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The market for services in the U.S. has been growing at a significant rate in recent
years. The international market for services has exhibited an even stronger growth rate,
providing opportunities that many larger services firms have pursued with great success.
These facts have prompted many small- to medium-sized firms to ask the question: How do I
go global?
There are five basic steps that will help a services firm get its first exporting
venture off on a smooth, orderly course:
1. In order to determine whether the firm should pursue international clients, one must
assess the export potential of the firm;
2. If the resources and commitment are there, the next step in the process is to seek and obtain
expert counseling;
3. After the firm has taken advantage of the counseling that is available, it must then select
markets that it considers "ideal;"
4. The firm has to formulate an export strategy; and
5. Finally, the firm must select a selling technique for the services offered.
Assess the
Export Potential
Since exporting requires an extension of a firm's resources, it is important that you
first assess your export potential. This assessment should include a look at industry
trends, the firm's domestic position in the industry, the effect it may have on present
operations, the the status of the firm's resources and the anticipated export potential of
the services the firm provides. The U.S. Department of Commerce (USDOC) can help U.S.
firms identify their strengths and weaknesses in a systematic and objective way by means
of its Business Counseling Program. International trade specialists can provide a
preliminary view of a firm's organizational and services strengths. It is, however, only a
first step in an in-depth examination of a firm's export potential. The program addresses
five aspects of a firm and its services: its business background; its motivation for going
international; top management's commitment to exporting; an assessment of services
strengths; and an assessment of market-specific strengths.
Obtain Expert
Counseling
A logical starting point to get expert counseling and assistance is through the
Trade Promotion Coordinating Committee (TPCC). This organization is made up of the
nineteen federal agencies that serve American exporting businesses. The TPCC established
the Trade Information Center (TIC), a "one-stop" source for information
regarding exporter-assistance programs. By dialing a toll-free number, 1-800-USA-TRADE,
firms can receive detailed information on the export resources and programs provided by
the federal government. Also, the TIC will send, free of charge, a guide, Export
Programs: A Business Directory of U.S. Government Resources. Another viable
starting point for counseling is the nearest U.S. & Foreign Commercial Service
(US&FCS) office of the International Trade Administration (ITA), U.S. Department of
Commerce. There are eighty-four U.S. Export Assistance Centers (EACs) in cities throughout
the U.S. and Puerto Rico. These EACs are staffed by trade specialists who will provide
export counseling and assistance as well as brief the firm on export programs and
services. The export assistance centers are part a global network of US&FCS offices.
The US&FCS offices overseas are located in the Commercial Sections of the U.S.
Embassies and Consulates in sixty-nine countries around the world. These overseas posts
seek trade/investment opportunities to benefit U.S. firms and provide direct export
assistance as well.
There are two other elements of ITA that provide sources of counseling. The industry
officers in Trade Development (TD) are assigned responsibility for specific business
sectors and provide information regarding industry analysis, trade policy and trade
promotion issues. The country desk officers in Market Access and Compliance (MAC) stay
abreast of their assigned country's overall economy and trade policies as well as U.S.
policies toward that country. ITA maintains a website on the Internet at www.ita.doc.gov.
Select Markets
The firm must select markets it considers "ideal" to initiate its
export activities. One of the best single resources for accomplishing this is the National
Trade Data Bank (NTDB). Updated monthly, the NTDB , contains information regarding basic
export information, industry-specific information, country-specific information and
industry-country information. The NTDB can be accessed at hundreds of Federal Depository
Libraries around the country or is available by subscription in a compact disc-read only
memory (CD-ROM) format. Also, the NTDB is accessible on the internet at www.stat-usa.gov . Publications contained in
the NTDB that are of great utility to services exporters include Country Commercial
Guides, Best Markets, the World Factbook and Key Officers of Foreign
Service Posts. The NTDB also holds hundreds of specific market research reports
covering a multitude of topics, as well as the Foreign Traders Index (FTI), a list of
foreign firms that have expressed an interest in working with U.S. exporters.
Formulate An
Export Strategy
The firm must now formulate an export strategy. This strategy should identify
and correlate at least four factors that jointly determine the best method of export
expansion: the firm's export objectives, both immediate and long term; specific tactics
the firm will use; scheduling of activities, deadlines, etc., that reflect chosen
objectives and tactics; and allocation of resources among scheduled activities. The
marketing plan should cover a two-to-five year period, depending on the kind of service
provided, the strength of competitors, conditions in the target market and other factors
such as regional expansion. This activity requires good business judgement on the part of
the firm as it develops and implements a sound exporting venture. Counseling can assist
the firm's management to focus on its objectives but the final decisions fall on the
executives of the firm. A publication that may assist in this element of the exporting
process is Services: Export of the 21st Century. This book contains a wealth of
information regarding the specifics of exporting services and can be ordered from the
Northern California District Export Council. (Affiliated with the San Francisco EAC)
Select A Selling
Technique
Alternative selling techniques for services firms include, for example, project
consultancy, electronic commerce, subcontracting, establishing a branch office, or
affiliating with a firm already established in the market. For many small firms, the
latter is frequently the most viable, given the cost effectiveness and rapidity with which
it can be accomplished. Also, the foreign affiliate can provide instant market exposure
and market research as well as potential clients. A number of U.S. Department of Commerce
programs and services are available to assist services firms in their exporting endeavors.
You should contact your local EAC to obtain more information or request any of the
programs or services mentioned below.
There are several ways to identify potential affiliates. One way is to utilize the NTDB
and its Foreign Traders Index (FTI). The FTI is a list of foreign firms that have
approached a U.S. embassy or consulate to request assistance in obtaining information on
American services firms. The firms are listed in the Index by identifying characteristics
such as country in which the firm is located or the service sought. The Agent/Distributor
Service (A/DS) is a customized search for interested and qualified foreign
representatives. The embassy or consulate will identify up to six foreign prospects who
have examined the American firm's literature and expressed interest in representation. The
Gold Key Service is a custom-tailored service for U.S. firms planning to visit a country.
Offered by many overseas posts, it combines several services, such as market orientation
briefings, market research, introduction to potential affiliates or clients, an
interpreter for meetings and assistance in developing a sound market strategy and an
effective follow-up plan.
The Customized Market Analysis (CMA) offers a quick, accurate assessment of how your
services will sell in a given market. This custom-tailored market research provides firms
with specific information on marketing and foreign representation for their services in
selected countries. Interviews or surveys are conducted to determine overall marketability
of the services, key competitors, price of comparable services, trade barriers, possible
business partners and applicable trade events. The International Company Profile (ICP) is
a customized report that can be used in evaluating potential affiliates as well as
clients. It is developed by the overseas posts and includes background information,
standing in the local business community, bank references and overall reliability and
suitability. Except for the export counseling, there are fees for USDOC programs and
services. The programs and services discussed in this article are among those that have
proven to be the most effective for services firms. Specific fees for the programs and
services mentioned in this article are as follows:
Agent/Distributor
Service (A/DS): $250 per country
Customized Market
Analysis: $1,000-5,000 per country
Gold Key
Service: $150-1,300 for first day per country
International
Company Profile (ICP): $100 per company
National
Trade Data Bank (NTDB): $575 annual subscription on CD-ROM
$59 per month on CD-ROM
$150 annual subscription on stat-usa
$50 3-month subscription on stat-usa
A Guidebook for
U.S. Services:
Services: The Export of the 21st Century $20
ncaldec@ix.netcom.com
World Trade Press Publications, 1997, Tel.(415)433-9084 Fax(415)421-1697
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