1. Taking your Business Global
How to Develop a professional
Export Plan
Khaled Bekhet,
DBA Researcher, Maastricht School of Management
(MSM)
Cairo, 20.02.2013
2. 1- Why Should Your Company Go Global?
• Going global is the planned process of contracting to do
business in foreign countries.
• According to Howard Lewis III and J. David
Richardson’s report Why Global Commitment
Really Matters!, companies that export grow
faster and fail less often than companies that
don’t. And their workers and communities are
better off.
• The biggest draw is the growth and an interest in
going where the customers are.
3. Global modes of entry (strategies)
Direct Exporting, international
distributors
Indirect
Exporting, EMC, ETC, Fra Global Establishing
nchising, Contractual Strategies international locations
agreements
Joint ventures
4. The Value of a Plan
• Benefits:
– Identifies strengths and weaknesses
– Prevents losing track of export strategy
– Allows for financing to build up a businesses’
export department
– Enhances communication
– Assigns responsibility
– Provides for result measurement
5. The Value of a Plan
• Additional Benefits:
– Challenges assumptions which can give insight
into new opportunities
– Assures a commitment to exporting
6. Length of the Plan
• Only needs to be a few pages to start, you feel exited
to continue
• The plan will evolve in detail and you will start to
modify and improve.
7. The Planning Process
• Questions to ask yourself (Product or Service):
– What need does my product or service fill in the global
marketplace?
– What modifications need to be made to adapt to an
overseas market?
– Do I need a special license or certificate from
exporter’s/importer’s government?
– Do I need to modify my packaging/labeling?
– How much will it cost to get the product to the market?
– What will be my pricing strategy?
8. The Planning Process
• Questions to ask yourself (Promotional, Management
Issues):
– What modifications will be necessary to my website to
ease the purchasing process?
– What (if anything) is necessary to protect my intellectual
property?
– Why am I pursuing international customers?
– How can I use the lessons I’ve learned in my previous or
others’ international sales experiences to make my new
export plan stronger?
9. The Planning Process
• Questions to ask yourself (Management Issues)
– Am I fully committed to exporting?
– How much time will it take for implementation?
– Is my production capacity high enough to meet the new
demand resulting from international sales?
– Is my personnel capacity adequate to meet the new
demand of international sales?
– Will I need additional financing?
• Where will it come from?
• How can I become familiar with government export
assistance finance programs that I may qualify for?
10. The Planning Process
• Questions to ask yourself (Management Issues):
– What will my export effort cost?
– What are my projected international sales for the
first year?
– What additional expertise in international trade will
I need and where will I get it?
• Webinars, How-to books, other classes, freight forwarders
– What sales channels could I use?
– How will I handle returns or warranty issues?
11. The Planning Process
• Questions to ask yourself (Management Issues)
– Will I attend any trade shows or join any trade
missions sponsored by the government for which I will
need to plan for in the first year?
• Where will I get information on these events?
12. The Planning Process
• Questions to ask yourself (Management Issues)
– What credit policies will I use
• Cash in advance? Letters of credit?
– How will I ship the product?
• Freight forwarder? Postal service? Air/Sea? Customer’s Responsibility?
– How will I make use of government export assistance
programs?
• Export subsidizations, IMC (For example)
– What documents will I need to become familiar with to
export?
• Export License
• Certificates of Origin….
13. The Planning Process
• Questions to ask yourself (Management Issues)
– What countries am I prohibited from exporting to?
– What countries require a license to export my good
to?
– What is the minimum order I will sell and ship?
• One unit? One container? One box?
– What will be the elements of my Export Action Plan?
14. Part 1: The Introduction
• Name of your company
– Put your company name
• Product to be exported
– Household Refrigerators (841821)
• Why you are going to begin exporting
– A mission statement
• Limit to a few paragraphs
15. Part 2: Goals
• Examples:
– Use direct export to increase company sales by 7% in two
years
– Entering markets outside of Egypt where 97% of buyers
live.
– Improve product lines, marketing and management by
learning from discerning customers in the new markets
where we will sell
– Locate one new distributor in two new country markets
within two years of selling via direct export.
