Politics drives economic policy and economic policy guides business decisions. Its critically important during geopolitical influenced economic uncertainties that we minimize assumptions and emotional biases to our products and companies and make data driven decisions and choices.

These decisions should be based on facts derived from keen research and analytics and a logical thought process. There is no shortcut, you need to do or contract-out the work.

Focusing on Southeast Asia markets

After living in Singapore and working throughout the Asia Pacific region for more than 20-years, I offer my opinion based on my experience and expertise to help companies navigate the inherent challenges and barriers and  successfully compete and win in the fastest growing region on the planet.

In particular, the ASEAN, Indo-Pacific, or Southeast Asia region has emerged as the global growth engine of the next decade and beyond.

Companies worldwide should be pivoting to the region to take advantage of new and emerging growth opportunities.

Export is crucially important to any growth-minded company. It establishes the first step to entering a new market. As your business scales you can decide upon progressive steps like establishing a local sales office, bonded warehouse, or local manufacturing. In most cases exporting leads to foreign direct investment (FDI) in local manufacturing assets, either greenfield or acquisition.

Southeast Asia is not a homogenous marketplace. Each country is a different ecosystem, with its own vibe and set of preferences, values and norms. New entrants must be capable of understanding and embracing social and cultural diversity.

One-size-fits-all cookie-cutter strategies fail in Southeast Asia, – you need to tailor your approach to each unique market.

Don’t just adapt to Southeast Asia, become a part of it. Take the time to understand the culture, the history, and the emotions behind customer buying behaviors.

Getting started with market research

So where do you start? The first step is to identify, validate and quantify opportunities, and determine your company’s export readiness. The second step is to craft your market(s) entry or go-to-market strategy and business plan – think of strategy as your logic and compass, and your plan the roadmap or process.

The third step is to develop a distribution network capable of reaching your target customers. If you’re selling B2B2C you need channel partners. This article will delve into the first step of evaluating export markets for your business.

Finding the best sources of secondary research

Normally, when I approach a new research assignment, I purchase two industry reports. A typical and focused market survey or industry report will cost between $2,000.00 – $3,000.00 US.

Industry reports are a market assessment tool that provide a comprehensive examination of a particular industry in specific countries.

In my Indonesia example below (figure 1), the company wants to sell its fiber cement exterior finishing products. The total market volume for exterior finishing products is 79 million M², fiber cement products represent 4% of the total market volume. The company’s addressable market in Indonesia is 3.16 million M². I then convert volume into economic value, (volume x wholesale cost per M².) Most reports will provide compounded and annual growth rates and trends.

Other valuable sources for secondary data are Export Development Canada (EDC),  Asia Bank, IMF, government websites, Channel News Asia, and a few of my favorites that require a subscription are Nikkei Asia, Oxford Business Group, Focus Economics. I also use a segment specific project and leads directory when needed – as an example in the Asia Pacific construction segment I use BCI Asia. Secondary research data can cost between $8,000.00 – $10,000.00 US, depending on the scope of the research project.

Presuming we now have loads of secondary data, the data now needs to be translated into quantifiable, meaningful and useful information that can be shared and understood cross-functionally.

Analyze your data using the PESTLE model

One of the most useful analytical tools to evaluate markets is the PESTLE model, (Political, Economic, Social & Cultural, Technology, Legal, and Environmental factors.)

The PESTLE tool has evolved over the years, starting as a PEST analysis more than 20 years ago, then to the SLEPT analysis, and to what is used today the PESTLE analysis. An interesting and important addition is the Environmental factors.

The importance of Environmental factors and compliancy and how this can be leveraged or translated into differentiation and customer value should not be underestimated.

Southeast Asia customers make brand choices based on personal value perceptions and the environmental benefits and impact of your products. In addition to the PESTLE model, I use a weighted scorecard to visually organize and present my findings.

In my abbreviated example below (figure 2) I am only comparing three countries, all countries under consideration must be evaluated. Each main factor will have five to ten sub-factors. Each sub-factor is weighted on importance and given a score, the scores are tallied, then each main factor is calculated. In my example the total score for Singapore main factor political is 36.

We then create a graph chart (figure 3) to visualize our comparative and quantitative analysis. Every company’s analysis will differ due to different metrics or criteria. Each company will also have a threshold, in my example my minimum threshold value is 120, so Indonesia and Singapore would be selected as my target markets for further evaluation.

Further evaluation would come in the form of primary data collection, so get your passport ready, you need to travel to meet the potential customers you intend to sell to.

Get your passport ready for primary research

The best source for primary data collection is “voice of customers” (VOC), and I am a strong supporter of trade shows in the Southeast Asia region. However, trade shows are expensive, and the merit of a trade shows needs to be carefully considered.

In the post-Covid environment trade show costs have increased to pre-Covid levels. Trade show space and booth design cost will vary, I try to cap this cost at $15,000 US. You also need to consider travel expenses, and that cost could be $10,000 per week including airfare.

Considering this, we need to establish clear and attainable goals or outcomes to justify the expense. For me my goals are to:

1. understand the market and customers and begin building relationships
2. interview potential customers
3. identify key competitors, and
4. recruit distribution and channel partners.

I have learned from past experience to add a week post trade show to follow up with contacts and prospects gleaned from the event.

As an example, prior to Vietnam’s economic awakening, we identified Vietnam as a rising economy and attractive market. We attended a relevant trade show and then the following week was filled with business development activities, visiting potential distributors and customers, and we appointed two new distributors.

At this point we have conducted our initial PESTLE analysis through secondary data collection, participated in our first overseas trade show, visited potential customers and channel partners, and we can now amend our PESTLE analysis based on the more comprehensive information gleaned from our overseas trip. Next, we need to assess our capabilities and ensure we are correctly positioned and aligned to capitalize on the opportunities uncovered. Are we export ready?

Evaluating your export readiness

Being export ready is more than a mindset, it’s a commitment of resources and funding to support a successful export endeavor. The export ready self-evaluation process will help define your strategy and plans. FITT’s Feasibility of International Trade course provides thorough and contemporary training on how to assess organizational readiness. Typical questions

• Are you willing to invest in resources, people, time and capital without an immediate return on investment (ROI)?
• Will your pricing strategy enable you to compete profitably?
• Is product customization required to meet specific market or customer needs?
• Are your products compliant to relevant codes or standards?
• A new one for me recently, will your bar-codes scan in overseas markets?
• If exporting to a non-FTA country, what is the duty impact to market pricing and profitability for you and your partners?
• What are your trade terms and conditions, do you need credit insurance?
• Have you established clear, relevant, and attainable goals?
• Do you have senior leadership and cross-functional support?
• Do you have an international freight forwarder?
• Do you have experience with export documentation, do you understand incoterms?

Each company is unique and will have specific questions relevant to their business and chosen markets. Go beyond the superficial qualitative narrative and translate the data into actionable quantitative information.

The next step is to craft your market-entry strategy and business plan. Remember each market is unique, and the Southeast Asia marketplace is not just about products and price-points, it’s about people and relationships founded on symbiotic trust, confidence and collaborative partnerships.

I will share my thoughts on strategy and plans in my next article.

For more valuable tips and concepts follow me on FITT, LinkedIn, or my website.

These books cover vital subjects like supply chain management, geopolitics, leadership, business strategies, the AI economy, cultural diversity, and the historical context of global trade, offering valuable perspectives for navigating the complexities of the worldwide market.

1. The Culture Map: Breaking Through the Invisible Boundaries of Global Business by Erin Meyer

Erin Meyer’s book “The Culture Map” explores cultural differences in the workplace, emphasizing the importance of understanding nuances for effective communication and collaboration. She introduces “authentic flexibility” for adapting to diverse cultures while staying true to oneself. The book provides insights on virtual communication in multicultural teams and offers practical tips for successful cross-cultural interactions. Meyer’s work is a valuable resource for enhancing intercultural competence and succeeding in diverse professional environments.

