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ITCC Launches New Communications Strategy and Global Manufacturing Series
by Sidney Salvadori, President - ITCC

CHICAGO The International Trade Club of Chicago (ITCC) announced today that it plans to launch a new internet site in conjunction with an electronic communications strategy. Both the re-designed web site (www.itcc.org) and the new communications plan aim to reach members more effectively and reinvigorate the mission and services of this century-old trade association.

A new series of export workshops and seminars targeting the manufacturing sector will address the needs of the association’s current membership. Seventy-five percent of ITCC members are manufacturing company executives operating in the Chicago metropolitan area.

“We [ITCC Board of Directors] have discussed for a long time the need to revamp our services to more effectively meet the needs of our members and to focus particularly on our manufacturers who are reluctant to engage in global trade,” stated Sidney Salvadori, ITCC president and director of business and international affairs for Chicago-Cook County.

The new manufacturing series is chaired by ITCC board director Michael Hetzel, vice president of marketing and sales for E.D.S. International, Inc. of McHenry, IL, a provider of strategic outsourcing services with operations in 31 countries, and a well-respected consultant for effective global manufacturing strategies. (See Hetzel’s most recent article “Transforming Your Company for Global Success”). The series of five seminars will be coordinated in collaboration with the Tooling and Manufacturing Association.
For many years, the ITCC also has conducted a very successful and sought-after Import Workshop Series held throughout the year.

Earlier this month, the ITCC Executive Committee appointed Roberto Bellavia as its new executive director. “I am very excited about taking on the management of the oldest and one of the most prestigious trade organizations in the U.S. I hope to build on Ms. Salvadori’s vision for the ITCC,” Bellavia remarked. Mr. Bellavia is a native of Rome, an agronomist by training, and most recently responsible for business development at the Italian American Chamber of Commerce – Midwest. He will be responsible for membership services and programs, communications, publications and web content, event planning, corporate sponsorship, and cooperation with potential partners.

The ITCC plans to implement an electronic mail member communications strategy. Existing and prospective members will be notified by email about upcoming programs and ITCC news. On March 24 the inaugural issue of ITCC Trade News was published. ITCC Trade News is a monthly electronic publication addressing current international trade matters, and containing useful tools for small and medium sized businesses.

JOIN the ITCC: www.itcc.org/join.asp

Transforming Your Company for Global Success - Part 1
by Michael L. Hetzel, VP Mktg & Sales - E•D•S Intl

There are many images associated with global trade, such as how it seems to benefit everyone on the globe except the U.S., or how China appears to hold all the cards in this game.

But, as in all complex issues, this is only partly true. And largely false.

There are also many elements of the global trade problem that are beyond the control of individual companies. These include the high value of the dollar, which has only recently moderated somewhat, the peculiar and troubling propensity of U.S. government officials to open our markets to other countries through low tariffs while allowing these same countries to impose high tariffs on our goods, and tax policy that first impedes and then aggressively punishes business success (These are our government officials doing this, not foreign officials!). What we can do in these areas is get out and vote, repeatedly advocate our needs ardently with our representatives in all levels of government, and support trade associations like NADCA, NTMA, NAM and the many similar state, local and regional groups who share the priorities and amplify the voices of their members.

There are also many elements that are not beyond our control. Here we can get to work on creating and exploiting a globally competitive position for our tooling and manufacturing companies, which can be accomplished in three major steps. No, I’m not saying it’s either easy or a sure thing. Business won’t reappear where market factors and the industry landscape have already shifted, and many companies will close before this problem is resolved, but growth is also being achieved today by many companies in the U.S. and these steps provide tooling and manufacturing companies with a fighting chance, not just a chance to fight.

First, we need to lose the prevailing attitude about global trade.

There’s a lot of fatalism in the U.S. about global trade. The word “can’t” comes up frequently, as in “we can’t compete with low cost labor” and “ we can’t compete with countries that don’t have an OSHA or EPA.” This fatalism is clouding our thinking and diverting our creativity and resources away from productive strategies and into defensive ones, such as the false promise of trade protectionism rather than the proven results that come with business model innovation. In the 1970’s the diversion was Japan – “Japan’s going to take over the world in manufacturing.” Well they didn’t, although they did make a large dent in the auto business. Now the diversion is China – “China’s going to take over the world in manufacturing.” Well they haven’t yet, but if we don’t get going they will.

We need to think of global competition in the same terms as we did the domestic competition up until now. There’s always competition that appears to have unfair advantages, in the U.S. and abroad, and there always has been. If we get over our surprise, anger and fear we start to see that there’s actually a lot we can do to innovate and compete globally.

Second, we need to prepare our companies with high productivity, and also with a combination of internal and external resources that supports a competitive posture on a global scale.

In this regard each company must think of itself beyond the way it’s currently configured. Engineering, project management and creative product innovations often emerge as the primary competencies of companies, while who actually cuts the steel and makes the parts is only secondary in the equation. Granted, a tooling company will need to make some tools and a die casting company will need to have some die casting operations, but we need to rethink just how much and what elements of the entire process are competitive and profitable internally, and just how much should be outsourced locally, nationally and/or globally to capture lower costs, higher profits and a higher return on investment.

Another area is in operations. A plant with $10MM in revenues that only runs 12 hours a day, 5 days a week, is actually capitalized for around $28MM in 24/7 operations. This makes it very difficult to compete with a world of continuous operations, often lights out, in countries like China. If a 24/7 operation moved in next door they would beat a 12/5 operation in the marketplace, let alone operating 24/7 in a cost advantaged region. Yet many U.S. companies, and particularly tool builders, operate this way. While it’s certainly quite challenging to operate 24/7, it’s an expensive if not fatal component of the competitive equation not to.

For manufacturing projects, a tool should no longer be considered as a single item but as an integrated collection of individual components and subassemblies, any of which can be outsourced while the highest value possible is added to those elements most effectively produced internally. A related group of tools to produce the components for a single product or assembly should no longer be considered as a single group, but as a collection of individual production elements, any of which can be outsourced while the most value possible is added to those components and/or processes that are most effectively sourced internally.

Strategic sourcing is the single most powerful tool for this. Select the lowest cost region with the needed technology for your business and harness it to provide a solid competitive posture against the rest of the world. Leverage the assets that bring the most value to your customers, and increase market share so that your domestic operations expand right along with your outsourcing activities. Control access to your customers by giving them everything they need to compete, so they can continue to be your customers rather than sourcing or relocating offshore themselves in order to meet their targets. The result will be a stronger U.S. manufacturing infrastructure and a restoration of domestic markets by providing the OEM’s with the most practical incentive to stay in the U.S.; market viability.

Strategic sourcing can be accomplished in several ways; through direct alliances and joint ventures with suppliers, both domestically and offshore, through consultants and buyer’s agents who can aggregate demand and apply global resources more efficiently than individual companies, or through a combination of both. The essential parts are to think vertically as well as horizontally, and be sure to kill all the sacred cows.

Importantly, these operational and strategic outsourcing initiatives need to be part of the marketing plan for a company, the tool for establishing and measuring customer value conveyance. Many companies make the mistake of conducting these initiatives as part of a cost reduction or operating plan, losing the key link to this one true measure of competitive effectiveness.

Third, we need to export more.

That’s right, export. Right here from the U.S. I can hear all of the typical “can’t” comments already; “we can’t compete from the U.S.,” and “we can’t compete against those ________” (put in your favorite people to blame here – of course most today would say “Chinese”). And don’t forget the ubiquitous “those ___________ are supported by their government, and we’re not.”

Well, we can compete from the U.S. and many companies do, just not enough of them. According to the U.S. Department of Commerce, only 1% of the 25,000,000 businesses in the U.S. export. And of that 1%, about 65% have 20 or fewer employees; so exporting is not only for large companies. Meanwhile, 95% of the world population lives outside of the U.S., representing 2/3 of all global purchasing power. This means that if only an additional 1% of our companies would export, we’d have a trade surplus rather than a deficit. The protectionists demand that the foreign producers be blocked. Why not sell more in the global markets instead, while still enjoying the lifestyle benefits of imported foreign goods?

And what about the Europeans? They have higher labor costs than we do, tighter environmental regulations, and higher taxes. Yet they export competitively all over the world, the same world where those supposedly unbeatable Chinese export. The biggest difference between Europe and us is that they’ve always had to export, since their internal markets have always been too small for long-term growth, so they aren’t suddenly surprised and dismayed as we are that other people in the world are able to compete in their own internal markets.