16. Part 3: Financial & Resources Budget
• Examples:
– Annual capital budget equal to $25,000, which will
cover assistance finding distributors and
participation in a government-sponsored trade
show or overseas trade mission
– A decent web site that will be further
internationalized with the help of professional
designers.
– A full-time staff position
17. Part 4: Non-Financial Resources
• Examples:
– Several staff members have travelled abroad
– One staff member will take courses on how to
export
– One staff member will research free and low-cost
government export assistance
18. Part 5: Current Trends and Practices
• Examples:
– Revenues have grown 4 percent for the past four
years
– Our product is sold through a network of domestic
distributors
– Occasional unsolicited international sales, all to
individual buyers but with a few inquiries from
potential distributors
19. Part 6: Production Capacity
• An example:
– Capacity to increase production 30 percent
without additional capital investment.
• Customize for your business and products
20. Part 7: Target Markets
• Examples:
– Will pursue all leads generated by screening efforts and will also investigate
Nigeria as a regional market for West Africa.
– Will investigate Nigeria and other country markets for Household Refrigerators
by using available market research including those from government sources.
– Will look at past 4 years for effects of recession and 2013 partial year for signs
of recovery.
– Will look at Egypt-Free Trade Agreement countries for advantages created by
zero tariff on importation of goods. (COMESA)
– Will look at shipments of Household Refrigerators from Egypt to other
countries and the average selling price to help determine where the demand is
and whether our price competitive
– Will look at market size, GDP, national debt and currency reserves
– Will ask Egypt Commercial Service Officers in Egyptian embassies to help find a
distributor
21. Part 8: Your Risk Profile
• Customized for your business
• Example:
– Our risk is mostly centered on non-payment or goods held
up in foreign customs. Our cash in advance policy largely
mitigates risk.
– As we get close to finding one or more distributors, we
plan to use the services of our government export
promotion service. By better understanding the shipping
and export documentation processes, we will minimize
potential risk from customs clearance problems.
22. Part 9: Credit Policies
• Examples:
– Cash in advance via transfer
– Will check with our bank issuer to make sure account is in
good order before shipping goods
– Will consider and investigate providing terms for sales to
distributors
– Will become familiar with letters of credit for use with
larger orders from distributors
23. Part 10: Return Policies
• Customize for each product
• Example:
– Will provide full refund or replacement for lost
goods or goods damaged in transit, our Web site
will reflect policy
24. Part 11: Shipping
• Examples:
– Our staff will handle shipping tasks and will ship within 35
days of receiving order and verifying payment
– We will primarily ship by see as a lower cost option
• Sample shipping services:
– USPS
– DHL
25. Part 12: Freight Forwarder
• What will the forwarder do?
• What will it cost?
• Look for local licensed freight forwarders
26. Part 13: Export Licenses
• Check if export licenses needed for specific markets.
• Only about few of Egypt exports require a license
(military use, …)
• Check for exporter responsibilities under Egypt law
27. Part 14: Health Certificates
• Product may require a health certificate issued by
Egypt Ministry of Health or Ministry of Agriculture.
• Egypt Customs Website
28. Part 15: Language Laws
• Be sure that the product packaging includes all
necessary languages
• Consumer goods may require that ingredients are
displayed and that the phrase “Made in Egypt” is
included in the national language on the packaging
29. Part 16: My HS Code
• Check the Egypt Customs Web Site to find out your
product’s number.
• Example:
– 841821.3 is the HS code for Household
refrigerators, compression type
30. Part 17: Intellectual Property
• Examples:
– Will investigate international protection for my
trademark with the Egyptian Official Patent and
Trademark Office
– Will file for patent protection in countries where
we have distributors or agents.
31. Part 18: Export Documents
• Example:
– What are the documents we need to be familiar
with including the Commercial Invoice, Bill of
Lading, and Certificate of Origin?
– Check Chamber of Commerce, Egyptian Export-
Import control information center
– Egyptian Customs Website and Central Census
websites
32. Part 19: Pricing
• Examples:
– Our pricing strategy is mass product and mass pricing.
