This document provides information on various topics related to global business management and exporting, including: - Free export counseling services available from various US government organizations. - Indicators of export readiness and assessments to evaluate a company's export potential. - Key conditions for entering global markets and elements of an export business plan. - Factors to consider when localizing products for international markets.

1. Global Business Management
Class Two

2. Free Export Counseling Services
• U.S. Export Assistance Center
• Small Business Administration
• State Trade Office (CITDs in California)
• Service Corps Of Retired Executives (SCORE)
• Small Business Development Center
• Women's Business Centers
• Veterans Business Outreach Centers
• Procurement & Technical Assistance Centers

3. Export Readiness Indicators
• Received unsolicited inquiries from foreign firms
• Domestic sales of product doing reasonably well
• Relatively strong share of the domestic market
• Product price‐competitive in the domestic market
• Product compares favorably with domestic
competitors in features and benefits

4. Export Readiness Assessment
• Assesses corporate export readiness
• Assesses product/service export readiness
• Tool to identify export weaknesses
• Tool for business counselors and trade
specialists to better address client’s
immediate export needs

5. Top Conditions for Going Global
• Management Commitment
• In‐depth experience with product/service
• Adequate cash flow
• Capacity and capability to produce/deliver
products/services internationally

6. Export Business Plan
• Company
• Target Market
• Product
• Pricing
• Market Entry
• SWOT
• Action Plan

7. Mission Statement Elements
• Vision ‐ big picture idea of what you want to
achieve
• Mission ‐ general statement of how you will
achieve your vision
• Core Values ‐ how you will behave during the
process

8. Operational Efficiency
• NIST MEP Network (Training and Certification)
– Manufacturing Skills
– Management and Team Skills
– Continuous Improvement Skills
– Computer Skills
Examples: Project Management Professional, Six
Sigma, Lean Manufacturing, ISO Certification and
AS9100C Review

9. Export Tax Credit Programs
• Federal IC‐DISC
• Federal R&D
• State R&D

10. Standards Organizations & Resources
• ISO ‐ International Organization for Standardization
• IEC ‐ International Electrotechnical Commission
• SAE International (Engineering Society)
• ANSI Online ‐ American National Standards Institute
• ANSI Online Electronic Standards Store (ESS)
• NSSN ‐ A National Resource for Global Standards
• ASTM International ‐ American Society for Testing
and Materials

11. Example: Environmental Regs
• Restriction of Hazardous Substances Directive (RoHS)
• EU RoHS and China RoHS
• Waste Electronic and Electrical Equipment (WEEE)
Directive
• Ozone Depleting Chemicals (ODC) excise tax
• Lacey Act
• Ewaste trade and shipment (Basel Convention)
• California's Green Chemistry Initiative and E‐Waste

12. Example: Eco‐Labels & Standards
• ENERGY STAR®
• IEE 1680 "EPEAT®"
• ECMA‐370 (IT Eco Declaration)
• BlueAngel
• TCO

13. Product Marks
• Restriction of Hazardous Substances Directive (RoHS)
• EU RoHS and China RoHS
• Underwriters Laboratories: UL Mark
• Canadian Standards Association (CSA) International
• China Compulsory Certification: CCC Mark
• Mexico: Normas Oficiales Mexicanas: NOM Mark
• European Union: CE Mark

14. International Pricing
• Cost‐plus method vs. Marginal‐cost method
• Additional export expenses:
– Packaging
– Foreign market research
– Advertising/marketing
– Translation
– Consulting/legal fees
– Foreign distributor product information and training
– After‐sales service costs

15. Direct vs. Indirect Exporting

16. Trade Intermediary Job Functions
• Market research/planning/promotion
• Find customers abroad
• Respond to inquires (trade leads)
• Issue price quotes (with your incoterm)
• Present purchase orders
• Handle export paperwork/documentation
• Arrange financing and shipping

17. Trade Intermediary Concerns
• Exclusivity and territory
• Non‐circumvention
• Price
• Marketing
• Customer support and product liability
• Duration of agreement
• Contractual enforcement

18. Cultural Constructs & Protocol
• Social etiquette (conversation, dress,
negotiating, entertaining)
• High vs. low context
• Monochronic vs. polychronic
• Cultural dimensions (power distance,
individualism, uncertainty avoidance,
masculinity, time orientation)