Then there’s the support the foreign companies supposedly receive from their governments but we don’t. They certainly do receive a great deal of support from their governments, however we have considerable support available here, too, from federal, state, county and local governments, but most U.S. companies don’t take the initiative to learn about and apply this support (After all, “everyone knows” we can’t export from the U.S., so why try?). For example, the U.S. Export Assistance Center (Department of Commerce) will research markets in over 140 countries on your behalf, for a cost so modest as to be nearly irrelevant. The Export-Import Bank will fully insure foreign receivables and provide export gap financing, also at modest cost and offering protection and support unavailable even if you market domestically. We all pay for these services through our taxes, but very few of us (1%) take advantage of them.

We can’t assume that products and processes that we take for granted in the U.S. are available in other countries. Regardless of how basic their product or process, every company in the U.S. should examine export opportunities, not just assume there are none. Not every company will be able to export, but presently few can honestly say that they have directly investigated their export potential. Most importantly, those who can export will thrive right here in the U.S., and so will those companies who are in their U.S.-based supply chain.

In conclusion…

I hope I’ve made some of you angry. Angry enough to do some research, to contact the U.S. Export Assistance Center and the Ex-Im Bank to see if any of this is true. There’s a lot to the nuts and bolts of these strategies, but American companies need to develop the process and tailor our industrial dialog to developing these strategies every bit as much as we now talk about new processes and materials. We also need to set aside the fear, anger and myths that foster the fatalism that is pervasive in American manufacturing and is diverting our attention, resources and creativity, and take back control of our future. If today’s attitude had prevailed in the last century, we would never have been at the top of the industrialized world to begin with.

Michael L. Hetzel is VP/Marketing & Sales for E•D•S International, Inc. of McHenry, IL, a provider of strategic outsourcing services with operations in 31 countries, and a member of the ITCC Board of Directors. He can be reached by phone at 708-710-5935 or at: mlhetzel@eds-international.com.

This article first appeared in the 12/02 issue of Die Casting Industry Links magazine, the monthly publication of the North American Die Casting Association.

ITCC Programs

The ITCC offers workshops, seminars, roundtables, conferences, online forums, and networking events which meet the needs of many practicing professionals. In today's rapidly changing world, it is mandatory that we maintain and upgrade our skills. The ITCC Import Workshop Series, business networking events, as well as a new series targeting the manufacturing sector are held throughout the year.

The Global Manufacturing Series and the Import Workshop Series are two of several ITCC programs designed to provide forums for discussion, collaboration and education to support the profession of international business management and promote the sustained and balanced growth and success of U.S. businesses as other global regions emerge and develop as both competitive threats and opportunities for trade.

See the ITCC Events Calendar at www.itcc.org for the upcoming and past Import Workshop Series, and other trade-related programs and seminars.

See www.itcc-tma.org for the 2005 and 2004 ITCC Global manufacturing Series.

JOIN the ITCC: www.itcc.org/join.asp

ITCC Mission and Historical Highlights

The International Trade Club of Chicago (ITCC) is a not-for-profit trade association based in Chicago, Illinois. Founded in 1919, the ITCC is the oldest international trade association in the United States. Members represent a broad range of manufacturing, technology and service sectors, as well as educational institutions, government agencies, and the diplomatic corps.

The Global Manufacturing Series and the Import Workshop Series are two of several ITCC programs designed to provide forums for discussion, collaboration and education to support the profession of international business management and promote the sustained and balanced growth and success of U.S. businesses as other global regions emerge and develop as both competitive threats and opportunities for trade.

The ITCC aims to

• foster and expand international trade and investment;

• encourage the profession of international business management on a high ethical plane;

• furnish its members with a medium for exchange of experience and a forum for the discussion of problems of mutual interest;

• seek by concerted action to remove barriers and obstacles which may interfere with the development of international trade and investment; and,

• promote better understanding and appreciation of the significance of international trade and investment.

BENEFITS

Benefits include special rates on a variety of professional training workshops offered throughout the year plus major world trade events, business networking events, trade-related articles, up-to-date industry news, and special interest groups.

The ITCC offers workshops which meet the needs of many practicing professionals. In today's rapidly changing world, it is mandatory that we maintain and upgrade our skills. The ITCC Import Workshop Series as well as a new series of export and trade seminars targeting the manufacturing sector are held throughout the year.

One effective and enjoyable way to accomplish this goal is the educational program offered by the ITCC. We can exchange ideas, share experiences and learn from experts in various fields. You can receive discounted training in our Import and Export workshops held throughout the calendar year.

Make the commitment now to invest in your professional development.

• Professional development programs and symposia

• Seminars, technical presentations, topical meetings with discounts on fees to members

• Sector-focused working groups - manufacturing committee, nanotechnology committee, etc.

• ITCC Trade News - quarterly newsletter with latest trade news, event announcements, and useful web links.

• Business Networking Opportunities with other international trade specialists

• Career Enhancement - Meet others in your profession, share ideas and make valuable contacts

• Professional Affiliates Network - Free consultation and discounted services - expertise in legal, accounting, logistics, etc.

• Speakers Bureau - Presentation and workshop opportunities

• Marketing Opportunities - Member Company links, event sponsorship, etc.

• Private and secure member-to-member internet chat room, bulletin board, and forum.

• Direct access to partner organizations, including manufacturing associations and government agencies.

For membership and program information, please contact membership@itcc.org or 312-368-9197 or visit www.itcc.org.

JOIN the ITCC: www.itcc.org/join.asp

_____________________________________________________________________

HISTORICAL HIGHLIGHTS

• 1919
Chicago export managers create an informal association

• 1953
In recognition of the broadening scope of global trade, the Export
Club of Chicago changes its name to The International Trade Club of
Chicago

• 1964
President's "E" Award for service excellence

• 1992
"The Export Handbook" published in cooperation with the
Illinois Department of Commerce and Community Affairs

• 1994
75th Anniversary Celebration

• 1995
Governor Edgar's Export Awareness and Development Award

• 1996
55th Chicago World Trade Conference - Export Licensing: Basic
Rules and New Regulations

• 1997
International Export Network Initiative

• 1998
ITCC Website Launched

• 1999
80th Anniversary Celebration

• 2001
Medical Devices Conference: U.S. and China

• 2002
Interactive ITCC Website Launched - www.itcc.org

• 2003
Inaugural Issue of "ITCC Trade News," trade news electronic
periodical

• 2004
ITCC Global Manufacturing Series in collaboration with the Tooling
and Manufacturing Association Inaugurated and Series Website
launched - www.itcc-tma.org

• 2004
85th Anniversary Celebration

• 2005
AutoMed 2005 - 2nd Annual ITCC Global Manufacturing Series in
collaboration with the Tooling and Manufacturing Association and
Series Website launched - www.automed2005.org

• 2006
ITCC Global Manufacturing Series in collboration with numerous
trade and industry partners - www.itcc-gms.org

• 2007
U.S. Midwest and Canada Global Manufacturing
Case Studies, a joint publication of the
ITCC and the Government of Canada, is published

• 2007
ITCC Global Manufacturing Series in cooperation with
Japan External Trade Organization (JETRO) – The Mindset
of Monozukuri

• 2008
ITCC Global Manufacturing Series in cooperation with
the Australian Trade Commission (Austrade)

ITCC Membership & Benefits

Founded in 1919, the International Trade Club of Chicago (ITCC) is a not-for-profit trade association based in Chicago, Illinois. Members represent a broad range of manufacturing, technology and service sectors, as well as educational institutions, government agencies, and the diplomatic corps.

The ITCC aims to foster international trade and investment; to encourage the profession of international business management on a high ethical plane; to provide a medium for exchange and a forum for the discussion of issues of mutual interest; to seek by concerted action to remove barriers which may interfere with the development of international trade and investment; and to promote better understanding and appreciation of its significance.

The Global Manufacturing Series and the Import Workshop Series are two of several ITCC programs designed to provide forums for discussion, collaboration and education to support the profession of international business management and promote the sustained and balanced growth and success of U.S. businesses as other global regions emerge and develop as both competitive threats and opportunities for trade.

The requirements for becoming a member are liberal although applicants are carefully screened for sincerity of interests and whether or not they could benefit from Club membership. The qualification is only that the applicant be associated with international trade as a result of vocation, business, or personal interest.

