Aftermarket Business World recently approached the Overseas Automotive Council (OAC) with the opportunity to provide a monthly guest column in 2011 to support its global reach efforts. I am honored to kick off this year’s first OAC column, and thank Aftermarket Business World for the opportunity to share in its building success as a global publication.
In the months to follow you will find more in-depth market analysis from OAC members, but I wanted to start our project off with a broader look at tools to help you grow your global business.
Market statistics tell us that many U.S. firms (and European for that matter) will need to look at foreign and emerging markets to achieve bottom-line sales growth in the years ahead. Unfortunately, we do not expect the car parc or miles driven to grow over the next decade in the United States as in the past. And with 2.2 persons per car in the U.S., compared to 10.4 persons per car in Brazil, 78.4 persons per car in China, or 191.3 persons per car in India, the growth opportunities in these hot markets are clear compared to our rather saturated market.
The good news is that these other markets present opportunities. To quote Thomas Friedman in The World is Flat, “three United States are better than one, and five would be better than three.”
So how do you grow your global business? Research and connections; neither of which is as hard as you might think.
First, find attractive markets for your products. Many OAC members report success in Latin America and the Middle East, largely due to the market share of North American-produced vehicles in these regions. Statistics on vehicle exports – helping indicate the size of the foreign market’s North American vehicle population – can be found through many trade association products.
The next step in research might be to gain a better understanding of the risks you could face in potential markets. These may include country risks, economic risks, political risks and operational risks. Are the natural resources and physical infrastructure available to manufacturers to move your products in the foreign country? Do you need a skilled workforce? Can you protect your intellectual property? Will currency inconvertibility be a problem?
Information on these risks and in some cases, insurance coverage options to hedge your bets, are readily available. Check these resources for information on risks: CIA World Factbook; World Bank Development Diamond; The Economist; Transparency International; Overseas Private Investment Corporation, Export Import Bank of the U.S.; and the Multilateral Investment Guarantee Agency.
Once you target your potential growth markets, begin developing relationships or consider hiring a consultant to provide you with detailed market data and market intelligence. Join trade associations that offer international market data to support your growth and facilitate the development of relationships with people that help you gain entry into your target markets. Contact your government office that supports national business (in the U.S., the Department of Commerce and its U.S. Commercial Service) and explore their data and market intelligence offerings. This might also be a good point to review export management companies, if you want to grow through exports instead of brick and mortar in foreign countries.
These connections will also help you review your competitive strategy for the markets in question. If your primary competitive advantage is speed, will you be able to ensure the same level of service in a foreign country? If your primary competitive advantage is quality, can you ensure the same level of quality? Can your competitive market strategy allow for growth in your target markets?
At this point, you may be able to better understand how your market entry options – exports, licensing/franchising, a joint venture, or a wholly foreign owned subsidiary – best fit your company’s strategy for global growth. Regardless of the path you chose, participation in reputable trade shows is an invaluable resource to help you make connections with potential customers, local vendors and to gather additional intelligence about the competitive marketplace in which you will compete.
OAC partners with Automechanika at several of its global shows to provide members the opportunity to connect. Advertisements and other connections with international and local trade publications, like Aftermarket Business World, also provide an avenue to promote your products or services. Visit the OAC Web site at www.oac-intl.org or contact our offices at [email protected] for more information and additional resources.
The key to success will be research and connections. Find partners you can trust and build your global marketing plan!
Aftermarket Business World recently approached the Overseas Automotive Council (OAC) with the opportunity to provide a monthly guest column in 2011 to support its global reach efforts. I am honored to kick off this year’s first OAC column, and thank Aftermarket Business World for the opportunity to share in its building success as a global publication.
In the months to follow you will find more in-depth market analysis from OAC members, but I wanted to start our project off with a broader look at tools to help you grow your global business.
Market statistics tell us that many U.S. firms (and European for that matter) will need to look at foreign and emerging markets to achieve bottom-line sales growth in the years ahead. Unfortunately, we do not expect the car parc or miles driven to grow over the next decade in the United States as in the past. And with 2.2 persons per car in the U.S., compared to 10.4 persons per car in Brazil, 78.4 persons per car in China, or 191.3 persons per car in India, the growth opportunities in these hot markets are clear compared to our rather saturated market.
The good news is that these other markets present opportunities. To quote Thomas Friedman in The World is Flat, “three United States are better than one, and five would be better than three.”
So how do you grow your global business? Research and connections; neither of which is as hard as you might think.
First, find attractive markets for your products. Many OAC members report success in Latin America and the Middle East, largely due to the market share of North American-produced vehicles in these regions. Statistics on vehicle exports – helping indicate the size of the foreign market’s North American vehicle population – can be found through many trade association products.
The next step in research might be to gain a better understanding of the risks you could face in potential markets. These may include country risks, economic risks, political risks and operational risks. Are the natural resources and physical infrastructure available to manufacturers to move your products in the foreign country? Do you need a skilled workforce? Can you protect your intellectual property? Will currency inconvertibility be a problem?
Information on these risks and in some cases, insurance coverage options to hedge your bets, are readily available. Check these resources for information on risks: CIA World Factbook; World Bank Development Diamond; The Economist; Transparency International; Overseas Private Investment Corporation, Export Import Bank of the U.S.; and the Multilateral Investment Guarantee Agency.
Once you target your potential growth markets, begin developing relationships or consider hiring a consultant to provide you with detailed market data and market intelligence. Join trade associations that offer international market data to support your growth and facilitate the development of relationships with people that help you gain entry into your target markets. Contact your government office that supports national business (in the U.S., the Department of Commerce and its U.S. Commercial Service) and explore their data and market intelligence offerings. This might also be a good point to review export management companies, if you want to grow through exports instead of brick and mortar in foreign countries.
These connections will also help you review your competitive strategy for the markets in question. If your primary competitive advantage is speed, will you be able to ensure the same level of service in a foreign country? If your primary competitive advantage is quality, can you ensure the same level of quality? Can your competitive market strategy allow for growth in your target markets?
At this point, you may be able to better understand how your market entry options – exports, licensing/franchising, a joint venture, or a wholly foreign owned subsidiary – best fit your company’s strategy for global growth. Regardless of the path you chose, participation in reputable trade shows is an invaluable resource to help you make connections with potential customers, local vendors and to gather additional intelligence about the competitive marketplace in which you will compete.
OAC partners with Automechanika at several of its global shows to provide members the opportunity to connect. Advertisements and other connections with international and local trade publications, like Aftermarket Business World, also provide an avenue to promote your products or services. Visit the OAC Web site at www.oac-intl.org or contact our offices at [email protected] for more information and additional resources.
The key to success will be research and connections. Find partners you can trust and build your global marketing plan!