2. The Value of Everything: Making and Taking in the Global Economy by Mariana Mazzucato

The Value of Everything” by Mariana Mazzucato critiques how economic value is measured and the blurred line between value creation and extraction in the global financial system. The book examines cases from Silicon Valley to pharma, illustrating how this confusion impacts innovation and inequality. Mazzucato calls for a re-evaluation of capitalism, public policy, and value measurement to promote sustainable economic growth. She challenges the idea that market prices reflect true value and argues for a re-politicization of value as a social and political concept. Professionals importing or exporting are well versed in the myriad of complexities in valuing products, services and components. This book offers a fascinating perspective on the whole system.

3. How the World Ran Out of Everything: Inside the Global Supply Chain by Peter S. Goodman

The book “How the World Ran Out of Everything” by journalist Peter S. Goodman explores the complexities and vulnerabilities of the global supply chain. Through gripping storytelling, Goodman exposes the intricate pathways of manufacturing and transportation that bring products to our doorsteps, while also unveiling the ruthless business practices that have left local communities vulnerable to disruptions. Highlighting recent events like the pandemic-induced shortages, Goodman illustrates how financial interests, market opacity, and deteriorating working conditions have placed the supply chain on the brink of collapse. By following the journeys of individuals from factories in Asia to striking railroad workers in Texas, Goodman advocates for a reformation of the supply chain to ensure reliability and resilience.

4. Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life, in Organisms, Cities, Economies, and Companies by Geoffrey West

Geoffrey West, a pioneering physicist in complexity science, unveils the hidden laws governing the life cycle of diverse systems, from living organisms to cities. Contrary to the complexity of these systems, West’s discoveries reveal an underlying simplicity that unites them. By applying the rigor of physics to questions of biology and mortality, West found that mammals, despite their diversity, follow scaling laws that relate their size to various biological characteristics. This groundbreaking insight extends beyond biology to include cities and businesses, where similar laws of scalability apply. West’s work offers a unique perspective on the fundamental principles governing diverse systems, relevant for professionals working in global business. “Scale” is a captivating journey through fundamental natural laws that connect us all in profound yet straightforward ways, illuminating how cities, companies, and life itself are governed by the same principles.

5. Pivot: The Only Move That Matters is Your Next One by Jenny Blake

If change is the only constant, let’s get better at it.

In “Pivot: The Art and Science of Reinventing Your Career and Life,” Jenny Blake, a former career development manager at Google, shares practical strategies for navigating career transitions effectively. In today’s dynamic economy, where job roles change frequently and career plateaus are common, Jenny Blake introduces the concept of the “pivot” as a way to methodically make your next career move. Drawing from her experience in Silicon Valley and as a career consultant, Blake presents the Pivot Method, a framework for taking small, strategic steps towards a new direction in your career. Whether you’re considering a new role, starting your own business, or transitioning to a new industry, this book provides actionable advice to help you move forward with confidence.

With practical guidance and real-life examples, Blake empowers readers to embrace change and chart a path towards greater career satisfaction and success.

6. The International Business Culture Pathfinder: A Practical Guide to Navigating Cultural Differences in Global Markets by Marvin Hough

Written by experienced CITP Marvin Hough, The International Business Culture Pathfinder is a collection of concise business culture guides for 11 countries, including Brazil, Canada, China, UAE, South Africa and more.

This book provides a comprehensive overview of each nation’s business landscape, cultural traits, and practical scenarios demonstrate the impact of culture on business. Whether you are a seasoned global business professional or just embarking on your international journey, this resource is indispensable for grasping negotiations, communication norms, relationships, management approaches, and time management in varied cultural settings.

7. Power And Prediction: The Disruptive Economics of Artificial Intelligence by Avi Goldfarb, Ajay Agrawal and Joshua Gans

In “Power and Prediction: The Disruptive Economics of Artificial Intelligence,” Avi Goldfarb explores the “Between Times” of AI evolution, highlighting the necessity for systemic changes in decision-making processes within organizations. Despite the transformative potential of AI, its widespread adoption has been delayed, akin to past technological revolutions such as electricity and computing. Goldfarb stresses the need for complementary innovations alongside AI advancements.

8. Dare to Lead: Brave Work. Tough Conversations. Whole Hearts by Brené Brown

Leadership goes beyond titles, status, and authority. A true leader is someone who takes on the responsibility of identifying potential in individuals and ideas and has the bravery to nurture that potential.

Renowned author Brené Brown, a four-time #1 New York Times bestseller, has dedicated decades to studying emotions and experiences that add value to our lives. For the past seven years, she has collaborated with transformative leaders and teams worldwide. In her book “Dare to Lead,” she delves into how courageous leadership entails recognizing potential, staying open-minded, sharing power, and embracing vulnerability. The book stresses the importance of cultivating human qualities like empathy, connection, and courage in a society dominated by scarcity and fear. It presents four essential skill sets for courageous leadership and advocates for choosing courage over comfort.

From the humblest middle manager to the CEO of a fortune 500 company, anyone who wants to lead effectively could learn from this book.

9. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail by Ray Dalio

A few years ago, Ray Dalio observed unique political and economic conditions, leading to his exploration of repeating patterns in wealth and power shifts over the last 500 years.

“Principles for Coping with the Evolving World Order” delves into the most tumultuous economic and political eras in history to explain why the future is expected to be markedly distinct from our own experiences, yet reminiscent of past occurrences.

Ray Dalio discusses unique circumstances leading to global changes and offers advice on navigating upcoming challenges. Dalio’s analysis covers major empires and historical patterns to provide practical principles for preparing for the future.

For professionals working in international trade, navigating the turbulent geopolitical and economic environment is part of the job. Learning more context for how things evolve may just help you get ahead of the curve.

10. Prisoners of Geography: Ten Maps That Expla in Everything About the World by Tim Marshall

Journalist Tim Marshall’s book “Prisoners of Geography” explores how physical characteristics of countries like Russia, China, the US, Latin America, the Middle East, Africa, Europe, Japan, Korea, and Greenland and the Arctic, their strengths, vulnerabilities, and leaders’ decisions. In ten chapters and ten maps, the book delves into geopolitics and how geography shapes global strategies and historical events. It highlights the impact of geography on nations’ destinies and provides a fresh perspective on world affairs, something that is incredibly helpful for anyone doing business in foreign markets.

Knowledge is power, and continuous learning is the cornerstone of success in the evolving world of international trade. Share with us your top reads in 2024!

While every business is unique, taking inventory of what worked for other successful enterprises, and what didn’t, can help you keep your business on the right track and even boost it to the next level of profitability, growth, and customer approval ratings.

Keep in mind: learning from mistakes doesn’t just apply to our personal lives.

Let’s take a look at common mistakes international businesses make, and how trade finance can relieve some of the financial stresses that come with the territory of being an entrepreneur:

1. Poor cash flow management, the #1 reason small businesses fail

So many parts of running a business rely on a healthy cash flow. Working capital is not only used to cover everyday expenses like payroll and electricity, but it is also needed to pursue bigger plans like growth and expansion into new markets.

There are a couple of factors that can impair cash flow, however, leaving a company with a lower reserve of liquidity than it would like.

In fact, according to a report from Jessie Hagen, previously of US bank, 82% of failed small and medium-sized businesses went under due to poor cash flow management.

Too much growth, too little capital

Growing too much, too quickly, in some cases, can actually be detrimental for a business. Rapid growth may have the adverse effect of drying up cash and might ultimately send a business hurling towards bankruptcy.

This, in fact, happened to the ice cream brand Ample Hills, based in Brooklyn, New York. The company grew from a single local scoop shop to having a footprint of 17 stores nationwide, links with Disney, a presence in grocery retail outlets, and a stamp of approval from Oprah Winfrey, according to the New York Times. Though this brand never ended up expanding overseas, rapid growth without the right support can hurt businesses trading internationally just the same.

Brian Smith, Ample’s co-founder, revealed to the Times, “We made every mistake it is possible to make.”

This included an ill-placed location in Los Angeles and switching up packaging from a traditional round container to a square one. Even with the Ample Hills brand skyrocketing to success, decisions like these ultimately sapped the company’s cash.

