Globalization needs to be part of the tool set for every entrepreneur doing a start-up today. This doesn’t mean immediately going global, but understanding the global market and having a plan for the future.
The International Trade Centre has a very useful export readiness diagnostic/checklist. This checklist of 59 questions gives an enterprise the opportunity to run a quick check on its export readiness by identifying possible gaps before entering a foreign market. Firms that are already exporting can discover some useful tips.
The questions are organized in eight sections, each of which covers a particular aspect of export preparation. Each question is formulated to be answered as [yes] or [no]. By answering [yes] to a question, the firm confirms that they have planned that aspect of export . Where the answer is [no] the firm can obtain more information on that topic through a customized report generated at the end of each section.
Go to: www.intracen.org/ec
A lack of readiness in one or more of the above areas will signal remedial or further preparation in some or all of the following key success factors:
- hire staff who are familiar with your target market
- senior managers must be willing to travel frequently to meet potential customers
- develop/attain an internationally recognised quality assurance system and service quality standard
- train staff in the culture and customs of your target market
- start with a market that is predisposed towards your product/early adopter
- consider entering the market with a local partner
- talk to foreign customers in your local market about their country-of-origin market
- talk to foreign alumni of your alma mater in your local market about their country-of-origin market
- talk to other national companies operating in the foreign target market.
RESEARCH THE MARKET
Research is the key first step in targeting the right (first) market to enter. In addition to sales potential, other aspects such as infrastructure availability, levels of competitor activity and stage of product adoption are key enquiry areas. Market intelligence is built using the secondary research and primary research techniques and sources set out in Chapter 2, albeit now for foreign markets. Legal, financial and accounting advisers will also be key providers of information.
Gather information and data on the following for the target country:
- Economic trends
- Political environment
- Currency rates
- Foreign investment and approval procedures
- Restrictions on termination and non-renewal
- Access to resources and raw materials
- Availability of transportation and communication channels
- Labour and employment laws
- Technology transfer regulations
- Language/cultural differences
- Access to affordable capital and suitable sites for units
- Government assistance programs
- Customs, laws and import restrictions
- Tax laws and applicable treaties
- Repatriation and immigration laws
- Trademark registration and protection
- Costs and methods of dispute resolution
- Agency laws and availability of appropriate media for marketing efforts