PREPARATION :
Over 20 years we have encountered many occasions of companies wishing to enter new markets, whereby a little
more knowledge of fundamental preparation would have gone a long way. Every product, service or entry strategy
has its own unique requirements, but we have set out below a few tips that you might consider before entering
international markets.
Over 20 years we have encountered many occasions of companies wishing to enter new markets, whereby a little
more knowledge of fundamental preparation would have gone a long way. Every product, service or entry strategy
has its own unique requirements, but we have set out below a few tips that you might consider before entering
international markets.
ADVICE
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DOMESTIC POSITION :
Never underestimate the power of your position within your domestic market. Success
within domestic markets provides potential distribution routes with a measuring stick, not
only of the product or service, but perhaps more importantly how well positioned you are to
cope with risk issues, including increased production, after sales service and general
support. You will also have had sufficient experience identifying any problem areas during
your companies development. A key aspect of developing international links is providing
partners with assurance of your stability, and this can be achieved by providing evidence of
good domestic results.
within domestic markets provides potential distribution routes with a measuring stick, not
only of the product or service, but perhaps more importantly how well positioned you are to
cope with risk issues, including increased production, after sales service and general
support. You will also have had sufficient experience identifying any problem areas during
your companies development. A key aspect of developing international links is providing
partners with assurance of your stability, and this can be achieved by providing evidence of
good domestic results.
PRESENTATION
MATERIALS :
MATERIALS :
This shouldn't be greatly different from undertakings in your domestic market. If you want
to sell a product or service you need to be able to present such in a way that is easily
understood and provides an accurate description of what you offer. Where this differs
slightly in developing partnerships internationally is that your materials may need to reflect
compliance to relevant certification or guidelines specific to the target market. Examples of
this would be the need to include full ingredients (including breakdown of any additives,
preservatives etc.) and cooking flow charts for processed foods, or accreditation in
accordance with target territory building codes for construction materials. All of these
details need to be prepared prior to any attempt at entrance. Often these materials will be
quite extensive, so you can enter discussions with general data initially, but you must be
prepared to provide these additional details in a timely fashion as the discussion
progresses.
It is also imperative that you provide correct costing data, including any relevant delivery
options. We cannot stress enough how important it is for you to get your figures right first
time, as anything else will set alarm bells ringing and the discussion will end very quickly.
Standard options are for product prices according to volume (e.g. Pallet, 20ft. FCL, 40ft.
FCL etc.) accompanied by shipping options (i.e. Ex-Works, FOB, CIF etc.). If you don't know
how to do this, Contact Us for project options.
We would also recommend these materials be provided in the language of the target
territory, even if you have no linguistic capabilities. If you need help with preparing these
materials, Contact Us for project options.
to sell a product or service you need to be able to present such in a way that is easily
understood and provides an accurate description of what you offer. Where this differs
slightly in developing partnerships internationally is that your materials may need to reflect
compliance to relevant certification or guidelines specific to the target market. Examples of
this would be the need to include full ingredients (including breakdown of any additives,
preservatives etc.) and cooking flow charts for processed foods, or accreditation in
accordance with target territory building codes for construction materials. All of these
details need to be prepared prior to any attempt at entrance. Often these materials will be
quite extensive, so you can enter discussions with general data initially, but you must be
prepared to provide these additional details in a timely fashion as the discussion
progresses.
It is also imperative that you provide correct costing data, including any relevant delivery
options. We cannot stress enough how important it is for you to get your figures right first
time, as anything else will set alarm bells ringing and the discussion will end very quickly.
Standard options are for product prices according to volume (e.g. Pallet, 20ft. FCL, 40ft.
FCL etc.) accompanied by shipping options (i.e. Ex-Works, FOB, CIF etc.). If you don't know
how to do this, Contact Us for project options.
We would also recommend these materials be provided in the language of the target
territory, even if you have no linguistic capabilities. If you need help with preparing these
materials, Contact Us for project options.
LOCALISATION :
This is a subject that is usually best served through good judgement. There are certain
markets that will always seek to gain the upper hand by placing conditions of acceptance
on the localisation of the product / service. There are arguments for and against complying
with these requirements, but we would suggest the best form of risk mitigation is
determining the willingness of the partner to share the cost of localisation, but you need to
be prepared for such negotiation.
markets that will always seek to gain the upper hand by placing conditions of acceptance
on the localisation of the product / service. There are arguments for and against complying
with these requirements, but we would suggest the best form of risk mitigation is
determining the willingness of the partner to share the cost of localisation, but you need to
be prepared for such negotiation.
