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Articles, Business

Strategies for “Going Global” – Global aspects of Entrepreneurship

  1. Establish a presence on the Web
    • Available 24 hours a day to anyone anywhere in the world
    • 2.3 billion Web users worldwide
      • 245 million in U.S.
      • Nearly 2 billion in other countries
    • 23% of global retail sales will take place online by 2015
    • 62% of eBay transactions take place outside the U.S.
    • More than 80% of Facebook users live outside the U.S.
  2. Rely on trade intermediaries
    • Domestic agencies that serve as distributors in foreign countries for companies of all sizes
    • Types of intermediaries:
      – Export Management Companies (EMCs)
      – Export Trading Companies (ETCs)
      – Manufacturer’s Export Agents (MEAs)
      – Foreign distributors
  3. Form joint ventures
    • Domestic joint venture – two or more local companies form an alliance for the purpose of exporting their goods and services abroad
    • Foreign joint venture – a domestic firm forms an alliance with a company in the target nation
    • Most important ingredient: Choosing the right partner
    • Use the joint venture as a learning process  (Examples: Sony Ericsson, Yuhan-Kimberley)
  4. Engage in foreign licensing
  5. Consider international franchising
    • To expand internationally,franchisersshould:
      • Identify the country or countries that are best suited to the franchiser’s business concept
      • Generate leads for potential franchisees
      • Select quality candidates
      • Structure the franchise deal
      • Direct franchising
      • Area development
      • Master franchising
  6. Use countertrading and bartering
  7. Export
    • Companies with fewer than 20 employees account for 72% of all U.S. exporters
    • Significant impact: Small and medium-sized companies generate $1.37 billion each day in export sales!
    • Steps to successful exporting
      • Recognize that even the tiniest companies and least experienced entrepreneurs have the potential to export
      • Analyze your product or service
      • Analyze your commitment to developing export markets
        Core (Company Readiness to export) – Model: http://globaledge.msu.edu/tools-and-data/diagnostic-tools/core
      • Research potential markets and pick your target
      • Develop a distribution strategy
      • Find your customer (Government departments/International Trade Administration)
      • Find financing for export sales
      • Ship your goods
      • Collect your money
  8. Establish international locations 
  9. Use importing and outsourcing
    • Steps to successful importing or outsourcing
      • Establish a target cost for your product
      • Do your research before you leave home
      • Protect your company’s intellectual property
      • Select a reliable manufacturer
      • Provide an exact model of the product you want manufactured
      • Stay in constant contact with the manufacturer and try to Build a long-term relationship
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