Trading with long payment terms in place without the right oversight and support

While the demands of rapid growth may be one culprit for leaving a company cash-strapped, long payment terms with buyers can also drain a company’s liquidity if not managed correctly.

Today, many commercial transactions occur on open account terms, which means buyers are allowed to pay their bills months after an invoice is generated.

Recent data shows that large U.S. buyers take an average of 54.7 days to pay their invoices.

While giving customers the freedom to pay later can help a business win and retain orders, a company must be vigilant of the cash gap that can occur with such terms in place. Many businesses may find themselves needing to pay their vendors upfront, while still waiting on payment for their sales.

Without a keen awareness of the overlap in outgoing and incoming payments, cash flow might be jeopardized.

2. Selling domestically or internationally without having the demand needed to succeed

It can be the aspiration of many growing companies to expand domestically, or even enter new markets abroad. But without the demand overseas or at home, your product may turn out to be a flop.

According to a recent Forbes article titled “Small Business Statistics of 2024”, inadequate market demand is the second most common culprit for business failure.

Inadequate market demand is the second most common culprit for business failure.

“For a small business to be successful, it’s imperative not only to have adequate capital to sustain operations in the early stages but also to ensure there is a consistent and growing demand for its products or services,” the article states.

Given this common mistake, it’s imperative to conduct sufficient due diligence before launching a new product or service. A business must take the necessary steps, like conducting a market gap analysis and gaining a full grasp of the demographics they’re trying to reach, in order to set itself up for success.

3. Skipping credit protection

As we’ve seen in the past couple of years, several big-box retailers have gone out of business. These famously include Bed Bath & Beyond, Christmas Tree Shop, and Lord & Taylor.

When doing business with these large buyers, credit protection can come in handy if bankruptcy is looming for the retailer.

It’s not always easy to predict if a retailer will shutter, but the pandemic taught us that large brands can go bankrupt, and if they don’t fully collapse, then they can still be tardy on their payments to suppliers or skip paying them completely.

How trade finance can help businesses stay the course

Trade finance is a tool that can help businesses better manage their cash flow, reduce trade risk, and accelerate their growth, among other things. Companies of all sizes can take advantage of this financial resource, but small and medium-sized enterprises are especially known to benefit, since traditional banks may require them to meet stricter borrowing criteria.

If a business opts to use trade finance services, here’s how it works:

A financial intermediary will purchase their unpaid invoices and will provide them cash upfront in exchange. This sum of cash will equal up to 95% of the invoice amount.

By receiving this cash advance on the payment they are owed, a business can pay their own supplier on time, or on an earlier schedule. Retailers and other buyers can still enjoy longer windows to pay their invoices since the financial intermediary is able to close the payment gap.

What’s more, trade finance also includes credit protection and collections services.

This means that a business is guaranteed to get paid even in the case of buyer insolvency, as the financial intermediary absorbs the risk in this case and will ensure the business gets paid.

Since running a business requires a lot of focus on marketing, R&D, and customer service, accounts receivable management that comes as part of trade finance packages can take the burden of collecting payment from customers off the business.

The Upshot

Operating a business has its challenges, but it also comes with many rewards. Paying attention to the mistakes that other businesses have made can certainly protect a company from falling into the same pattern.

To get a better handle on cash flow, secure an extra layer of security, and get more freedom to focus on running core business activities, a company can consider trade finance as a solution that can clear hurdles and pave the way for success.

With a recession being predicted to hit the U.S. economy in late 2023 and early 2024, the job market is slowing down as fears continue to mount. The tech industry in particular contributed to mass layoffs this year, driven by some of the biggest names in the world including Microsoft, Meta, Google, Yahoo, Amazon etc.

Google’s parent company Alphabet reduced their workforce by approximately 12,000 roles. CEO Sundar Pichai wrote in a letter to Google employees “we hired for a different economic reality than the one we face today.”

The global economy is slowly recovering from the aftereffects of the COVID-19 pandemic and grappling with situations like regional conflicts and disrupted trade routes. This also means that the international trade landscape is evolving drastically and so is job insecurity.

In such a dynamic job market, there are certain roles that are growing increasingly popular. The demand for skilled professionals in these job roles is skyrocketing.

So, if you’re looking for jobs with good scope and stability globally, consider exploring international trade. Let’s look at some of the fastest growing international trade jobs in 2023 globally and how you can break into these thriving sectors.

Marketing international trade jobs

The global marketing landscape is more diverse than ever before. A career in marketing usually involves good pay and quick growth. According to the U.S. Bureau of Labor Statistics there is expected to be a 10% employment growth rate for marketing managers from 2021 to 2031. Professionals who understand international markets and consumer behavior are in high demand. Here are some of the most in demand global trade jobs that in the  marketing sector.

1.    Global Growth Manager

As an increasing number of businesses continue to expand globally, the demand for multifaceted professionals who can identify and capitalize on opportunities for expanding businesses internationally is greater than ever. Forbes talks about hiring the right leaders as one of the keys to getting global expansion right. Here is where Global Growth Managers come into the picture. They meticulously research market dynamics, consumer behavior, and emerging trends to formulate strategic plans for global expansion. By leveraging data-driven insights to navigate international business landscapes, they are indispensable assets in the quest for sustained global growth.

2.    International Business Development Executive

International Business Development Executives are instrumental in fostering global growth for companies operating in today’s interconnected world. Their job role involves nurturing strategic partnerships, collaborations, and alliances with businesses and organizations worldwide. With a deep understanding of international markets and the skills needed to identify new business opportunities in various regions and industries, these executives are at the forefront of forging international connections and creating synergies in the global marketplace.

E-commerce international trade jobs

E-commerce has become a cornerstone of international trade. With global e-commerce expected to show an annual growth rate of 11.17% from 2023 till 2027, it’s safe to say that it’s a thriving industry. Hence, it’s no surprise that the demand for skilled professionals to fill e-commerce jobs is at an all-time high right now. So, let’s explore some jobs that are increasingly growing in demand in e-commerce.

3.    E-commerce Operations Manager

At a time when e-commerce is thriving, E-commerce Operations Managers act as the driving force behind the seamless functioning of online businesses across borders. The U.S. Bureau of Labor Statistics reports that approximately 2,300 new jobs will be added for general and operations managers in e-commerce between 2016 and 2026. E-commerce Operations Managers are responsible for orchestrating and optimizing the day-to-day operations of e-commerce platforms, ensuring efficient order processing, inventory management, and timely delivery to customers around the world.

4.    E-commerce Business Analyst

Analytics is taking the world by storm and more businesses are recognizing the importance of leveraging big data in their expansion strategies. According to the World DataScience Initiative, about 80% of global enterprises are investing in a data analytics division, creating a great demand for analysts. E-commerce platforms collect a wealth of data and here is where E-commerce Business Analysts come into the picture. They are responsible for deciphering and decoding data and transforming it into actionable insights that drive strategic decisions. They are the analytical minds behind the success of international online businesses.

5.    E-commerce Project Manager

Project Managers are a crucial part of every organization and industry and e-commerce is no exception. The Project Management Institute’s ‘Project Management Job Growth and Talent Gap 2017–2027’ report predicts that by 2027, employers will need nearly 88 million individuals in project management-oriented roles. E-commerce Project Managers take on the responsibility of planning, executing, and overseeing critical e-commerce initiatives. Their role is pivotal in delivering projects on time and within budget, which is a necessity in today’s rapidly evolving e-commerce landscape.

International supply chain jobs

The supply chain sector is the backbone of international trade – transactions within global supply chains account for 76% of world trade. This is why it comes as no surprise that in today’s rapidly evolving global marketplace, supply chain professionals are at the forefront of ensuring that businesses can adapt, grow, and remain competitive. Here’s an in-depth look at the top supply chain jobs that are growing in prominence.

6.    Director of Procurement

Procurement is an essential aspect of the supply chain and the role of Director of Procurement is a crucial one. These individuals are responsible for securing the necessary materials and resources for businesses to operate on an international scale. This includes sourcing products globally, negotiating contracts, and managing supplier relationships.

