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					International Business Success Workshop Series 2005




  International Business
         Success

   2005 Workshop Series
International Business Success Workshop Series 2005




                                      Part 1:
                  Do I Need a Partner and How Do I
                             Find One?



                   The Coca-Cola name in China was first read as
  International




                   "Ke-kou-ke-la", meaning "Bite the wax tadpole" or
                   "female horse stuffed with wax", depending on the
                   dialect. Coke then researched 40,000 characters
                   to find a phonetic equivalent "ko-kou-ko-le",
                   translating into "happiness in the mouth."
International Business Success Workshop Series 2005

Export Pricing
Product Price………FOB                              $10,000
Freight Atl--Sao Paulo……..                         1,200
Insurance……..                                        200
   Cash In Fist (CIF) total…….                    11,400

Import duty (20% of CIF)………                        2,280
Merchant Marine tax (25% of freight)……..             300
Warehousing & expediter (0.65% of CIF)….   74
Terminal handling (per container)……                 315
Contribution to broker’s union…..          228
Custom broker fee…..                                 700
Bank costs (1-3% of Ex Works price)….                200
   Total Landing Charges……                         4,097


TOTAL……                                          $15,497
International Business Success Workshop Series 2005

Preparing the Product
• Product Adaptation (Conform to local Government regulations,
    standards, climate, buyer preferences and standards of living)
•   Regulations (Protect domestic industries, protect health of
    citizens, local electrical and measurement requirements, restrict
    imports from certain countries, restrict unacceptable products
    (cultural or religious))
•   Branding, Labeling and Packaging (Customs, culture,
    language, content rules, weights and measures, local
    association)
•   Installation (Complexity of local assembly and installation)
•   Warranties (May vary from country to country depending on
    competition, culture and laws)
•   Servicing (After sales service - different products for different
    regions)
International Business Success Workshop Series 2005

Harmonized Code
Chapters 1-5:
       –   01 Live animals
       –   02 Meat and edible meat offal
       –   03 Fish and crustaceans, mollusks and other aquatic invertebrates
       –   04 Dairy produce; birds' eggs; natural honey; edible products of animal origin, not
           elsewhere specified or included
       –   05 Products of animal origin, not elsewhere specified or included


Code         Definition                                     Example
03         Chapter in which a commodity is classified       Fish and crustaceans, mollusks and
                                                            other aquatic invertebrates

0302        Represents the heading in that chapter          Fish, fresh or chilled, excluding fish
                                                            fillets and other fish meat of heading

0302.12     Represents the harmonized system code           Pacific salmon, Atlantic salmon and
                                   subheading                           Danube salmon

0302.12.0012 Represents statistical subdivisions            Commodity code for Chinook (king)
                                                                     Salmon

     ….   Versus Schedule B
International Business Success Workshop Series 2005

DOC - Business Contact Service
• International Contacts (Lists 30,000 overseas
  companies looking for products)
• Customized Market Analysis (Fee based custom
  search in one country for an agent or representative)
• Gold Key Service (Full service matching service
  including appointments)
• International Company Profiles (Full company profile)
• Commercial News USA (Published overseas with
  product/service details)
• Agent/Distributor Service (Commercial officers abroad
  will conduct a custom search for agents or
  representatives and proved a list of potential
  candidates)
• Trade Opportunities Program (Subscription service of
  overseas product sales leads)
International Business Success Workshop Series 2005

DOC - Trade Event Programs

• International Buyer Program (Brings
    overseas buyers to domestic exhibitions)
•   Trade Fair Certification Program (Financial
    support for a US products booth at a overseas
    exhibition)
•   Certified Trade Missions (Support for private
    and government trade missions)
•   Matchmaker Trade Delegations (Targeted
    matchmaking mission including appointments)
•   Catalogue Exhibition Program (Govt. trade
    booth in overseas locations or exhibitions which
    generates leads based on product literature)
International Business Success Workshop Series 2005

www.alibaba.com
International Business Success Workshop Series 2005




                 Part 2: How Do I Plan My
                           Foreign Market
                               Entry?
 International




                 When Parker Pen marketed a ball-point pen in
                 Mexico, its ads were supposed to have read, "it won't
                 leak in your pocket and embarrass you". Instead, the
                 company thought that the word "embarazar" (to
                 impregnate) meant to embarrass, so the ad read: "It
                 won't leak in your pocket and make you pregnant."
International Business Success Workshop Series 2005

Service Exports
•   Travel and Tourism
•   Transportation
•   Architectural, Construction, Engineering
•   Education and Training
•   Banking, Financial, Insurance
•   Entertainment
•   Information Services
•   Professional Business Services (Accounting,
    Advertising, Legal and Management consulting)
•   USA is the world’s leading exporter of services
•   Export services > Import services by $80 billion in
    1996
•   Largest importers (Europe, Japan, Canada)
•   Often companies follow their customers abroad
International Business Success Workshop Series 2005