Membership in the ITCC is one of the best investments an international trade executive or specialist can make.

DUES
The dues for an annual membership are:
• $95 for individuals - includes major discounts for business networking events and programs
• $245 for corporate memberships (includes 3 individual memberships)
• $85 for diplomatic memberships
• $75 for not-for-profit or academic memberships
• $50 for student membership (full time student only)

Make the commitment now to invest in your professional development.

MEMBER BENEFITS
• Accessible Professional Education at the Executive Level
By joining as a member, you've made a commitment to accessible continuing professional education focused at the executive level. You understand how important it is to keep up with the latest in ideas and trends in international trade and related startegies and technologies to grow your business. We work hard at providing the highest quality of events on international business in the Midwest.

• Participate in a Community of International Executives
The ITCC is dedicated to providing you with Qualified networking opportunities. Members who come to the events and communicate on the ITCC website on a regular basis have access to a large community of executives who share the vision of change and incredible growth opportunities that the global marketplace provides. By joining this community you've made an important commitment to maintain your contacts with serious international executives in our area.

• Full Individual Access to all Member Activities
This includes members-only events and participation in ITCC volunteer committees. Members-only activities include:
• Networking Receptions
• Special Interest Groups
• Committees
• Executive Exchanges
Additional information about these activities will be provided to you via email.

• Ability to Participate in www.itcc.org Forum
You have 24-hour access to your ITCC website and we urge you to contribute and build our international community. You may discuss trade-related ideas and issues with other members in our live chat room or start a discussion thread on our bulletin board. You may submit articles, whitepapers, or preferred links for consideration and publication on the website or in our newsletters.

• Ability to Participate in ITCC Trade Report
Each quarter our Trade Report is devoted to exploring trade issues, spotlighting specific industries, regions, upcoming events and member companies. As a member you may add to the dialogue by presenting your own ideas, links, and present whitepapers, articles or other information to the community we serve. Please note, that the ITCC Trade Report currently reaches more than 2500 executives and is growing, so this could be a valuable way for you to reach this community.

• Discounts up to 50% for ITCC Events and Co-Sponsored Partner Events.
We appreciate your support in the Club by joining as a member. As a member, you will enjoy important discounts to the main Club events. By attending multiple events, your membership will pay for itself.

• Individual Executive Listing and Access to Member Directory
Our online member directory is in Alpha stage and will soon provide an important benefit by extending your reach beyond the regular events. Stay tuned for details on the directory as they occur.

For membership and program information, please contact membership@itcc.org or 312-368-9197 or visit www.itcc.org.

JOIN the ITCC: www.itcc.org/join.asp

Identifying International Markets

To succeed in exporting, you must first identify the most profitable international markets for your products or services. Without proper guidance and assistance, however, this process can be time consuming and costly -- particularly for a small business.

The U.S. federal government, state governments, trade associations, exporters' associations and foreign governments offer low-cost and easily accessible resources to simplify and speed your foreign market research. This chapter describes those resources and how to use them.

FEDERAL GOVERNMENT RESOURCES

Many government programs and staff are dedicated to helping you, the small business owner, assess whether your product or service is ready to compete in a foreign market.

The U.S. Small Business Administration

Many new-to-export small firms have found the counseling services provided by the SBA's Service Corps of Retired Executives (SCORE) particularly helpful. Through your local SBA District office, you can gain access to more than 850 SCORE volunteers with experience in international trade.

"Our SCORE counselor is really like a big brother to us and our company," says Jim Hadzicki, Vice-President of San Diego-based Revolution Kites, a recreational kite manufacturer. Exports now account for 24 percent of their sales in just three years. "I recently went on a trip to Tokyo to line up a distributorship. Our SCORE counselor helped me list our objectives, what I was to do and ask about and even told me what gift I should take to the Japanese representative," says Hadzicki.

Two other SBA-sponsored programs are available to small businesses needing management and export advice: Small Business Development Centers and Small Business Institutes affiliated with colleges and universities throughout the United States:

Small Business Development Centers (SBDCs) offer counseling, training and research assistance on all aspects of small business management.

The Small Business Institute (SBI) program provides small business owners with intensive management counselling from qualified business students who are supervised by faculty. SBIs provide advice on a wide range of management challenges facing small businesses -- including finding the best foreign markets for particular products or services.

The U.S. Department of Commerce

The U.S. Department of Commerce's (DOC) International Trade
Administration (ITA) is a valuable source of advice and information. In ITA offices throughout the country international trade specialists can help you locate the best foreign markets for your products. Oklahoma exporter OK-1 Manufacturing Co. has found the foreign market research available through the ITA extremely useful:

"The Oklahoma District ITA office prepared a market research study to determine whether we should export our fitness accessory items to Japan," says Sherry Teigen, OK-1 Manufacturing Co. export manager. Today, the company exports to Japan in addition to 20 other countries. Since it began exporting, the company staff has grown by 75 and Sherry's husband, OK-1's President, Roger Teigen, won the 1991 SBA Exporter of the Year award.

District Export Councils (DECs) are another useful ITA-sponsored
resource. The 51 District Export Councils located around the United States are comprised of 1,800 executives with experience in international trade who volunteer to help small businesses export. Council members come from banks, manufacturing companies, law offices, trade associations, state and local agencies and educational institutions. They draw upon their experience to encourage, educate, counsel and guide potential, new and seasoned exporters in their individual marketing needs.

The United States and Foreign Commercial Service (US&FCS) helps U.S. firms compete more effectively in the global marketplace with trade specialists in 69 United States cities and 70 countries worldwide. US&FCS offices provide information on foreign markets, agent/distributor location services, trade leads and counseling on business opportunities, trade barriers and prospects abroad.

The United States Department of Agriculture

If you have an agricultural product, you should investigate the U.S. Department of Agriculture's (USDA) Foreign Agricultural Service (FAS).

With posts in 80 embassies and consulates worldwide, the FAS can obtain specific overseas market information for your product. The FAS also maintains sector specialists in the United States to monitor foreign markets for specific U.S. agricultural products.

Most state commerce and economic development offices have
international trade specialists to assist you. Many states have trade offices in overseas markets. Dial Tool and Manufacturing of Franklin Park, Illinois, found the Illinois State office in Hong Kong very helpful:

After visiting the Illinois State office in Hong Kong, Dial Tool and Manufacturing President ITCC member Steve Pagliuzza reports that he was able to sign on sales reps for his company's metal stamping equipment: "My state office in Hong Kong gave me several names of potential reps. We eventually signed them on and are now successfully exporting to Asia, in addition to Europe, Canada and Mexico. In four years, 15-20 percent of our sales now come from exporting."

Port Authorities are a wealth of export information. Although
traditionally associated with transportation services, many port
authorities around the country have expanded their services to provide export training programs and foreign-marketing research assistance. For example, the New York-New Jersey Port Authority provides extensive services to exporters including XPORT, a full-service export trading company.

PRIVATE SECTOR RESOURCES

In addition to government-supported resources, private sector
organizations can also provide invaluable assistance.

Exporters' Associations
World Trade Centers, import-export clubs and organizations such as the American Association of Exporters and Importers and the Small Business Exporter's Association can aid in your foreign market research.

Trade Associations
The National Federation of International Trade Associations lists over 150 organizations in the U.S. to help new-to-export small businesses enter international markets. Many of these associations maintain libraries, databanks and established relationships with foreign governments to assist in your exporting efforts.

More than 5,000 trade and professional associations currently operate in the United States; many actively promote international trade activities for their members.

The Telecommunications Industry Association is just one association which leads frequent overseas trade missions and monitors the pulse of foreign market conditions around the globe. Whatever your product or service, a trade association probably exists that can help you obtain information on domestic and foreign markets.

Chambers of Commerce, particularly state chambers, or chambers located in major industrial areas, often employ international trade specialists who gather information on markets abroad.

HOW TO GATHER FOREIGN MARKET RESEARCH

Now that you know where to begin your research, you should next
identify the most profitable foreign markets for your products or services.

You will need to:

. classify your product;
. find countries with the largest and fastest growing
markets for your product;
. determine which foreign markets will be the most
penetrable;
. define and narrow those export markets you intend to
pursue;
. talk to U.S. customers doing business internationally;
. research export efforts of U.S. competitors.