7.    Supply Chain Analyst

Several predictions highlight that the demand for supply chain graduates will go through the roof in the next two years due to the fragility of global supply chains. Those will the skills of a Supply Chain Analyst should have no trouble landing a position. Supply Chain Analysts are experts who gather and analyze data on inventory, transportation, and production to identify bottlenecks and inefficiencies. They use this data to make informed decisions that enhance the supply chain’s efficiency and responsiveness to market changes.

8.    Process Improvement Manager

Process Improvement Manager is a relatively new job role but one that is rapidly growing in popularity. Their key responsibility is to find ways to enhance the overall efficiency of supply chain operations. They do this by identifying opportunities for streamlining processes, reducing waste, and improving the overall productivity of the supply chain. By implementing Lean and Six Sigma principles, they strive to drive continuous improvement, in an effort to make supply chains more agile and cost-effective.

International trade finance jobs

The finance sector in international trade has grown leaps and bounds over the past decade, with professionals playing a pivotal role in both financial management and technological adaptation. Diverse job opportunities and the integration of technology into financial practices means that the finance sector offers a promising career path for those seeking to navigate the financial frontier of international trade. Let’s look at some roles gaining more attention.

9.    Financial Risk Analyst

According to the Association for Financial Professionals Risk Survey, financial risks were among the top four risks having the greatest impact on earnings in the next three years. Financial risks can often make or break a business and this is where the role of Financial Risk Analysts becomes crucial. These professionals identify and manage the financial risks associated with international trade, including currency fluctuations, credit risk, and market volatility. They also curate risk management strategies to protect businesses from adverse financial events and help them navigate the complexities of international markets.

10.    Fintech Consultant

With the global fintech market being expected to reach a market value of $326 billion by 2026, the need to leverage this innovative technology in international trade is becoming imperative. Fintech Consultants help businesses achieve this by advising them on how to harness financial technology (fintech) solutions to improve their international trade operations. They help companies adopt digital payment systems, blockchain, and AI-powered financial tools to enhance efficiency and reduce costs.

Navigating the fast-growing world of international trade jobs

International trade is flourishing and so are opportunities for those equipped with the right skills and knowledge. If you have the right training and credentials, you’re one step closer to landing one of these lucrative jobs. Invest in specialized education, such as degrees in supply chain management or finance, to get the foundational knowledge needed to excel in these fields.

In addition to that, credentials that show you have knowledge and skills in key competency areas of international trade will give you a competitive advantage in this job market.

Staying informed about the latest industry trends and global market developments is also crucial. Follow trade organizations on social media (we recommend connecting with FITT’s growing LinkedIn community), sign up for industry newsletters, and look for networking events in your area.

Lastly, hone your language skills, especially if you want to land import and export jobs, as proficiency in multiple languages can enhance your appeal to global employers. Once you have developed the skills to grow your global trade career, the world of international trade jobs is yours to explore.

In the aftermath of a global pandemic and with the context of shifting geopolitical landscapes nations struggle with what looks like slowing trade. In this article we examine the current state of global trade, weighing the optimistic strides made against a backdrop of challenges.

Progress in August

First, the good news – it looks like significant progress in global trade growth was made in August, as several factors appear to support broader international trade – according to the WTO’s August 2023 trade report.

For example, Ukraine has initiated a significant move by opening a “humanitarian corridor” in the Black Sea for cargo ships. It’s a marked change when considering the recent collapse of the Black Sea Grain Initiative: Russia’s exit from the grain initiative and its subsequent blockade on Ukraine.

On a broader trade front, the WTO stated in the same report that services trade is witnessing what looks like more robust growth compared to merchandise trade. This difference is particularly accentuated thanks to export restrictions on key goods, including food and fertilizers.

In fact since 2020, there has been a significant increase in export restrictions. For instance, 63 such restrictions are in place for food, feed, and fertilizers.

Last year, the services trade saw a remarkable 15% boost, decisively outperforming the 2.7% growth in merchandise trade.

When combined, the total trade experienced a 13% surge, accumulating to an impressive $31 trillion.

Challenges in many corners

Diving deeper into global trade intricacies, we see a few pinch points – including a reminder of how physical pinch points such as the Suez and the Panama Canal can restrict global trade.

A severe drought at the Panama Canal is causing significant disruptions to global trade. In practice cargo ships have waited for extended periods, sometimes several weeks, to traverse the canal – which delayed cargo significantly, and led to a build-up of vessels.

The Panama Canal Authority (ACP) has had to limit the number of vessels using the canal and impose restrictions on ships’ depth, limiting the cargo they can carry, due to water scarcity. The ongoing drought situation is described as presenting “unprecedented challenges”.

The canal, which connects almost 2,000 ports across 170 countries, is pivotal for international trade, with major traffic from across the globe but in particular countries such as the United States, China, and Japan.

The drought’s impact on the canal emphasizes the increasingly disruptive consequences of the climate crisis on global supply chains.

Trade volume under policy pressure

China, a major player in the world’s economic scenario, registered a sharp decline in both exports, by 14.5%, and imports, by 12.4%, in July. One event that may have contributed is the US decision to curtail its investments in some pivotal Chinese tech sectors.

Also in the East, Japan and Qatar are keenly focused on strengthening their trade ties, but there’s a cloud of uncertainty between Japan and the US due to disagreements over whaling practices.

The changing global climate has also been exerting pressure on trade. Rising temperatures have escalated food prices, with soybeans, olive oil, and rice facing severe shortages.

The emphasis on climate-aligned foreign direct investment (FDI) is now seen arguably at the core of sustainable growth of developing nations.

A noteworthy development from the West is the recent downgrading of the US’s long-term credit rating, which poses intriguing questions about the behemoth economy’s future borrowing and investment capabilities.

IMF comment underlines global concerns

In the aftermath of a global pandemic, the world finds itself grappling with unprecedented challenges. Recent research from the Kansas City Federal Reserve paints a challenging picture of the post-pandemic global economy, highlighting issues like soaring government debt, geopolitical tensions, and an unsettling trajectory for technological innovation.

With the backdrop of geopolitical disruptions like the Russian invasion of Ukraine and escalating U.S.-China tensions, global trade appears to stand at a tough crossroads.

Pierre-Olivier Gourinchas, the International Monetary Fund’s chief economist, underscores the fragility of the current state, noting that countries are drained after battling the pandemic, and that policy-driven forces and decoupling between China and the West add further strain.

The looming danger is a possible stagnation where parts of the world fail to progress, leading to demographic and migration pressures. Economists, including Gourinchas, believe that global growth might stagnate around 3%, a disappointing rate compared to the past where China’s rapid development drove figures above 4%.

Existing trends amplified by COVID-19

The impact of the pandemic amplified certain pre-existing trends. A paper by Serkan Arslanalp of the IMF and Barry Eichengreen from the University of California, Berkeley, reveals a troubling statistic: the ratio of public debt to global economic output surged to 60%.

This was largely driven by pandemic spending by governments. Such unsustainable levels of debt threaten to divert vital resources away from developing nations that have burgeoning populations but lack capital.

Recent geopolitical events, notably the Russian aggression against Ukraine, have also fragmented the longstanding belief that trade fosters lasting international partnerships.

COVID-19 had, of course, a huge impact on global trade flows and arguably became a movement where many participants in global trade decided that near-shoring is also the equivalent of de-risking.

It led to a pattern of nearshoring but World Trade Organization Director-General Ngozi Okonjo-Iweala cautions against the current trend of reordering global production patterns. While diversifying trade might seem appealing, it’s essential to extend opportunities to those nations historically sidelined in the global trade arena.

What does global growth look like?

Global economic growth is a natural driver of trade growth. From an economic standpoint, recent economic projections from the IMF shows global growth decelerating, with projections declining from 3.5% in 2022 to 3.0% for 2023 and 2024.

Although inflation in developed economies shows signs of slowing, trade volumes are down. Manufacturing sectors worldwide are experiencing a slowdown, and while services are expanding, there’s noticeable deceleration.

The ripple effects of the pandemic also extend to the future of work, affecting urban economies. Demand for office spaces in major cities like New York, London, and San Francisco is dwindling, with average office attendance dropping significantly.