“Terms” of Trade
• Ex (All costs from delivery point to buyers cost -
  Ex-Factory - Seller covers cost of unloading and
  delivery to destination)
• FAS (Free alongside ship) (Seller covers cost of
  delivery to embarkation port)
• FOB (Free on Board) (Seller covers cost of
  loading)
• CIF (Cost, Insurance & Freight – Seller’s covers
  cost to importation port)
• CFR (Cost & Freight only)
• CPT (Cost only)
• CIP (Cost & Insurance)
International Business Success Workshop Series 2005

Foreign Market Entry Strategies
• Exporting
    – Involves Seller (You), Foreign Importer, Govn,
      Transportation, Brokers
    – First, Easiest Step
• Licensing
    – Allows Use of Your Intellectual Property & Technical
      Assistance
    – Lower Cost, Potential High ROI
  International




                  Pepsi's "Come alive with the Pepsi




                                                              Blunders
                  Generation" translated into "Pepsi brings
                  your ancestors back from the grave," in
                  Chinese.
International Business Success Workshop Series 2005

Foreign Market Entry Strategies (2)
• Joint Venture
  – Objectives: Market Entry, Risk Sharing, Tech Access,
    Product Development, Govn Help, Distribution Channel
  – Issues: Ownership %, Control, Length of Agreement,
    Pricing, Tech Transfer, Local Capabilities
  – Problems: Conflict Over Asymmetric Investments,
    Mistrust Over Intellectual Property, Performance
    Ambiguity, Cultural Clashes, How to Terminate Deal

  – Hard For a Small Business to Succeed
International Business Success Workshop Series 2005

Foreign Market Entry Strategies (3)

• Direct Investment (FDI)
       – Direct Ownership
       – Highest Risk, Reward
       – Highest Cost
       – Highest Commitment
  International




                  Frank Perdue's chicken slogan, “It takes a




                                                               Blunders
                  strong man to make a tender chicken" was
                  translated into Spanish as “It takes an
                  aroused man to make a chicken
                  affectionate."
International Business Success Workshop Series 2005

Marketing Channels: Approaches

• Filling Orders of Domestic Buyers Who
  then Export the Product (Indirect)
       30% of US Exports are via domestic
       buyers.
• Seeking Out Domestic Buyers Who
  Represent Foreign End Users or
  Customers
• Export Directly
International Business Success Workshop Series 2005

Indirect Exporting
• Confirming House (Buying Agents for Foreign
  customer)
• Export Management Company (Exporting Sales
  Agent)
• Export Trading Company (Maybe a Producers
  Group -e.g. Apple and Pear Marketing Board in
  NZ)
• Export Agents, Merchants and Remarketers
  (Buy, Repackage and Sell on own Account)
  (Located in Exporting Country)
• Piggyback Marketing (Take Advantage of
  Another Distribution Channel to Provide a
  Broader Product Portfolio)
International Business Success Workshop Series 2005

Disadvantages of Indirect Exporting
• Potentially lower sales (different motivation
  and effort)
• Inadequate feedback (distance to customer
  to long)
• Wrong market, wrong distributor (wasted
  opportunity)
• Poor control (it is someone else’s problem)
• Low risk (low pain)
• Little financial commitment
• Faster to market
• No international experience required
• Higher risk (low gain)
International Business Success Workshop Series 2005

Direct Exporting
• Sales Representatives - (Manufacturers
  representative - time contract, commission, often
  represents many complimentary products)
• Agents - (Often used where contracts require service
  obligations)
• Distributors - (Buys and sells on own account - located
  in importing country - Often under agreement - Provide
  after sales service)
• Foreign Retailers - (Buy from traveling salesman or
  mail order catalogues.)
• Direct Sales to End Users - (Exporter ships and
  services)
International Business Success Workshop Series 2005

Disadvantages of Direct Exporting
•   Direct control
•   Time to market is longer
•   Greater investment required
•   Increased sales
•   Excellent feedback
•   Higher risk (cost of failure)
                    The Coca-Cola name in China was first read as
    International




                    "Ke-kou-ke-la", meaning "Bite the wax tadpole" or




                                                                        Blunders
                    "female horse stuffed with wax", depending on the
                    dialect. Coke then researched 40,000 characters
                    to find a phonetic equivalent "ko-kou-ko-le",
                    translating into "happiness in the mouth."
    International Business Success Workshop Series 2005

    Documentation
•     Air Freight Waybill
•     Bill of Lading (Proof of ownership)
•     Commercial Invoice (Layout and content often pre-specified by
      importing country)
•     Consular Invoice (Verification by Importing Govt. official located in
      Exporting country)
•     Certificate of Origin (Issued by local Chamber of Commerce)
•     NAFTA Certificate of origin (Needed between USA, Canada and
      Mexico)
•     Inspection Certificate (Independent testing certification)
•     Dock receipt and Warehouse Receipt (Proof of delivery)
•     Destination Control Statement (Restriction destinations)
•     Shippers Export Declaration (Used for statistics)
•     Export License (Required for specific goods and/or specific
      destinations)
•     Export Packing List (Detailed list of packages with content, weight,
      labels etc)
•     Insurance Certificate (Transit insurance)

				
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