Classifying your product
The Standard Industrial Classification (SIC) code is the system by which the United States government classifies its goods and services.

Knowing the proper code for your product or service can be useful in
collecting and analyzing data available in the United States.
Data originating from outside the United States -- or information available from international organizations -- are organized under the Standard International Trade Classification (SITC) system, which may assign a different code to your product or service.

Another method of classifying products for export is the Harmonized System (HS). Knowing the HS classification number, the SIC and the SITC codes for your product is essential to obtaining domestic and international trade and tariff information. DOC and USDA trade specialists can assist in identifying the codes for your products. The United States Bureau of the Census (USBC) can help identify the HS number for your product.

Finding countries with the largest and fastest growing markets for your product
At this stage of your research, you should consider where your
domestic competitors are exporting. Trade associations can often provide data on where companies in a particular industry sector are exporting their products. The three largest markets for U.S. products are Canada, Japan and Mexico. Yet these countries may not be the largest markets for your product.

Three key United States government databases can identify those
countries which represent significant export potential for your product: SBA's Automated Trade Locator Assistance System (SBAtlas), Foreign Trade Report FT925 and the U.S. Department of Commerce's National Trade Data Bank (NTDB).

SBA's Automated Trade Locator Assistance System (SBAtlas) is offered only by the U.S. Small Business Administration and provides current market information to SBA clients on world markets suitable for their products and services. This valuable research tool supplies small business exporters with information about where their products are being bought and sold and which countries offer the largest markets. The Country Reports detail products imported and exported by various foreign nations. Data are supplied by the DOC's USBC and member nations of the United Nations. This information can be obtained through a SCORE counselor at the SBA District and Regional Offices and at SBDCs and SBIs. This service is free to requesting small businesses.

Foreign Trade Report FT925 gives a monthly country-specific breakdown of imports and exports by SITC number. Available by subscription from the Government Printing Office, the FT925 can also be obtained through DOC ITA offices.

The National Trade Data Bank (NTDB) contains more than 100,000 U.S. government documents on export promotion and international economic information. With the NTDB, you can conduct databank searches on country and product information. NTDB can be purchased by subscription and used with a CD-ROM reader, or can be used at Federal libraries throughout the United States. DOC ITA offices will also conduct specific NTDB searches to meet your foreign market research needs.

Once you learn which are the largest markets for your products,
determine which are the fastest growing markets. Find out what demographic patterns and cultural considerations will affect your market penetration.

Several publications provide geographic and demographic statistical information pertinent to your product: The World Factbook, produced by the Central Intelligence Agency; World Population, published by DOC's USBC; The World Bank Atlas, available from the World Bank; and the International Trade Statistics Yearbook of the United Nations. Volume Two of this U.N. publication (available at many libraries) lists international demand for commodities over a five-year period.

DETERMINING THE MOST PENETRABLE MARKETS

Once you have defined and narrowed a few prospective foreign markets for your product, you will need to examine them in detail. At this stage you should ask the following questions:

. how does the quality of your product or service compare
with that of goods already available in your target
foreign markets?
. is your price competitive in the markets you are
considering?
. who are your major customers?

Answering these questions may seem overwhelming at first, but many resources are available to help you select which foreign markets are most conducive to selling your product.

The DOC's ITA can link you with specific foreign markets. ITA offices are part of the US&FCS and communicate directly with FCS officers working in United States Embassies worldwide.

FCS staff and in-country market research firms produce in-depth
reports on selected products and industries that can answer many of your questions regarding foreign market penetration.

One small business exporter who regularly uses foreign market
information obtained through the DOC's US&FCS is Fabri-Quilt Inc. of North Kansas City, Missouri.

According to Fabri-Quilt President Lionel Kunst, "When I decide to enter a foreign market, the Commerce Department ITA office in Missouri sends information on my company to the Foreign Commercial Service Officer in the country where I want to export. They send me back information on that particular country and even make appointments for me when I decide to visit the market myself." Of the product line Fabri-Quilt exports, 25 percent of their sales can be attributed to exporting.

You can also order a comparison shopping service report through ITA district offices. The report is a low-cost way to conduct research without having to leave the United States.

SBA's and DOC's Export Legal Assistance Network (ELAN) provides new exporters with answers to their initial legal questions. Local attorneys volunteer, on a one-time basis, to counsel small businesses to address their export-related legal questions. These attorneys can address questions pertaining to contract negotiations, licensing, credit collections procedures and documentation. There is no charge for this one-time service, available through SBA or DOC district offices.

Trade Opportunities Program (TOPs) of the DOC can furnish U.S. small businesses with trade leads from foreign companies that want to buy or represent their products or services. These trade leads are available in both electronic or printed form from the DOC. Participating companies must pay a modest fee to gain access to this service.

Other important issues about the target foreign markets you should explore are:
. political risk considerations,
. the cultural environment, and
. whether any product modifications, such as packaging or
labelling, will make the product more "exportable."

One U.S. poultry producer discovered it had to modify its product to make it more palatable to Japanese consumers:

Atlanta-based Gold Kist Inc. found that, to be successful in Japan, they needed to cut and package their chicken parts to meet Japanese consumer preferences. That change required substantial modification in Gold Kist's operations. The alteration paid off: Gold Kist's Don Sands reports, "In 1988, we shipped 5.3 million pounds of poultry to Japan, 9 million in 1989 and 12 million in 1990."

Identifying market-specific issues is easily accomplished by
contacting foreign government representatives in the United States.
Commercial posts of foreign governments located within embassies and
consulates can assist you in obtaining specific market and product
information.

American Chambers of Commerce (AmChams) abroad can also be an
invaluable resource. As affiliates of the United States Chamber of
Commerce, 61 AmChams, located in 55 countries, collect and disseminate extensive information on foreign markets. While membership fees are usually required, the small investment can be worth it for the information received.

Another fundamental question to ask country-specific experts is what market barriers, such as tariffs or import restrictions (sometimes referred to as non-tariff barriers), exist for your product? Specialists at U.S. Trade Representative (USTR) should be consulted on trade barriers.

Tariffs are taxes imposed on imported goods. In many cases, tariffs raise the price of imported goods to the level of domestic goods. Often tariffs become barriers to imported products because the amount of tax imposed makes it impossible for exporters to profitably sell their products in foreign markets.

Non-tariff barriers are laws or regulations that a country enacts to protect domestic industries against foreign competition. Such non-tariff barriers may include subsidies for domestic goods, import quotas or regulations on import quality.

To determine the rate of duty, you will need to identify the
Harmonized Tariff section which corresponds to the product you wish to export. Each country has its own schedule of duty rates corresponding to the section of the Harmonized System of Tariff Nomenclature, I-XXII.

DEFINING WHICH MARKETS TO PURSUE

Once you know the largest, fastest growing and most penetrable markets for your product or service, you must then define your export strategy.

Do not choose too many markets. For most small businesses, three foreign markets will be more than enough, initially. You may want to test one market and then move on to secondary markets as your "exportise" develops. Focusing on regional, geographic clusters of countries can also be more cost effective than choosing markets scattered around the globe.

After you have identified the best export markets, your next step will be to determine the best way to distribute your product abroad. Chapter 3, "Market Entry," discusses distribution methods.

ITCC Historical Highlights

Collaborating for Shared Success
by Bruce Braker, President - TMA

Comments from the Tooling and Manufacturing Association president:

"Collaborate: To work together on a common enterprise"

Manufacturers collaborate in many effective ways. They join trade associations like TMA and jointly purchase services such as group insurance. They pool their resources to provide employee education and training opportunities.

Prime contractors outsource to subcontractors to gain price and capability advantages without having to commit to in-house capacity. Contract manufacturers partner with suppliers and customers to link an effective supply chain. Yet rarely do manufacturing peers collaborate at a significant level. Rarely do competitors collaborate. They should and here's how.

Non-competing producers of components and tooling can gain significant advantages through information sharing. Short run stampers can work with long run stampers. Large part precision machining companies can collaborate with small part machinists. Die companies can work with mold companies. Die casters can work with plastic molders. What are the common needs of these companies? How can they together meet their common needs cost effectively in a timely manner?

Even competing companies can collaborate. They can share resources, new marketing intelligence, capacity, personnel, CAD systems, even customers. They just have to have the attitude, "it's us against the world."

