the qualified personnel need to meet your goals in China? □ Are you prepared to potentially become a “Made in China for China” manufacturer? □ Are key personnel in agreement with your company’s long-term China business plan? 26
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