In general it could be suggested that global growth is somewhat anemic – and there are also signs that China may not offer much support in the near future.

Debt may continue to weigh on trade

Despite the myriad challenges facing global trade, and an ongoing recession threat, it’s worth considering the resilience shown by key economies. Growth in certain sectors, like the services trade, offer a beacon of hope.

The commitment of nations to navigate these complex issues, combined with the need to diversify and include historically sidelined nations, has the potential to reshape and strengthen global trade patterns for a more inclusive and prosperous future.

For organizations dependent on global trade it therefore depends on the ability to harness opportunities – which, though under pressure, will still be out there to harness.

Canada, being the world’s second-largest country in terms of land size, boasts an abundance of natural resources. This rich landscape offers a wealth of water, underground treasures, and harvests vital for global momentum. Yet, when we look at the economy, Canada appears smaller. Its economy is ten times smaller than that of our neighbor to the south. As a G7 member, Canada possesses the smallest real GDP among its peers. There are about 1.3 million Canadian businesses; however, fewer than 5% are export-ready.

According to Innovation, Science, and Economic Development Canada’s annual report, exports drive Canada’s economic growth and correlate with real GDP growth. Moreover, exports allow businesses to expand beyond Canada’s modest domestic market.

But there’s a catch: few Canadian businesses export, and of those, over 85% heavily rely on the US market.

This over-reliance becomes uncomfortable considering external factors like the Buy American Act and severe competition, which diminishes the appeal of exporting.

The aim of this article isn’t to deter but to spotlight the value of an export strategy, urging Canadian businesses to look EAST – namely, the Indo-Pacific Region.

Why Indo-Pacific?

The Indo-Pacific region, with its 40 economies and over four billion people, amounts to CAD in economic activity, making it the world’s fastest-growing region. By 2040, the region will account for over half of the world’s GDP and more than 65% of its population.

Recognizing this, the Canadian government unveiled its Indo-Pacific strategy in late 2022, signaling a shift in export direction and resource allocation. For Canadian businesses, seizing this opportunity not only ensures sustainable growth but also bolsters the national economy for future generations.

However, every opportunity presents challenges. Penetrating a new market, especially an exotic one, isn’t simple. But Canada has an edge – strong ties to the region. Thanks to our immigration policy, 20% of Canadians have sort of connections there. Additionally, Canadian products have historically been well-received. An effective approach for Canadian businesses is to capitalize on e-commerce as a market-entry strategy.

The Indo-Pacific e-Market

The expansive realms of the Indo-Pacific market are responsible for an overwhelming 90% of the global e-commerce growth. Adopting cross-border e-commerce as a market-entry strategy therefore stands out as not just practical but crucially essential. The evidence is compelling:

The e-commerce market of Greater China alone dwarfs many, equal to three times Canada’s entire GDP.

Powerhouse brands such as Alibaba and JD.com are not merely platforms but are reshaping the very fabric of consumer behavior. As we gaze towards Japan, the transformation becomes even clearer. The island nation has seen its e-commerce landscape grow by nearly 30% in the share of retail distribution. Platforms like Rakuten and Amazon Japan have stepped up as the new-age shopping titans, gradually overshadowing traditional retail outlets.

South Korea’s digital footprint is equally noteworthy. In a span of five years, from 2017 to 2022, the nation’s cross-border e-commerce market made a remarkable leap, soaring from US$ 2 billion to a staggering US$ 4.5 billion. The success stories of platforms like Coupang and Gmarket illuminate this trajectory, with an average annual growth rate of 23%.

And then there’s Singapore, a beacon for the Southeast Asian e-commerce domain, dubbed  the “e-commerce gateway” to its larger region. Projections suggest that eCommerce sales in this region will skyrocket, possibly quadrupling from US$ 38 billion in 2019 to an expected US$ 172 billion by 2025. This, combined with the fact that 70% of the region’s population is now online, paints a vivid picture of the digital revolution in play.

With the inherent characteristics of e-commerce, from the invaluable real-life data tracking to the immediacy of end consumer interaction, it is rapidly establishing itself as the preferred channel for market exploration.

Given the sheer purchasing power and wide acceptance among consumers, e-commerce isn’t just another platform; it can be the core of your omnichannel strategy. Such a strategy can seamlessly dovetail with traditional channels like physical stores, offering an enhanced customer experience. This synergistic approach, when infused with the allure of authentic Canadian products, promises not just sustainability but a pronounced edge in the competitive marketplace.

3 Steps to Develop Your E-Commerce Strategy for the Indo-Pacific

So far, we have delved deep into the macro-level benefits of leveraging e-commerce to enter the Indo-Pacific region. Moving forward, I want to introduce a tailored framework that can guide your e-commerce strategy development.

Think of it as a three-step process designed to provide a clear pathway: from integrating your business into the region’s e-commerce ecosystem to managing e-commerce operations and marketing activities once you’re established.

1. Strategizing

This initial phase is all about exploration. Dive deep into understanding your export readiness, assessing the feasibility of potential markets, studying the competitive landscape across both traditional and digital channels, identifying risks, formulating the most effective pricing strategy, and forecasting your financial performance.

• Readiness and Feasibility Analysis: Begin by evaluating your business’s readiness to venture into the Indo-Pacific e-markets. This entails an assessment of internal capabilities, gauging the product-market fit, and pinpointing potential barriers.
• Pricing Strategy Development: Weigh various pricing models, from cost-plus to competitive pricing. Consider aspects like local purchasing power, competitive landscape, import duties, and taxes.
• Financial Performance Analysis: Project potential revenue streams, costs, and profit margins. Account for initial investments, sustained operational costs, and expected returns.
• Market-Entry Strategy Compilation: Decide on your entry strategy. Are you targeting a couple of countries first or aiming for a more expansive reach? Your resources, willingness to take risks, and market insights will guide this decision.

2. Integrating

The foreign e-commerce markets you’re targeting operate on platforms that might be unfamiliar to western businesses and occasionally aren’t even accessible via common channels like Google. There’s also the challenge of navigating diverse cultures and languages. Not to mention ensuring the protection of your product ideas and brand. This stage emphasizes ensuring you’re on the right platforms, effectively reaching your target audience, communicating appropriately, and operating within legal confines.

• Platform Application Management: Determine the e-commerce platforms that dominate in your target Indo-Pacific areas. Think Alibaba and Lazada, but also keep an eye out for niche platforms tailored to specific locales or products.
• Ecosystem Onboarding & Integration: Grasp the entire e-commerce ecosystem of the region, which encompasses payment methods, delivery mechanisms, and review systems.
• Brand & Marketing Material Adaptation: Localize your branding. It’s more than just translation; it’s about resonating with local traditions, sentiments, and values.
• IP Protection Measures: Intellectual property norms can differ significantly across markets. Ensure you’re compliant by familiarizing yourself with local regulations.
• Platform Configuration & Optimization: Customize your online store to align with local preferences. This might mean adjusting your site’s design, improving its mobile-friendly features, or incorporating region-specific functionalities.

3. Managing Day-to-Day Operations

E-commerce operations in overseas markets, akin to the one in Canada, demand regular oversight and consistent nurturing. Navigating multiple, especially as vast as several Asian e-markets, can be tricky. Challenges range from language barriers and time zone differences to intercultural communication nuances.

As business owners, agility and adaptability are key. You might often find the need to collaborate with local experts to bridge cultural and linguistic divides, synchronize business processes effectively, and expedite your international business’s growth. Regardless of whether you’re handling tasks in-house or outsourcing, there are crucial areas of focus:

• Marketing Management: Craft and roll out localized marketing strategies, leveraging tools like SEO, PPC advertising, social media, and collaborations with local influencers.
• Operation Management: Ensure the smooth functioning of daily operations, from inventory management and prompt order processing to effective customer service.
• Supply Chain Management: Familiarize yourself with the logistics landscape. Establish relationships with dependable local suppliers, manage warehousing facilities efficiently, and prioritize timely deliveries to enhance customer experiences.
• Quality Control & Reporting: Consistently assess the caliber of products or services you’re offering. Set up comprehensive reporting systems to review sales data, gather customer feedback, and monitor other critical performance metrics, ensuring continuous improvement.