Let's focus on shared marketing intelligence. How many $2 million sales contract manufacturers can afford a high-priced market researcher? Let's say for example a high priced market researcher costs $100,000 a year. For a $2 million company that's 5% of sales. In a good year that 5% is the whole bottom line. Let's say five $2 million in sales companies buy that same market researcher's time. Now the cost is spread over $10 million in sales. For one percent of sales that market research might be a good deal.

What does market research entail? Research identifies high potential market sectors, the needs of those market sectors, the OEM and various tier market sector leaders, the needs of individual companies and their buying patterns, names of the decision makers within those companies, and the future global plans of those companies.

When doing this type of research many of the discoveries are of little value to the company paying for the research. It's like panning for gold. Much of the information is worthless, but every so often a nugget is found. But one person's rock is another's nugget. Most of the information is valuable to someone. There are some opportunities for synergy here. Most of the research will be useful to someone in the group. More of the information is useful when five companies are sifting though it.

Much of market research is data mining. Data mining might include telemarketing to identify and qualify potential customers. It could include Internet surfing or database purchases. It's a matter of doing significant grunt work to provide a starting point for the sales staff. The process of prospect qualification is a time consuming and expensive activity that many companies don't even bother to do. Maybe more companies will seek market information if they only have to pay for 20% of the cost.

How does this process work?

Five companies with like values who trust each other join together to direct marketing research. Some or all of those companies could be competitors. It doesn't matter, the shared activity still works. Each company follows up on the data and attempts to solicit requests for quote. When making sales calls non-competitors should cross-market for each other. Competitors should be open to jobs that exceed any one group member's capacity because now two or more can work on it.

TMA will assist in assembling groups and in finding resources for each group. In return for these services TMA will mark up services purchased by each group. If a group were to commit to a full-time researcher, TMA would provide temporary full-time employment to the contractor and bill the participants monthly.

Learn about collaboration by attending an interactive workshop on the strategy of collaboration on June 25 from 2:00 to 5:00 p.m. at TMA. Registration form is with this Bulletin. Price is $50 per person.

These comments were first published in the TMA News Bulletin, May 30, 2003.

Transforming Your Company for Global Success - Part 2 – The Basics of Global Trade
by Michael L. Hetzel, VP Mktg & Sales - E•D•S Intl

In Part 1 (ITCC Articles, 17 March 2003) we had a look at some of the cultural and general aspects of using global trade to strengthen U.S. manufacturing companies. I attempted to shake loose some of the misinformation that has led to hopeless feelings of fatalism and futility for manufacturers in the U.S. and set a course for rational, rather than emotional, evaluation of strategic options. In this article, I’ll provide some information on the mechanics of organizing and initiating a global manufacturing strategy.

Capacity Utilization
There’s not a lot more to say here except that a manufacturing company that’s not exploiting their capitalization on a 24/7 basis will be at a disadvantage against local competition much less against competition from low cost foreign countries. One comment I’ve repeatedly received from tooling companies in particular is that they can’t find toolmakers to work nights. Although this certainly is a genuine problem, it’s also time that industry professionals (and not just toolmakers) realize that the nightshift is far better than no job at all.

There are three primary strategies to optimize capacity utilization. The first is through lights out manufacturing techniques, which of course requires some significant capital investment. The second is to staff nights and weekends for continuous operations. The third is a combination of the first two; reducing staffing requirements overall while balancing capital costs (automation) against overhead (labor).

It helps to offer incentives for night personnel beyond the usual shift premium, such as more flexible schedules. Many potential nightshift employees are motivated to offset such issues as childcare and working spouse schedules, however night hours are logistically less tolerant of personal schedule disruptions such as sick children. The four-shift 12/12 schedule can be effectively focused as an incentive for many workers because of the additional free time afforded by the off days (3 days off one week, 4 days off the next) that result. This approach is certainly not new, and has been in successful use by many companies employing highly skilled workers for many years.

Rotating schedules can be effective in some cases, having some or all of your day and night workers exchange shifts periodically, such as every quarter. This approach has long been in use successfully by police departments across the U.S. (although they frequently change shifts monthly) and ends the objection to being “buried on the graveyard shift.”

Strategic Outsourcing
The concept is simple: increase your ROI by capturing revenues and profits outside of and beyond your capitalization structure by outsourcing selected projects to lower cost suppliers, leverage the most important aspects of your customer relationships (typically project engineering and management) and control the access to your customers of lower cost suppliers as well as remove the motivation of your customers to seek out the lower cost suppliers on their own.

Most OEMs have a range of price sensitivity for their various projects. With a sound outsourcing strategy, you can offer them their full spectrum of price positions with the added incentive that they don’t have to develop and manage additional suppliers themselves. This fits perfectly with the vendor base reduction initiatives of most larger companies, and can be used effectively to capture new business as well as to retain existing customers.

There are three primary outsourcing structures: opening a wholly owned offshore subsidiary or joint venture (JV); creating one or more strategic supplier alliances; and/or working with an agent.

We won’t spend time here reviewing subsidiaries and JVs, since these are out of reach financially for most companies and too complex to be properly covered in this article. Also, even if affordable, subsidiaries and JVs are “static logistics” compared to the great agility and flexibility offered by alliances or agent supported procurement, “dynamic logistics,” where you have the ability to move swiftly from one supplier to another in the face of changing project demands and market forces.

Qualifying Suppliers
Supplier alliances are direct relationships, frequently with several suppliers, each most efficient at supplying different segments of your outsourcing requirements. A proven approach to developing offshore supplier alliances follows:

1. Identify the source countries that are most cost effective in your industry. This is often quite easy to do, since you probably already heard this information from your former customers as they migrated their business to meet their pricing objectives. Similar information can be obtained from trade associations, who are able to collect it from their members. There are also some good web sites for country research, including: <www.asia-pacific.com>, <www.executiveplanet.com>, <www.fita.org>, <www.globalsources.com>, <www.webofculture.com>, and <www.worldbiz.com>
2. After selecting source country options, contact the trade mission or consulate from that country in the nearest major U.S. city to your location. These foreign missions are here for a reason, to increase trade with the U.S., and they are highly motivated to help you identify competent sources in their country. Also, study the business and social customs of the source countries in preparation for contact, so you optimize the initial communications and avoid cultural gaffs.
3. Contact the potential suppliers with a structured inquiry regarding their services, technology and equipment. Ask for photographs of their facility and construct your inquiry document using the common technical English for your industry. Send the same inquiry to all prospective suppliers. This inquiry will serve to establish two important requirements for moving forward; first that the candidate company has the equipment and infrastructure needed to support your projects, and second that they are able to effectively communicate with you using the “technical English” that is critical to your success. Now you can eliminate those without the technical capacities, and also eliminate those with communications problems.
4. Send at least three (or more as needed) blind test RFQ’s representing the range of projects that you intend to source to the finalists and have them quote. Don’t tell them that these are tests, or you may see low price levels that you’ll never see again. Compare price positions and select the finalist(s) for further dialog. You’ll find that different companies are more competitive in different projects, just like in the U.S.
5. Communicate your quality expectations, procedures and metrics. Companies who outsource often engage third party inspection firms to represent them periodically at the source location, as well as to initially audit candidate suppliers, which is much less costly than flying back and forth. One such company is Pro QC International (the parent company of E.D.S. International), who you can visit at: <www.proqc.com>. These companies can also provide translation and negotiation assistance using local personnel, and assist with your business and cultural research for the target countries. One note about third party inspection firms; if the firm you select is also an ISO9000 registrar (Pro QC and several others are not, but some are) then you may want to avoid having them inspect at source companies they have registered, since there can be some conflicting pressure of expectations (e.g. “They must be good, we registered them.”) for the audit performance of the source.
6. Negotiate terms and conditions as well as develop the communications protocols needed to work in a timely fashion, after which you will need to visit the suppliers to examine their operations and begin the personal phase of the relationship and build the commitment needed on both sides for the longer supply chain to be effectively managed.
7. Find an international bank with experience and a presence in the country or countries you’ve selected. This is important for optimizing your financial transactions with the suppliers and minimizing your transaction costs. These bankers can also assist somewhat with your business and cultural research for the target countries.
8. Consider engaging an international law practice with experience in your source country. This is not essential in many cases, where you find good alignment of terms and expectations with your suppliers, but it is prudent to have this resource available if you plan to enter into any contracts beyond simple purchase orders. Many companies conduct successful offshore sourcing operations over many years without legal assistance, but you will need to determine any need for this specifically for your transactions. As a rule, when in doubt have a competent attorney check it out.
9. Start your first order out with a project that won’t damage your company or client if it’s delayed, as you debug the communications and workmanship aspects of the relationship, then build from there.