19. EPG Model
• Ethnocentric (Home Country Oriented)
• Polycentric (Host Country Oriented)
• Geocentric (Global Oriented)
The Tortuous Evolution of Multinational
Enterprises by Howard V. Perlmutter, 1969

20. Example of a Cultural Comparison
Cultural Dimensions
(Constructs)
US China
Power Distance (PDI) 40 80
Individualism (IDV) 91 20
Masculinity (MAS) 62 66
Uncertainty Avoidance (UAI) 46 30
Long Term Orientation (LTO) 26 87
Indulgence versus Restraint (IVR) 68 24

21. Target Market Identification
• Product / Service Demand
• No Significant Barriers to Entry
• No or Little Domestic Competition
• Strong U.S. Market Share
• High Receptivity
• Comfort Market
• Infrastructure Available to Finance and Deliver Goods
• Market Research

22. Review Market Research (Trade Data)
to Select Best Export Markets
• Volume
• Growth (five year trend)
• Market Assessment Checklist

23. Economic Integration
Free Trade Agreement
A treaty between two or more countries that permits commerce in
goods/service to be conducted across their borders without the imposing of
tariffs. NAFTA is an example of a free trade agreement.
Take Note to Bilateral vs. Multilateral Agreements
Free Trade
Area
Customs
Union
Common
Market
Economic
Union
Political Union
Eliminate Tariffs
Common External Tariffs
Free Movement of Production Factors
Common Currency
Common Gov’t.

24. U.S. Regional Trade Agreements
Australia; Bahrain; Canada; Chile; Colombia; Costa Rica; Dominican Republic; El Salvador; Guatemala;
Honduras; Israel; Jordan; S. Korea; Mexico; Morocco; Nicaragua; Oman; Panama; Peru; and Singapore.

25. The Matcha Green Tea Flavor
Kit‐Kat is popular in Japan.
The Matcha Green Tea Flavor
Kit‐Kat is popular in Japan.
Market Considerations
• Language
• Religion
• Tastes
• Business Practices
• Income Levels
(inelastic v. elastic goods)
• Product Standards
• Physical Environments
• Legal Requirements

26. These small square water‐melon fit
better in compact refrigerators.
These small square water‐melon fit
better in compact refrigerators.
Localization and Product
Adaptation
• Product
• Promotional Materials
• Packaging
Example: 1‐800 Toll Free
Numbers do not work
outside the U.S.

27. Market Factors & Potential Risk
• Geographic
• Economic
• Political
• Legal
• Technologic
• Social/Cultural
• Demographic

28. Types of Intellectual Property
• Patents
• Trademarks
• Copyrights
• Trade Secrets

29. IP Treaties and Resources
• Paris Convention, Berne Convention, and Madrid
Protocol
• World Intellectual Property Organization (WIPO)
www.WIPO.int
• U.S. Patent and Trademark Office (PTO)
www.USPTO.gov
• Stop Fakes Initiative www.StopFakes.gov
• US CBP Intellectual Property Rights Search (IPRS)
http://iprs.cbp.gov

30. Contractual Agreements
• Appointment of contractor (distributor)
• Scope of work
• Obligation of company (supplier)—warranties,
acceptance of goods
• Compensation—finance terms (sales quotas)
• Confidentiality and conflict of interest
• Force majeure (acts of God)
• Dispute resolution/arbitration
• Sign and date (both parties—distributor and supplier)

31. U.S. Export Controls
• Export Administration Regulations (EAR), Bureau of Industry & Security,
U.S. Dept. of Commerce
– Dual Use (The Wassenaar Arrangement)
– ECCNs listed in the CCL (EAR99=NLR)
– Deemed Exports (tech release)
– Anti‐boycott
• International Traffic in Arms Regulations (ITAR), Directorate of Defense
Trade Controls, U.S. Dept. of State
– Country Embargos
– United States Munitions List (USML)
• Office of Foreign Asset Controls, U.S. Dept. of Treasury
– Sanctions
• Foreign Corrupt Practices Act, U.S. Dept. of Justice

32. Export Control Lists to Check
Consolidated Screening List now available at HTTP://EXPORT.GOV/ECR/EG_MAIN_023148.ASP
• Denied Persons List (BIS)
• Entity List (BIS)
• Unverified List (BIS)
• Commerce Control List (CCL)
• United States Munitions List (USML) (ITAR)
• Specially Designated Nationals List (OFAC)
• Debarred List (ITAR)