Why not seize the opportunity in this untapped market?

The Indo-Pacific is an untapped market with tremendous growth potential. As countries like the UK, US, Germany, Italy, and France increase their footprint, Canada is well-positioned to capitalize on this opportunity. E-commerce offers an efficient and economical route for Canadian businesses to make inroads. With the framework provided, businesses have a head start. And remember, the governmental agencies like Export Development Canada and Trade Commission Services are available to assist throughout the exporting journey.

By meticulously crafting your strategy, smoothly integrating into the Indo-Pacific e-commerce ecosystem, and managing daily operations efficiently, Canadian businesses stand to capture the immense potential this burgeoning market presents.

As every year comes to a close we like to take a moment to look back at the key trade issues people were talking about – and therefore, reading about. It was another year of changes and uncertainty, which is likely why two of our most-read articles were about risk.

But it was also a year for plodding ahead and looking to a brighter future. People were reading about business planning, investment and negotiations in a changed global business environment.

What was also heartening to see was the interest in articles about investing in your personal and career growth. Two of our most-read articles were about career success and upskilling.

So without further preamble – here are the top 10 most-read articles of 2022. Read on, enjoy, and let us know what you think most people will be reading about in the year ahead in the comments.

1. 10 Global trade trends we’ll be watching in 2022

10 Global trade trends we’ll be watching in 2022

2. The most common forms of foreign direct investment (FDI), including ownership-based investments and investments based on strategic alliances

The most common forms of foreign direct investment (FDI), including ownership-based investments and investments based on strategic alliances

3. A Guide to Preparing an International Business Plan

A Guide to Preparing an International Business Plan

4. Identify and mitigate the 4 types of financial risk: commercial risk, foreign currency risk, country risk, and bank risk

Identify and mitigate the 4 types of financial risk: commercial risk, foreign currency risk, country risk, and bank risk

5. The 11 political risks that could sink your imports and exports

The 11 political risks that could sink your imports and exports

6. What should be on every bill of lading

What should be on every bill of lading

7. 5 Canadian Trade Commissioners talk about their career success

5 Canadian Trade Commissioners talk about their career success

8. Pros and cons of using subcontracting as a market entry strategy

Pros and cons of using subcontracting as a market entry strategy

9. Top 7 reasons to become a CITP according to CITPs

Top 7 reasons to become a CITP according to CITPs

10. 10 tips for negotiations in a virtual meeting environment

10 tips for negotiations in a virtual meeting environment

As more craft brewers come online in Canada, and Canadians continue to reduce their beer consumption, many local beer markets are becoming increasingly saturated. Interprovincial and US markets likewise have very competitive environments for high-quality craft beer.

For Canadian brewers to continue to grow, they will need to look to other markets. And there is one, bigger than any other, that is largely untapped by Canadian brewers: Chinese e-commerce.  

China beer market growing fast

Valued at nearly $18 trillion, the Chinese market is the second largest in the world. With 842 million Chinese people shopping online, China also has the largest e-commerce market globally, generating over 52% of the world’s transactions, more than North America’s and Europe’s combined. And this growth shows no signs of slowing down any time soon.  

“China’s e-commerce sales are expected to be 52% of the country’s more than $6 trillion in retail sales, making it the first country in the world ever to have more online sales than traditional retail sales”, says Calvin Xiao, founder of Catalystx, a Canadian international marketing management firm specializing in Canadian to Chinese e-commerce trade.  

So far in 2022, Chinese people have spent over $120 billion US on beer consumption and represent 12% of the world’s beer market.

China is also one of the few places in the world where the beer market is growing fairly rapidly at 5% annually, and the most likely place the Chinese consumer will make that purchase is online.  

“Chinese consumers are very tech-savvy, and 55% of Chinese alcohol consumers are ordering online,” says Xiao.  

Canadian craft beer a good match for evolving market

With the development of the Chinese economy and improving living standards, Chinese consumers’ purchasing habits are dramatically changing as younger generations search for products with a unique taste, high quality, and freshness. Canadian craft beer fits this profile perfectly.  

This younger generation is quickly becoming a primary purchasing group and represents more than 65% of beer purchases in China. And these young people are willing to pay for quality, uniqueness, and freshness – things Canadian craft beer has in droves.  

“A recent poll showed that more than 74% of Chinese consumers are willing to pay for craft beer at a higher price,” says Xiao.

More than 57% say they are willing to pay 25% more than the regular price and nearly 17% are willing to pay 50% more. That’s a phenomenal opportunity for Canadian craft brewers.

Canadian craft beer market is saturated, and beer exports to the US are decreasing

But no Canadian brewers are handing people in China a beer. Most recent Canadian beer exports went to the US market. But US demand in Canadian beer is decreasing and between 2015 and 2021, Canadian beer exports dropped 14.2%. 

The Canadian domestic beer market is also becoming more saturated. More than 85% of Canadian beers were sold and consumed locally. In the last five years, the number of local brewers increased by 115%. The business density (brewing facilities per 100,000) soared by 100%. But domestic beer consumption is decreasing. Beer sales fell 6.6%, and per capita consumption dropped 12.6% from 2015 to 2021.

So, the Chinese market is a growth opportunity for Canadian brewers, representing a significant source of market expansion and sustainability for the industry. 

Early adopters will gain a significant share of the Chinese market 

So, now is the time to consider exporting to China’s e-commerce market. Canada is known for some of the best barley in the world and has a growing reputation for great beer.

With Chinese beer drinkers turning away from cheap local brews toward premium products and imported beers, Canadian brewers can leverage this reputation and market their products for significant margin gains. Plus, cross-border e-commerce channels now provide Canadian brewers unprecedented access to markets across China. Brewers who gain entry early will take substantial portions of the market and make gains that late adopters will not. 

Time for Canadian craft brewers to become “export ready”

Unfortunately, most Canadian beer manufacturers – having focused largely on local markets – are a long way away from being export-ready.  

“Canadian beer exports aren’t well-developed and remain exclusively US-dependent,” says Xiao. In 2021, Canada had 1,876 beverage and tobacco product manufacturing, less than 15% of those manufacturers were export-ready establishments.

But, with the right support, Canadian brewers can dip their toes into international trade through Chinese e-commerce relatively easily.  

As the craft brewing industry in Canada has grown, so has the global recognition of Canadian beer. Canada has a reputation for some of the best barley in the world, clean air and fresh water, a friendly business environment and political stability. Plus, China is Canada’s second-largest export partner and the process for e-commerce trade in China has become highly effective and accessible.  

“The time for Canadian brewers to become export-ready and enter the Chinese e-commerce market is now,” says Xiao. Cross-border e-commerce transactions in China reached $261 billion in 2020. So, the process has become effective and efficient for international trade.

Canadian breweries that enter the Chinese e-commerce market today benefit from streamlined Chinese customs procedures, improvements in delivery methods, policies that allow direct-to-consumer cross-border transactions and exemptions of certain goods from registration, Chinese labelling, and testing requirements.  In short, cross-border e-commerce channels now provide unprecedented access to markets across China. 

Last year, the value of Canada’s beer exports was CA$129 million dollars, which counted for less than 9.8% of the beverage and tobacco manufacturing exports. Canadian craft brewers could grow these exports significantly. 

On one side, with the development of the Chinese economy and better living standards, Chinese beer drinkers are turning away from cheap local brews and seeking out foreign craft beers.

These beer drinkers are also willing to pay top dollar for quality, uniqueness, and freshness.

On the other side, the Canadian beer market is becoming increasingly saturated at home, and US exports are decreasing, so Canadian brewers should consider diversifying markets for profitable and sustainable growth.  

As the craft brewing industry in Canada has grown, so has the global recognition of Canadian craft beer. There has never been a better time for Canadian craft brewers to export their beer. A Chinese e-commerce market is a solid option for Canadian brewers. Not only is its e-commerce becoming the future  of mainstream commerce, but it is also the most effective, efficient, and economic foreign market-entry strategy for an SME.