Keep in mind that this is an overview, guidance on the relevant activities, not a detailed checklist. No one is going to become a global sourcing expert by reading this or any other magazine article; you need to build a framework of knowledge for global trade just as for any other business practice. Whenever possible you should consult with someone who has direct experience. It also appears to be a lot of effort, and it is, but it’s worth the effort when you begin to capture new business and conserve your existing customers, and it certainly beats going out of business.

One item to note relates to offshore suppliers who provide local representation in the U.S. These companies are often competent, but the extra layer of cost precludes your capture of the best price position. Also, companies with U.S. representation are chasing your competitors (and possibly your customers) as well as you, while the sources without the U.S. presence are more likely to provide the best cost and less likely to develop these competitive conflicts in your home market.

Qualifying Agents
Agents come in many forms, such as independent representatives, trading companies and buyer’s agents. Those suppliers with independent representatives in the U.S. present the same potential problems as those with their own sales offices in the U.S., which we described above. Trading companies can be effective, but will usually attempt to match you with suppliers already in their “stable” rather than locate the best supplier for your current requirements, which works well only if there happens to be a good match available for all of your projects.

A qualified buyer’s agent will conduct all of the activities described in 1-9 above, while operating from a posture with priorities that are aligned exclusively with the buyer’s requirements, and maintaining an independent, third party position regarding suppliers when your different projects demand different sources. They also provide complete project management resources and will typically cost less than buying direct, once you calculate the total cost of procurement, since they often have a stronger negotiating position than individual companies and they typically have local employees directly representing your interests in the source countries.

To qualify a buyer’s agent:
1. Confirm that the candidate agents are not sales representatives or trading companies with contractual obligations to sellers.
2. Select an agent with appropriate engineering disciplines represented at both ends of the supply chain as well as quality resources at the source location. You can also retain a third party inspection firm independently of the agent, just as you would with a direct alliance structure, but in this format the agent is your alliance partner and will usually manage this activity for you as well.
3. Compare agents with a presence in different potential source countries to fully research your best quality, price and logistics options. Many agents conduct sourcing in various countries, allowing you to develop a single agent relationship for all of your requirements.
4. Follow items 4, 5, 6 and 9 from the alliance guidelines above. Using an agent who is a U.S. corporation typically doesn’t require the use of an attorney any more than other domestic purchasing transactions, another savings point when using agents.

With a qualified buyer’s agent, you simply furnish the same RFQ that you would to any domestic supplier and they do the rest. The company I am with, E.D.S. International, Inc., <www.eds-international.com>, is an example of a buyer’s agent with global sourcing, engineering and quality resources. Others can be located through Internet and business listing research.

Combinations of these options are also successfully employed, such as building direct alliances in some locations while using a buyer’s agent in others, or using the agent initially to gain experience, then finding your own alliance partners at a later point (Although agent contractual relationships will preclude doing an “end-run” around the agent to work directly with their sources. You’ll need to find new sources if you decide to leave the agent and go it alone).

Exporting
To be blunt, the common claim that our government doesn’t support U.S. businesses who want to export, while foreign governments support their manufacturers, is completely false. Not only does the U.S. federal government provide worldwide offshore trade missions like the foreign missions you will contact in the U.S. to find your own sources (Item 2 under supplier alliances), so do most of the states, several larger counties and some metro areas. Further, the Export-Import Bank of the United States (their name is inaccurate, they only provide export services) provides export project financing, transactional services and receivables protection at costs that can actually make exporting less risky than selling in the U.S.!

Exporting is rather simple in practice. You conduct all of the same marketing activities that you use in the U.S., factoring in the cultural and business factors of the target country’s marketplace, while engaging these excellent government resources to aid you with the international elements. The following is only an overview of the many government resources available to manufacturers. Call the listed contacts or go to the web sites for the complete picture.

1. The U.S. Department of Commerce Export Assistance Center. This is your “macro” resource. Go to <www.usatrade.gov> and <www.export.gov> and be pleasantly surprised. This agency will conduct overview market research among 140 countries at no charge. Then, for your specific target markets, the research fee is approximately $600.00 (That’s no typo – only $600.00 – although it can vary somewhat in certain circumstances). They have offices across the U.S. and around the world. In the Chicago area, call Mary Joyce or Connie Tinner at 312-353-8045.
2. In Illinois we have the Illinois Trade Office (Other states have their own versions of this). They provide local, state and international assistance through statewide offices, and will promote your offerings worldwide through their field offices in various countries. Go to <www.illinoistrade.org> for a comprehensive look at their services and office locations across Illinois and global locations.
3. The Export-Import Bank of the United States can be visited at <www.exim.gov>. They are co-located in Chicago with the U.S. Export Assistance Center.
4. Here in Chicago-Cook County, IL, we also have the Chicago-Cook Business Center, again providing an array of services that includes direct export assistance and strategic partner matchmaking services. Visit them at <www.chicago-cook.org> or call Sidney Salvadori at 312-603-1070.

The services of these agencies are comprehensive and far reaching. Just to list them in this article would take up enormous space. Prepare yourself for the most exciting array of government services for business that you’ve never heard of. You’ll wonder who started this nonsense that U.S. manufacturers receive no governmental export assistance!

Besides government, additional and significant resources for learning global business practices reside in community and other colleges. Here in the Chicago area alone we have numerous institutions offering comprehensive courses designed to provide the depth of knowledge needed to fully and successfully exploit all of the initiatives we’ve outlined above. These courses are often taught by practicing global trade professionals, and convey value well beyond their (typically) modest cost. Be sure to review the local college resources in your area as part of your preparation for launching your global business initiative.

Here’s a message to those who are right now thinking or saying “we’re just a die caster, there are thousands of us so there is no export market for us.” If you’re saying that you are misinformed. Die casting operations (and plastic molding, metal stamping, tool and die making, etc) may be as common as gas stations here in the U.S., but this is simply not so elsewhere across the world. Many of these companies are exporting, even to China.

Although it’s true that not every company will be able to export, every company can outsource, and if you don’t undertake the initiative to develop a global strategy and contact these agencies to thoroughly explore the world markets you have only yourself, not the Chinese or anyone else, to blame for your failure to successfully participate in global business.

Logistics
Whether you’re outsourcing (importing) or exporting, logistics plays a vital role in your success and can create enormous problems if not properly managed. Here, all but the very largest companies rely on outside suppliers for this critical activity.

Ric Frantz, CEO of Wood Dale, IL based logistics firm LR International, Inc. (<www.lrinternational.com>), has provided some useful insights on the role and activities of your logistics partner. He explains that “we spend half our day answering questions about documentation, transactions or general counseling for our clients,” a critical service for their success. “You want a company that will create a system (a way to effect your transactions) for you, rather than have you conform to their system” he continues, “and to provide all support work for your transactions, such as compliance to regulations and proper routing and insurance to move your product expeditiously and economically, while you concentrate on your expertise, selling your product.”

Common errors in logistics include misclassification of imported goods, which can lead to later adjustments and penalties, or failure to properly insure shipments for all risks, such as the little known risk that shippers with cargo on board are the ones responsible for the cost of a lost ship, not the shipping line or ship owners.

Besides the advice above, look for the following when selecting a logistics firm:

1. Forwarders must be licensed by the Federal Maritime Commission (Part of DOT).
2. Confirm that they have adequate professional liability insurance coverage for your activities.
3. If they are customs brokers, they must have a license from the Treasury Department.
4. A good company solves the misclassification problem by obtaining a “customs binding rule” in anticipation of your traffic. Confirm this service with your candidate suppliers.
5. They need to have an office or agent relationship in the offshore ports that you will be moving traffic through.

Aligning your company with a good logistics provider will prevent the occurrence of many of the nightmare scenarios that have contributed to the myth that “U.S. manufacturers can’t export.”

Conclusion
There are many factors that will affect your success in business, global and local, some that you can control and some you cannot. Failing to fully exploit the competitive potential of your company in the global business environment, through operational initiatives as well as both strategic sourcing and exporting initiatives, is under your control, not the control of “foreigners” who are repeatedly and unfairly blamed for our failure as a nation to innovate in the face of the continuously shifting global marketplace.