– We will offer to calculate the full landed cost to the customer
purchasing one or more of our products. We will make it clear in
our communications and on the Web site that the customer is
responsible for paying all applicable duties, taxes, and shipping
costs.
– For larger orders to say, Nigeria, we calculate the cost of shipping
one package at $ 24.75 per package including trucking, freight
forwarder fee, documentation fee, banking fee and
insurance. With a market price of $227 per package, minus
transportation costs and distributor fee, we will have about
$202.25 to cover production, marketing, and profit.
33. Part 20: Website Tactics
• Examples:
– We will make the following changes within the next 30 days:
• Internationalize the site by adding text on homepage welcoming
international buyers.
• Add a currency converter on the homepage.
• Add text regarding duties and taxes and that it is the buyer’s
responsibility to pay them. Include sample duties and taxes for select
countries
• Say that all prices are stated in U.S. dollars but inviting potential
distributors to use currency converter link, which will be located next to
each order placement button.
• Add international buyer testimonials as they become available.
• Add shipping by see cost as a lower cost option.
• Include clearly written returns policy.
• Invite inquiries from potential distributors.
34. Part 21: An Action Plan
• Example on next slide
35. Action Plan
Priority Objective Task Resources Schedule Evaluation
Review export plan Your time or staff
Next one-two
1 Create or revise export plan template and customize
for your business
time to write the
plan weeks
Completion of plan
Use template to identify Task in-house or Complete within
2 Internationalize Website
enhancements contract Web folks 30 days
Evaluate international transactions
Identify what you
Learn more about international Review different need to know and Complete within
3 transactions resources who in the company 60 days
Number of error free transactions
needs to know it
Identify staffing and
Develop database of international Create database and Number of messages; number of new
frequency of Start within 30
4 prospects and customers and
email new product offers
email template for
sending promotions
messaging; and free days potential prospects; sales
samples
Secure certificate from ISO, CE, ..if Understand the process, Complete within Certificate in hand if needed by importing
5 needed turnaround time, etc.
Staff time
14 days country
Determine whether product Complete within
6 needs an export license
Review government lists Staff time
14 days
Accurate knowledge of this item
Check Trade Staff time; no
Learn how to calculate duties and Complete within Accurate calculation and communication to
7 taxes
Information Center’s
Website: export.gov
charge for
14 days buyer
information
Review recommended Staff time; no
Identify for Tariff code for your Complete within Accurate completion of shipping
8 products
links in Customs
information
charge for
14 days documents
information
Calculate landed costs
Complete within
9 Establish pricing and returns policy and make revenue
projections
Staff time
14 days
Establish revenue benchmarks
Understand the services
Meet your local government Complete within
10 export resource
available to your
company
Staff time
30 days
Value of assistance provided
Use funds available
Complete within
11 Research a new market from IMC and export
subsidizations
Staff time
120 days
Go/or no go decision
Travel to the market with help
Meet potential Complete within
12 from your government export
resource
distributors
$22,000
first year
New revenue
36. Sources of Assistance in Going Global
• Make yourself known to:
– Commercial Attaches in Egyptian embassies in all target
countries.
– Engineering Export Council of Egypt (EEC-EG)
– General Authority for Export and Import Control
– Federation of Egyptian Industries (FEI)
– Industrial Modernization Center of Egypt (IMC)
– Egyptian Exporters Association-EXPOLINK
– Trade specialists
– Freight forwarders
37. Sources of Financing for Going Global
• Export Credit Guarantee Bank of Egypt
• Trade finance houses
38.
39. References
-Small Business Management: A Planning Approach, 2009, Joel Corman, Suffol
University, Emeritus Robert, Lussier Springfield College, Lori Pennel,
Bunker Hill Community College.
-Breaking Into The Trade Game: A Small Business Guide to Exporting, 2005
was produced under the guidance of Luz A. Hopewell, Deputy Associate
Administrator, Office of International Trade, U.S. Small Business
Administration, Christopher Eskelinen, Export Development Specialist.
-Your US-BRAZIL Trade Assist, 2006-2011 rosalienebacchus.com