To put it another way, Canadian brewers can sell products from abroad without establishing a presence in Greater China and the six Southeast Asian countries (the SEA region). That’s an innovative and accessible way to enter a new market. And these are not small markets! China’s E-Commerce alone is incredibly lucrative. 

Whether you sell goods or services or both, there may be tremendous opportunities for you to grow your business outside of the domestic border. In fact, going global can make you more efficient, make you more competitive and make you stronger.

However, if exporting were easy, every company would do it, so it’s crucial to understand what’s involved.

During this series, we will provide an outline of some of the risks of going and growing globally, as well as a high level “A to Z” of exporting – everything from assessing your company’s export readiness to planning and researching market entry, finance and marketing.

FITT experts:

Daniel Lewis CITP, Founder – Daniel’s Chai Bar, Author, International Speaker

Marvin Hough CITP, President – MIRA Limited

Lora Rigutto Vigliatore CITP, Loyalty and Engagement Manager – FITT, International Business Instructor

Assessing your company’s export readiness

Feasibility of International Trade

When we talk about feasibility of international trade we’re principally referring to three broad components:

• Export readiness – does your venture have the resources required to venture into foreign markets?
• Choosing your target market – where should you start?
• Suitability of your products and services – is your product or service suitable for your target market, or do you need to modify it in some way?

The first step in assessing your export readiness is to do a SWOT analysis – you must assess your strengths and weaknesses and figure out your gaps.

The second step is asking yourself those tough questions – why are you exporting, who is going to get the work done, and are you really ready?

Daniel, can you tell us about your company’s journey to importing and exporting, and how you determined when you were ready to go global?

The thing I like to say is that we started exporting accidentally, and then we learned how to do it the right way, so a lot of what I learned was by mistake.

When we started our company, our focus was on how we could positively impact the community that we’re in, which was working. But then it got to a point where the people that we were impacting in our local market well, they have family that visits from international locations, and when they would experience our brand and our products we started to hear the questions like “do you ship to the U.S., to Australia, Japan?”

When you keep getting those questions then you start to ask, is there business potential elsewhere? That’s what started to happen for us. We started to sense a demand, especially from the U.S., for our teas and we had to start thinking about how to get it there. So we had to figure out packaging and how to ship it – what were the documents that we needed.

We made a lot of mistakes in those early stages, until we started to learn from those experiences and get our feet on solid footing.

We also started to learn that in the U.S., which became one of our big markets, it’s very different than Canada. People are different, the buying decisions and motivations are different, and we couldn’t just copy paste what was working with our Canadian market. Eventually we tapped into resources like FITT to learn and refine that process.

What were some of those gaps that you had to address before you could make that leap to a new market?

 One of the biggest gaps for us was, from our company’s inception, we branded ourselves as a company who uses tea as a tool to impact people’s lives in a positive way, so in our marketing we put our mission before our product. And that resonated very well here in Canada.

But when we went to an international market, like the US, they didn’t really know us, and that connection was not the same. We had to find a strategic way of turning that around and creating a product focus. It was the complete opposite of how we were branding and marketing ourselves originally.

Marvin, how do you assess or help your clients evaluate their own export readiness?

You know in Canada, we have about a million SMEs and only about 4% are actually exporting. And out of those about three quarters sell into the United States. Going global for an entrepreneur or startup SME is really challenging, but it’s also really There are three pieces of good news I want to share:

1. There are more groups available now to help entrepreneurs than ever before. FITT and Startup Canada are both excellent examples.
2. The digital revolution has created an easier path into markets.
3. Startups can be very flexible and agile and being able to pivot and change the way you’re operating is really, really important.

I put my clients through a readiness checklist that can be quite extensive. I’ll mention some of the points that I think are really important that companies look at. Number one is management’s commitment to the export field.

I’ve seen companies say they’re ready and they want to go at it, but two months later, they come back and another project has taken priority. To tackle international markets, companies have to be sure they’re committed from the very top.

The second part is foreign market research. You can do a lot of this online now, which makes this much more accessible.

Thirdly, having the financing setup and support is important, whether you have to adapt your products or just completing an order. So many companies I’ve seen are stretched too thin, and they’ve got an export order but they lack that risk management.

As you enter a market you’ll often be relying on an agent, partner, or distributor. It’s so important to do the full analysis and fully vet your partners.

There are many other items on the export readiness checklist – from getting the right freight forwarder to understanding the promotional material requirements in your target market.

A great resource I’ll point out is on the Trade Commissioner website  – there’s an export readiness quiz that you can complete to assess all these readiness factors.

And if you don’t have an answer to some of those questions, or the answer is no, then consult with consultants, and CITPs, and seek training resources like the workshops and courses provided by FITT. The Situational Analysis workshop and Feasibility of International Trade course in particular can help on the preparedness side.

EDC, is also a good resource for companies that are assessing if they’re ready to export.

But as mentioned, sometimes an export order comes out of the blue and all of a sudden there’s an order coming in from a new market. That can be an exciting and overwhelming situation, but it’s also a great learning experience because startups have the agility to learn and adapt quickly. Daniel and his company are a great example of that.

You’re never too small to start exporting, you just have to know where your gaps and tap into the right resources that can help you.

How do you determine which markets to start exporting to?

I caution companies to get focused on their target market and don’t take on too many markets at the same time. That can often be a recipe for disaster.

As mentioned, many companies start exporting to fulfill orders that have come to them through e-commerce or a random request in their inbox. But there can be a tremendously steep learning curve.

The vendor may not be set up to ship internationally and may not understand customs procedures or local requirements for labeling and packaging.

So, if we take that strategic approach to market expansion, are there certain types of markets that are good testing grounds for first time exporters?

Many Canadian businesses start their international expansion in the United States where there’s cultural affinity and we conduct business in similar ways.

One resource that comes to mind is called the New Exporters to Border States (NEBS) program run by the Ontario government which helps businesses who are exploring the U.S. market. If a company is going through the readiness stage, they can go to the U.S. for a two day program and get all of the details about crossing the border from currency exchange to tax and legal issues.

Through this program the businesses can gain that knowledge firsthand, they can for example, go to Buffalo for two days and meet with all of the officials who can help facilitate the logistics in that market.

There’s a plethora of information online through government websites here in Canada, and I find industry associations have really good information on foreign markets for companies looking at getting into a sector.

But then there’s always those unexpected orders that come and companies have to evaluate them. Having somebody focused on the research is very important, whether that’s an internal employee or engaging a consultant to do that.

Hiring a research consultant can be extremely important, in my experience, for a smaller company.

Daniel, you mentioned, you started your company’s exporting journey in the United States because of unplanned opportunities to fulfill orders from word of mouth.

Was exploring that market also a strategic choice or was it just because of that unexpected demand coming in?

I was not strategic at all, I was just reacting to those opportunities. And that’s a place you don’t want to find yourself in when it comes to exporting.

So often in business, you have this checklist and this plan, and then boom! Something else just side tracks it. That’s what happened to me in many cases, and I was not necessarily ready.

For example, I’m also an author and with my book sales, I said “I’m open to the world!”

I learned you have to be careful of just saying that you’re open to selling internationally, because I was selling my book for $9 and I got an order from Vienna. Long story short, by the time I shipped that and got it to the customer it cost me $85. It was either that, or they had to wait like five months to get the book.

Logistically for you, you need to know if you are entering the best market from a sales and marketing standpoint. Explore where there are trade agreements between your home country and that market or that country that you’re trading into.

We didn’t know about the HS codes that we needed to declare and put on our packaging, and we got hit so hard with this influx of information that we weren’t prepared for.

If I was to do it again, I would have found people who have experience – and I would have started with FITT courses and the Trade Accelerator Program.

These kinds of resources have helped to make me aware of the things that I don’t know about exporting and importing.  And that’s what I didn’t do before, so if I was to do it over again, making that commitment from a management standpoint to do the research, learn about the shipping logistics.

Start by getting training, attending workshops virtually, doing your online research, reading books – it will all make you feel so much more ready and give you a psychological confidence to start exporting.