CONTRACTS :
Be sure to have an idea of acceptable contract terms in mind before entering discussions.
Also be sure to be aware of how strong, or weak, your position is, as this will determine
how realistic your contract terms will be. Don't be surprised if initial discussions are purely
for volumes to test the market, whereby such volumes will likely need to be provided by air
as opposed to ocean freight. The only preparation you really need to be aware of is in a
cautious approach toward "exclusive distribution" rights. This is an approach utilised to
prevent entrance just as often as it is to ensure distinctive competency, so any new
relationship of this nature should be handled by having prepared terms and conditions for
any such right. This risk can be mitigated by setting realistic volume targets over a given
period (e.g. 1 x 20ft. FCL per quarter), with limitations on the period of contract (e.g. 1 year
rolling contract dependent on meeting sales targets).
Also be sure to be aware of how strong, or weak, your position is, as this will determine
how realistic your contract terms will be. Don't be surprised if initial discussions are purely
for volumes to test the market, whereby such volumes will likely need to be provided by air
as opposed to ocean freight. The only preparation you really need to be aware of is in a
cautious approach toward "exclusive distribution" rights. This is an approach utilised to
prevent entrance just as often as it is to ensure distinctive competency, so any new
relationship of this nature should be handled by having prepared terms and conditions for
any such right. This risk can be mitigated by setting realistic volume targets over a given
period (e.g. 1 x 20ft. FCL per quarter), with limitations on the period of contract (e.g. 1 year
rolling contract dependent on meeting sales targets).
MARKET KNOWLEDGE :
You should be guided by your partners local market knowledge, but this should not be
your only source of information. Wherever and whenever possible, conduct your own
research, without being intrusive. This is a process that should have been started before
entering discussion, but it shouldn't end after entrance either.
your only source of information. Wherever and whenever possible, conduct your own
research, without being intrusive. This is a process that should have been started before
entering discussion, but it shouldn't end after entrance either.
BE REALISTIC :
This has always been the biggest problem with companies looking to enter into new
territories. If a territory has a strong economy and high value potential market size
according to your research, it doesn't mean you will have immediate success, or any at all.
Learn to measure success by progress, and not by anticipated market size within an
impractical planned period of time. Businesses rarely seem to consider terms beyond 3
years, at which time they decide to pull-out altogether if margins haven't equated to
projected figures. Keep your investment in check, your anticipation under control, and act
according to your market position. You should understand that many markets will not
accept domestic entrants before 3 years of continued and sustainable operation, let alone
foreign entrants, so any plans to pull-out before this minimal time-frame will be premature.
This approach, from your main target sources of end distribution, is purely intended to
ensure the supply chain will not be broken suddenly or inappropriately, and also to ensure
you have had sufficient time to work out any wrinkles in your system within their market. It's
purely a risk mitigation process on their part, and not intended to victimise you or shut you
out. Just don't invest more than you can afford in the interim.
territories. If a territory has a strong economy and high value potential market size
according to your research, it doesn't mean you will have immediate success, or any at all.
Learn to measure success by progress, and not by anticipated market size within an
impractical planned period of time. Businesses rarely seem to consider terms beyond 3
years, at which time they decide to pull-out altogether if margins haven't equated to
projected figures. Keep your investment in check, your anticipation under control, and act
according to your market position. You should understand that many markets will not
accept domestic entrants before 3 years of continued and sustainable operation, let alone
foreign entrants, so any plans to pull-out before this minimal time-frame will be premature.
This approach, from your main target sources of end distribution, is purely intended to
ensure the supply chain will not be broken suddenly or inappropriately, and also to ensure
you have had sufficient time to work out any wrinkles in your system within their market. It's
purely a risk mitigation process on their part, and not intended to victimise you or shut you
out. Just don't invest more than you can afford in the interim.
If you have any real concerns over your plans to enter new territories, or want to receive assistance in preparing for
such, please Contact Us to discuss our project services and how we can help you.
such, please Contact Us to discuss our project services and how we can help you.
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