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How Do I Go Global?

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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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