As we pointed out in the previous article, there certainly are trade imbalances and unfair practices that occur in world trade, just as there are those domestically that occur here in the U.S. These issues need to be addressed in the long term, but there is plenty of opportunity out there right now for those who set aside their anger, fear and other emotions and apply the same Yankee Ingenuity to our global business practices that we used to put the U.S. economy at the top of the industrialized world in the first place.

Michael L. Hetzel is VP/Marketing & Sales for E•D•S International, Inc. of McHenry, IL, a provider of strategic outsourcing services with operations in 31 countries, and a member of the ITCC Board of Directors. He can be reached by phone at 708-710-5935 or at: mlhetzel@eds-international.com.

This article first appeared in the 4/03 issue of Die Casting Industry Links magazine, the monthly publication of the North American Die Casting Association.

[in Italian] Strategie di vendita in USA - Aziende Italiane medio/piccole - Settore della subfornitura
by Mattia Prian, U.S. Manager - Gnutti Cirillo SpA

Per un imprenditore Italiano, abituato a competere in un mercato come quello Europeo, altamente frastagliato, socialmente e culturalmente disomogeneo, il mercato USA rappresenta un campo di battaglia ideale, dove sono evidenti i vantaggi di una burocrazia e di un sistema fiscale/legale particolarmente snelli.

Sono molte le ragioni che rendono il mercato Nord Americano particolarmente attraente:

• Le dimensioni e la ricchezza del mercato accompagnato da uno standard di vita elevato.
• Il prestigio di competere nel mercato piu’ importante.
• L’omogeneita’ di lingua, di cultura, del sistema fiscale e legale.
• Le infrastrutture adeguate ed in continuo miglioramento.
• Una moneta unica.
• La solidita’ del mercato e delle istituzioni.
• Uno sbocco naturale da un mercato europeo stagnante
• La presenza della concorrenza europea/italiana

Nonostante il Nord America sia un mercato ideale, per i motivi sopra elencati, non si puo’ fare a meno di notare le difficolta’ che le aziende medio/piccole Italiane incontrano nel tentativo di affermarsi.

I motivi principali che rendono ardua l’affermazione in questo scenario sono:

• Il mercato USA e’ maturo, molto sviluppato.
• La competizione e’ agguerrita.
• Gli standard di qualita’ europei e le certificazioni europee non sono in genere riconosciute.
• Le aziende non accettano prodotti di qualita’ inferiore a quello gia’ esistente e si aspettano prodotti, servizi e prezzi paragonabili a quelli offerti almeno dai fornitori USA.
• A parte per alcuni settori particolari tipo quello alimentare e del design, gli Americani sono essenzialmente tradizionalisti.

A mio avviso gli insuccessi sono spiegabili nella impreparazione con la quale molte aziende italiane si presentano negli USA. Impreparazione dovuta a motivi spesso riconducibili a errori di sottovalutazione della concorrenza, di rigidita’ e/o di mancanza di un investimento adeguato.

Armarsi di modestia
Affermare che “la nostra qualita’ e’ superiore” vale poco nel mercato piu’ competitivo al mondo. La presentazione commerciale ha nella qualita’ dei prodotti un punto di partenza e non di arrivo. Semmai il problema che deve porsi un imprenditore Italiano e’ come provare ai potenziali clienti la qualita’ dei propri prodotti. Dall’altra parte, affermare di essere i leader italiani e/o europei, come molte aziendi italiane fanno, e’ spesso vano. La controparte statunitense non ha una conoscenza approfondita del mercato europeo e tantomeno di quello italiano. L’affermazione non ha gli effetti desiderati anzi, al contrario puo’ dare alla controparte una sensazione controproducente di superiorita’.

Essere flessibili
Un sistema di vendita e post vendita che ha dato e che da’ risultati commercialmente significativi nel vecchio continente potrebbe non essere adatto al mercato USA. Le aziende italiane che hanno riscontrato successo sono quelle che si sono adattate al mercato e che non hanno imposto il loro sistema per quanto vincente si sia dimostrato in Europa. Alcune aziende italiane hanno rifiutato di iniziare un rapporto con le grandi catene di vendita al dettaglio perche’ le stesse impongono ai fornitori di ritirare, a proprie spese, la merce restituita dai clienti. Si calcola che il 10% delle vendite al dettaglio sia restituita e completamente rimborsata al cliente “no questions asked.” L’imprenditore dovra’ adattare i servizi offerti in funzione della dimensione del cliente. Se per esempio il target sono aziende USA di piccole dimensioni che non hanno la capacita’ ne’ l’esperienza per organizzare spedizioni oceaniche, si dovra’ offrire i propri articoli con consegna DDP (trasporto, dazi ed operazioni doganali a carico dell’azienda italiana) e non imporre una consegna “ex work” (trasporto, dazi ed operazioni doganali a carico dell’azienda USA).

E’ importante inoltre sottolineare che sempre piu’ spesso le aziende USA richiedono un sistema di consegna/pagamento a “consigment” che prevede il pagamento delle merci solo ad avvenuto utilizzo del cliente e comunque dopo il loro prelievo da un magazzino in USA.

Non sottovalutare la concorrenza che non si conosce
Il mercato USA ha subito nell’utimo decennio una vera e propria invasione di aziende orientali che ha messo in crisi la media piccola industria locale non in grado di competere a livello di costi di produzione. L’errore delle piccole medie aziende USA e’ di aver sottovalutato il fenomeno e di avere cercato in seguito di arginarlo abassando i margini di guadagno. L’inefficacia di questa politica si e’ ripercossa in seguito compromettendo lo sviluppo e la ricerca su nuovi prodotti. A parte alcuni tentativi sporadici e molto contradittori attuati dal governo USA (vedi l’attuale innalzamento dei dazi doganali sull’acciaio) non sembra che ci sia l’interesse a contenere tale invasione. A riprova di questo fatto, le maggiori aziende USA hanno aperto siti produttivi in paesi dove la manodopera e’ a bassissimo costo, tipicamente la Cina o il Messico.

Come valutare la propria competitivita’?
Uno degli errori che le aziende italiane commettono e’ di dimenticarsi di porsi la domande piu’ ovvie:

- Esiste un mercato per i nostri prodotti negli USA? E qual’e’ il suo volume?
- Quali sono i vantaggi che la mia azienda puo’ offrire rispetto alla concorrenza?
- Una volta identificati i vantaggi, come li possiamo trasmettere ai potenziali clienti USA?

Spesso aziende Italiane di piccole e medie dimensioni non hanno una strategia di marketing e di vendita. A volte il nome, la tradizione, la riconosciuta qualita’ ha permesso di evitare un impegno serio in tale direzione.

Un passo fondamentale per valutare la propria competitivita’ negli USA, ed a cui non si puo prescindere, e’ una ricerca di mercato. Piu’ impegno, risorse e investivementi si indirizzano su questa voce, maggiori sono le probabilita’ di successo e minori i rischi di spreco futuro di risorse.

Una ricerca molto economica puo’ esser effettuata consultando il world wide web e le statistiche che il Ministero del Commercio USA fornisce mensilmente sulle importazioni (divise in paesi di provenienza e codice merceologico).

A mio avviso, incaricare una azienda USA di redigere una ricerca di mercato puo’ non essere vantaggioso. A parte i costi esorbitanti (dai 30mila ai 50 mila dollari) spesso le aziende private che effettuano tali ricerche non sono cosi’ specializzate nel settore industriale di interesse come spesso vogliono far credere. Si rischia di ricevere un lavoro con poche informazioni utili.

Potrebbe essere piu’ vantaggioso affidare l’incarico ad una persona esperta ed appoggiarsi ad istituzioni ed organizzazioni “non-profit” locali, quali le Agenzie Pubbliche di Sviluppo Economico e di Commercio Estero Americane (www.export.gov a livello federale o, per esempio, www.chicago-cook.org a livello locale), o le Camere di Commercio Italo Americane all'estero (www.italchambers.net), che essendo delle associazioni di operatori locali, sono fortemente radicate nel territorio in cui operano e possono risultare molto utili sia per i servizi che sono in grado di erogare direttamente che per i contatti che possono fornire localmente. A tal proposito mi riferisco ai contatti non solo con operatori locali specializzati ma anche con le istituzioni locali che si occupano di fornire assistenza alle aziende, informazioni tecniche e di supportare gli investitori esteri attraverso gli strumenti e gli incentivi da loro forniti. Infine, anche gli uffici ICE (www.ice.it) offrono servizi di assistenza alle aziende italiane nei mercati esteri. Queste stesse organizzazioni possono garantire una rapida operativita’ affiancando all’incaricato Italiano un assistente statunitense.