Before I did that, I was getting to a place where I didn’t want orders to come in anymore, because I felt like I was just going to mess it up. But once you feel ready, you get more aggressive in doing business and getting sales and facilitating those orders. Then your customer service kicks in and that’s when business starts to thrive.

Something that sometimes happens when companies enter big markets – it’s that idea that a big country like the U.S. or Mexico is one market. It’s a fallacy, I’ve seen so many companies think that they’re into the market and really they’ve only got a little bit of a foothold in a particular city. We have to realize that there are difference markets within these big countries from region to region and different cities. That has to be explored as part of your analysis.

I’ve been teaching here at the Telfer School of Management and in the MBA programs in many universities. Within these types of programs the students often undertake international research projects for companies as a learning experience. These can be a sort of a free service, and a great resource that I would highly recommend to assist with your market research and analysis.

Stay tuned for the next article in the Ready. Set. Export. series – “Adapting your products and services”

An international business plan acts as a framework that identifies goals and objectives, specific target markets and clients, resources required and strategies to be developed in pursuit of international business opportunities. The plan allows for the monitoring of progress via metrics against which success and failure can be measured. A comprehensive international business plan will be comprised of a number of integrated strategies related to business functions, including communications, sales and marketing, finance and production.

What Is an International Business Plan?

An international business plan is a valuable management tool that describes who a business is, what it plans to achieve and how it plans to overcome risks and provide anticipated returns. It can be used for a wide variety of purposes, such as to:

• Set goals and objectives for the organization’s performance.
• Provide a basis for evaluating and controlling the organization’s performance.
• Communicate an organization’s message to managers and staff, outside directors, suppliers, lenders and potential investors.
• Help the planner identify the cash needs of the business.
• Provide benchmarks against which to compare the progress and performance of the business over time.

A comprehensive and detailed plan forces the planner to look at an organization’s operations and re-evaluate the assumptions on which the business was founded. In doing so, strengths and weaknesses can be identified.

Although highly dependent on the individual business case, on average it takes a three-year commitment to establish a successful presence in a foreign market. This process may require tremendous human, technical and financial resources during the developmental period.

Want to learn more about conducting proper research, selecting the most effective entry strategy and implementing it efficiently? Check out the FITTskills International Market Entries Strategy online course!

The Planning Process

An international business plan is subject to repeated adjustment and revision to keep it current with the changing circumstances of the organization. The plan is a feedback mechanism through which new information is continually incorporated into the organization’s operations. Planning always precedes action. Therefore, planning must be thought of as a continuous cycle. The analytical tools presented here are not intended to be used just once. If they are to be useful, they should be used repeatedly as part of a process of improvement and incremental adjustment.

Plan Preparation Guidelines

These 7 guidelines will help in preparing a comprehensive international business plan:

1. Clearly define the objectives for producing the plan: Who is going to read the plan, and what will they need to do? These objectives can help you decide how much emphasis to put on various sections.
2. Allocate sufficient time and resources to thoroughly research the plan: A plan is only as good as the research that went into producing it.
3. Show drafts of the plan to others: It can be very useful to obtain feedback from others, both inside and outside the business.
4. Create an original plan that is done specifically for each business case: A common mistake entrepreneurs make is to borrow heavily from a sample plan and simply change the names and some of the numbers. There are two big problems with this approach. First, the emphasis placed on various sections of the plan must reflect what is important to the particular business in question. Second, a good plan should flow like a story, with the sections working together to demonstrate why the business will succeed. Plans that borrow too heavily from other plans tend to be disjointed, with some sections contradicting others and various key issues left unaddressed.
5. Outline the key points in each section before the writing starts: These points must then be reviewed to ensure the sections are consistent with each other, there is little duplication and all key issues have been addressed.
6. Ensure financial projections are believable: For many readers, the financial section is the most important part of the plan because it identifies the financing needs and shows the profit potential of the business. In addition, a good financial plan will give the reader confidence that the author really understands the business.
7. Consider writing the executive summary as the last step in the process: It is usually easier to provide a concise overview after the detailed content has been created.

If you’re having trouble getting started with your business plan, try writing like it’s a series of tweets—one for every section of your business plan. To get your point across, 140 characters is all you need.

Forcing yourself to boil each section of your business plan down to one main point is an exercise in decision making and strategy all in itself. When you’re done, you’ll have everything you need to take your next step, whether that’s practicing your pitch to potential investors or a business partner, or sitting down to expand each tweet into a full section of a more traditional business plan.

Core Content

The international business plan is the culmination of all of the work done to determine the appropriate venture for the organization’s growth. As part of the feasibility process, the organization will have determined its own internal readiness, conducted comprehensive target market research and carefully analyzed any relevant risks.

For more information on this topic, see the FITTskills Feasibility of International Trade online course.

At this point, the organization can take all of this information and analysis and formally document the plan for moving forward. There are many different models and examples of how to put together a formal business plan, rather than one correct way.

The right format will depend on the organization, the venture being pursued and who will be accessing the business plan and for what purpose. However, there are some basic guidelines to follow.

One of the reasons business plans are developed is to convince investors and/or bankers to invest in the venture.

Increasingly, they are looking for a business plan to include two sections: one relating to online strategy (in terms of e-marketing, social media and ROI) and the second relating to corporate social responsibility (including quality, health, safety and environment policies).

The inclusion of these topics gives more credibility to the company by demonstrating its commitment to the community and to employees’ well-being.

Telling a Story 

One trend in business planning is to use a narrative structure in the document, rather than traditional technical writing techniques. Storytelling techniques are increasingly being used throughout the business world to create personal and organizational brands, deliver marketing messages and develop persuasive plans.

Stories make presentations better. Stories make ideas stick. Stories help us persuade. Savvy leaders tell stories to inspire us, motivate us. That’s why so many politicians tell stories in their speeches. They realize that “what you say” is often moot compared to “how you say it.

Instead of using bulleted points and cold, technical language, organizations employ a “beginning, middle and end” narrative style. This engages the audience by establishing the context, describing the conflict or obstacles and arriving at a successful resolution.

The Executive Summary

Usually the last step of preparing the international business plan is to develop the executive summary, a short overview of what the plan proposes to accomplish. For some purposes, a one-page business plan can also be useful.

There is not a great deal of difference between an executive summary and a one-page business plan. The most significant distinction is the one-page plan must completely fit on one page in a readable font, while an executive summary may spread over two or three pages.

One-Page Business Plan

There is a trend towards the one-page business plan, especially if the plan is to be presented to potential partners for their consideration. Audiences for the one-page plan will be looking for a “quick hit”: a clear and concise description of what the opportunity is and how it is being pursued.

For example, a one-page business plan might include the following topics, as described in Noah Parson’s article “How to Write a One-Page Business Plan” on the website Bplans:

• Customer problem/opportunity
• Your solution/approach
• Business model (how you make money)
• Target market (who is the customer and how many are there)
• Competitive advantage
• Management team
• Financial summary
• Funding required

The one-page plan (or the executive summary, if used in place of the one-page plan) may provide the first impression the audience has of the business. This is the most important document generated out of the business planning process, and significant effort and care should be taken in its creation.

There are many websites the provide blank samples of one-page business plans, including Bplans, the GoForth Institute and Startup.com.

A Note on Strategic Plans

A strategic plan covers many of the same points as a business plan. However, a strategic plan sets out the detailed action plan to be followed to achieve the objectives of the international business plan.

It must outline specific activities, their due dates and who is responsible for each activity. It is a project plan with a critical path. A strategic plan ensures any venture is carried out in a coordinated, informed and systematic way.

A key consideration in action planning is how quickly to enter the market, which is driven by the chosen market entry strategy. If market entry is done too quickly, the potential for costly mistakes increases. However, if it is completed too slowly, opportunities may be missed and competitors will have more time to react.

The Planning Cycle

Attaching the word “cycle” to planning implies that it happens more than once. International business plans need to be reviewed periodically because new information that has an impact on both planning and operations is continually coming in.

All plans, including international business plans and strategic plans, need to be reviewed every time there is a major event impacting the business, such as civil unrest, a currency fluctuation or the presence of a new competitor.