Exporting & Importing: Negotiating Global Markets
|Exporting & Importing: Negotiating Global Markets
With respect to exporting, U.S. companies are novices in a world full of international trade experts. In contrast, the Dutch, British and Japanese, for example, have traded internationally for centuries. Because of the size of the domestic market, most American manufacturers have until recently not had to move into the world arena. Commerce Department statistics reveal that a relatively small number of multinational corporations account for 85 percent of U.S. trade overseas; in 1987, only 13 percent of U.S. manufacturers exported products.
But there are changes in the offing. U.S. Customs Service, Commerce Department and Census officials all report more and more small and midsize companies venturing overseas in the last decade. Recent statistics show that in 1990, 36 percent of firms with under $100 million in annual revenue exported their products; in 1993, that figure increased to 50 percent.
But while more U.S. companies engage in international trade, they are at the same time confused about foreign cultures and business practices. American firms often conduct business overseas in a slipshod, even careless, fashion. Many U.S. companies appear lost in what the experts call an international "gold rush" mentality, racing to capitalize on huge new potential markets without taking the time to research and plan.
When it comes to foreign trade, some technical knowledge is required, but mastery of international trade regulations will not matter if a product is unsuited to a foreign market. And that product will not sell if American companies lack awareness of the demands of international business and foreign cultures, and therefore cannot maintain long-term relationships with their foreign sales force or customer base.
American businesses can avoid pitfalls and misunderstandings (and the potential losses they bring) by carefully assessing their company's ability to conduct business abroad and evaluating products and markets. This chapter addresses these two tasks in detail. Topics covered include doing international market research; identifying overseas markets for products; selecting products suitable for international trade; finding international business contacts and gaining insight into foreign cultures as they affect business.
There are a number of reasons why Americans have not worked overseas. Here are some of the main concerns reflected in interviews with over 1,000 U.S. companies from all sectors:
* Lack of market demand
* Fear of the unknown
* Fear of foreign cultures
* Cost factors
* Lack of knowledge on how to break foreign markets
* Misinformation about foreign markets.
In today's competitive world expanding into global markets can mean survival for large and small companies alike. The costs of starting up in a foreign market can be greater in the short term, but the financial rewards can also be enormous. And even the smallest company can make a profit in foreign trade if that company uses common sense in its approach to a foreign market.