Eye on world trade: is your company ready to go global?Globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation is a term that's on just about everybody's to-do list, as in: In order to be successful in the future, we must be a global company. Whether you're large or small, chances are you've considered it, or at least tossed the idea around in your head. If you're in the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. , it may be crucial to your survival. Depending on the kind of business you are in, going global may be as simple as selling a product off your Website to a consumer in Poland or Chile. However, for more and more companies, going global means exporting, joint ventures, operating partnerships and global sourcing. For companies creating a strategy for any or all of these approaches, there are some very key considerations to make. Can you and your company afford to embark on Verb 1. embark on - get off the ground; "Who started this company?"; "We embarked on an exciting enterprise"; "I start my day with a good breakfast"; "We began the new semester"; "The afternoon session begins at 4 PM"; "The blood shed started when the partisans a global agenda? Taking your company and/or product global successfully requires a tremendous dedication of resources. For most companies of small or even medium size, that typically means that those resources are going to be pulled from another area within your company (CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. or a VP of sales). Human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. -- Someone within your company will be charged with the responsibility to make this endeavor work; you need a leader. Can you afford to have this person and their time, spread over an additional project? Capital -- This person will also spend money to prepare, initiate and maintain your global agenda. Be sure that your company can afford to spend the money necessary to be successful internationally. Time -- In most cases, an expansion into any new market is a slow one. Do not embark on a global agenda assuming that a profit will be realized right away or that it will rescue your company from poor results domestically. Remember when you first started out and you took on short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. losses to make your company a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. success? This situation is similar, except now you probably have a great deal of experience that can help avoid the same mistakes, but a whole new set of barriers may be encountered. What is the competitive landscape for your product in these new countries and markets? Customer profiles -- Take the time to perform research on what the demand for your product will be in this new market. Even though it may seem logical to enter a market with similar characteristics to your home market (income, industry, political) the demand may not be similar, or a completely different product may already meet the demand. Competitor profiles -- As important as the customer is, so is the competition. Perform research to identify if competitors already exist in your target market (or are planning to enter it soon). If they are already there, what is their market share? What price do they charge for their product? Are their customers loyal? Is the market already saturated saturated /sat·u·rat·ed/ (sach´ah-rat?ed) 1. denoting a chemical compound that has only single bonds and no double or triple bonds between atoms. 2. unable to hold in solution any more of a given substance. with competition? The decision to take your company beyond its home market and search out opportunities to expand is an important one. It can make the difference between incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. and exponential growth Extremely fast growth. On a chart, the line curves up rather than being straight. Contrast with linear. . However, it also requires a great deal of dedication of resources (time, human, capital) and a great deal of research to be sure that your company makes the right moves. To learn more about taking your company to the global marketplace through global sourcing, facility development, international joint ventures or exporting, call Mike Shapiro at (313) 596-0438 or e-mail: mshapiro@detroitchamber.com. Mike Shapiro is director of Regional Business Development for the Detroit Regional Economic Partnership, the economic-development arm of the Detroit Regional Chamber. |
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