Per coprire il mercato USA ed aspettarsi informazioni attendibili occorre prevedere un soggiorno di almeno tre mesi. Le informazioni piu’ importanti si ricevono visitando personalmente potenziali clienti, concorrenti, fiere ed altri eventi simili. Gli scopi di una ricerca di mercato sono:

• Verificare l’esistenza e prevedere il trend del mercato di riferimento per i propri prodotti, calcolarne il volume (le associazioni dei produttori USA sono in genere in grado di fornire numeri accurati).
• Studiare la concorrenza USA ed internazionale. La concorrenza e’ strutturata ed organizzata diversamente da quella che si trova in Europa. Verificare la presenza di aziende orientali (Cina, Taiwan, India, Indonesia, Tailandia, Corea) spesso accusate di innondare i mercati di prodotti a prezzi irrisori.
• Determinare i punti di forza e di debolezza dei propri prodotti.
• Determinare di quali innovazioni abbia bisogno il mercato.
• Iniziare contatti con potenziali clienti, puntando sulla visita dell’aziende quando possibile.
• Verificare quali norme occorre rispettare e quali certificazioni e omologazioni sono necessarie.
• Determinare il dazio doganale (Harmonized Tariff Schedule of the United States, disponibile gratuitamente su internet).
• Determinare la posizione geografica dei potenziali clienti, in funzione di una possible costituzione di una filiale Nord Americana.

Investire? E quanto?
In America si usa dire che il costo finale di un investimento sul mercato segue la “law of double: double the costs and double the time.” Le risorse economiche, umane ed tempistiche che una azienda italiana deve investire per avere una chance concreta nel mercato USA sono considerevoli.

Sfortunatemente, le varie missioni in USA organizzate da Istituzioni Italiane, per quanto siano organizzate in buona fede, servono a poco. L’esposizione di cataloghi nelle “catalogoteche” delle principali fiere in USA o peggio, l’invio degli stessi dall’Italia ad aziende USA che non ne hanno fatto specifica richiesta, non danno in genere alcun risultato. Si e’ calcolato che un buyer statunitense riceva circa cinquanta telefonate al giorno da possibili fornitori ed una decina di brochure. A nostro avviso, l’unico approccio che garantisce risultati e’ la visita personale di un proprio incaricato.

Tradizionalmente le aziende medio/piccole italiane si affidano ad agenti e/o distributori locali. Questa scelta e’ spesso dettata dall’esigenza di evitare rischiosi investimenti in un mercato che non si conosce (vedi ricerca di mercato). Effettivamente l’agenzia di vendita e/o distributori rappresentano soluzioni che possono sembrare, a primo acchito, economicamente vantaggiose.

A parte la difficolta’ nel trovare agenti e/o distributori adeguati, una scelta in tal senso comporta molti svantaggi:
Mancanza di controllo sull’operato. Gli agenti e le forze vendita dei distributori si concentrano sulle linee che danno un profitto immediato e sui settori industriali di loro maggiore competenza.
La post vendita, fondamentale nel Nord America per mantenere un cliente, viene spesso trascurata.

Sviluppo del business. In genere gli agenti non investono su una linea nuova e spesso non condividono con l’azienda mandante le informazioni raccolte sul mercato.

Scarsa conoscenza del prodotto, soprattutto per quello ad alto contenuto tecnologico.

In caso di disaccordo tra un agente USA ed l’azienda mandante Italiana le leggi locali tendono a tutelare gli interessi dell’agente.
Fedelta’. Gli agenti, sempre a causa della necessita’ di immediato riscontro, tendono a cambiare aziende rappresentate. A loro volta le aziende mandanti non rivelano all’agente il know how tecnico, limitando cosi’ la capacita’ di penetrazione nel mercato stesso.

Un’altra soluzione spesso cercata e’ la creazione di una joint venture con una azienda locale o con un’altra azienda italiana gia’ inserita nel mercato Nord Americano.

La costituzione di una sede statunitense
Come spesso accade nel mondo imprenditoriale, i risultati migliori si ottengono investendo nel lungo termine. Questa soluzione e’ di gran lunga piu’ onerosa, ma consente una serie di vantaggi non indifferenti:

• Il controllo diretto del mercato
• Il contatto diretto con i clienti
• Il prestigio di gestire una azienda USA

La costituzione di una sede, o sussidiaria Nord Americana, proccupa non poco, spesso ingiustificatamente, gli imprenditori italiani a digiuno di burocrazia statunitense.

Costituizione legale
Uno studio legale, coadiuvato da un commercialista (che possono essere raccomandati dalle Camere di Commercio Italo Americane locali), in genere non impiega piu’ di 24 ore per l’inoltro delle pratiche necessarie alla costituzione dell’azienda. I costi sono certamente meno impegnativi di quelli normalmente richiesti in Italia. Lo studio legale dovra’ presentare e concertare con l’azienda italiana la scelta piu’ idonea, in base ai fini commerciali perseguiti, tra le possibili forme giuridiche dell’impresa USA.

• Branch, impresa USA direttamente gestita dall’azienda Italiana che ne risponde a tutti gli effetti.
• Corporation, impresa locale di persone o capitali a responsabilita’ limitata
• Limited Liability Partnership, che offre ai suoi membri diversi livelli di responsabilita’.

La doppia imposizione sui redditi
Questo aspetto fiscale e’ regolato dal Trattato (del 25 agosto 1999) contro le doppie imposizioni sul reddito tra l’Italia e gli USA.

L’organizzazione della sede USA
Con lo scopo di rendere l’mpresa USA immediatamente operativa, l’azienda Italiana dovra’ delegare ad un proprio dipendente o ad una persona fidata la gestione sul luogo (per almeno un anno) delle operazioni. L’azienda Italiana dovra’ basare la sua scelta su un candidato che dia le garanzie di immediata operativita’. Aver provato una buona capacita’ commerciale sul mercato Italiano e’ una condizione forse necessaria ma sicuramente non sufficiente. Il candidato, oltre all’indispensabile conoscenza tecnica del prodotto e della lingua inglese scritta e parlata, dovra’ dimostrare di possedere flessibilita’, adattabilita’, interesse a vivere in un paese straniero anche per lunghi periodi e capacita’ comunicativa con la casa madre.

L’azienda Italiana dovra’ determinare gli obiettivi che per il primo anno dovranno concentrarsi su:

• La realizzazione di una adeguata strategia promozionale e di business.
• L’ introduzione nel mercato dei prodotti.
• I contatti personali e diretti con i clienti.
• Lo sviluppo di un adeguato servizio di assistenza e post-vendita.
• La selezione, l’addestramento ed il controllo sugli eventuali agenti o distributori.
• L’avviamento ed il mantenimento di un sistema comunicativo efficace e costante con la casa madre.

L’azienda Italiana dovra’ dare massima attenzione alle richieste provenienti dall’incaricato sul luogo, dimostrando soprattutto la flessibilita’ che il mercato richiede.

Dopo aver raggiunto ha raggiunto una certa solidita’ finanziaria, una adeguata conoscenza e penetrazione nel mercato, la struttura organizzativa puo’ cambiare delegando i poteri ad un incaricato di origine locale che dovra’ rispondere direttamente al titolare o al Direttore Vendite dell’azienda Italiana.

L’autore ringrazia per la valente collaborazione il Dott. Aldo Caronia, Presidente della Romanticatours, Inc. <www.romanticatours.com>.

Dott. Mattia Prian
mprian@gnutticirillo.com>
L’autore si e’ laureato in Chimica Industriale presso l’Universita’ degli Studi di Ca’ Foscari di Venezia ed ha conseguito un Master of Science in Chimica presso la DePaul University di Chicago. Ha maturato esperienza internazionale svolgendo diverse mansioni per aziende Italiane in USA ed Americane In Italia. Attualmente dirige le attivita’ della filiale statunitense di un noto gruppo industriale italiano.

Mattia Prian is a member of the ITCC.

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