Doing Business Doing Business InternationallyInternationally

BBI2OBBI2O

Why go international?Why go international?

Find new customersFind new customers Partner with new suppliersPartner with new suppliers

• Products you can’t get domesticallyProducts you can’t get domestically• Higher quality products than you can Higher quality products than you can

get domesticallyget domestically• Lower costsLower costs

Stay ahead of competitorsStay ahead of competitors

The downside of going internationalThe downside of going international

New competitionNew competition• Foreign competitors expanding into your Foreign competitors expanding into your

home countryhome country• When you enter foreign markets you When you enter foreign markets you

compete against the “home team”compete against the “home team”

The Big QuestionThe Big Question

Will anyone buy my product?Will anyone buy my product?• Can they afford it?Can they afford it?• Is there demand for it? If not, will you be Is there demand for it? If not, will you be

able to create a demand?able to create a demand? Is there existing competition?Is there existing competition? Can you legally sell your product Can you legally sell your product

there?there? Will you be able to earn a profit?Will you be able to earn a profit?

Potential ProblemsPotential Problems

CostCost StandardsStandards Logistics/InfrastructureLogistics/Infrastructure Cultural barriersCultural barriers

CostsCosts

TariffsTariffs Exchange ratesExchange rates

• Unstable currencies can wipe out profit Unstable currencies can wipe out profit marginmargin

Transportation costsTransportation costs ““Hidden” costsHidden” costs

• Translation, legal costs, insurance, local Translation, legal costs, insurance, local taxes, bribestaxes, bribes

StandardsStandards Different countries have different Different countries have different

standardsstandards Examples:Examples:

• What side of the road do you drive on?What side of the road do you drive on?• Is it 0 degrees, or 35 degrees?Is it 0 degrees, or 35 degrees?• Is it 29 kilometres into Ottawa, or 18 miles?Is it 29 kilometres into Ottawa, or 18 miles?

Units of measure, voltages, video Units of measure, voltages, video standards all can differ from country to standards all can differ from country to countrycountry

Safety standards change (higher or lower) Safety standards change (higher or lower) You must make sure your product meets You must make sure your product meets

each countries standardseach countries standards

Logistics and InfrastructureLogistics and Infrastructure

How will you transport your product?How will you transport your product?• Does the destination country have Does the destination country have

shipping ports, airports, well maintained shipping ports, airports, well maintained roads, rail system?roads, rail system?

How will you communicate?How will you communicate?• Phone, internet, wireless, radio, etc.Phone, internet, wireless, radio, etc.

Other considerationsOther considerations• Hospitals, police and fire departments, Hospitals, police and fire departments,

education systems, bankseducation systems, banks

Cultural IssuesCultural Issues

Example: Wild Jack’s Snacks is the Example: Wild Jack’s Snacks is the best selling beef jerky in Canada.best selling beef jerky in Canada.• India has over 1.1 billion people, so India has over 1.1 billion people, so

would be a very attractive marketwould be a very attractive market• Any problems?Any problems?

Cultural IssuesCultural Issues

A business must be very careful about the A business must be very careful about the words and images it uses in its marketingwords and images it uses in its marketing• May inadvertently offend people or even break May inadvertently offend people or even break

local lawslocal laws Must not only be aware of language, but Must not only be aware of language, but

also culture and customs (slang, hand also culture and customs (slang, hand gestures, significance of colours, gift gestures, significance of colours, gift giving practices, punctuality, dress code, giving practices, punctuality, dress code, etc.)etc.)

ReviewReview Pros and Cons of competing Pros and Cons of competing

internationally?internationally? What are the 4 categories of errors a What are the 4 categories of errors a

business can make when entering a business can make when entering a foreign market?foreign market?

Examples of extra costs associated with Examples of extra costs associated with international businessinternational business

What does “infrastructure” mean?What does “infrastructure” mean? Why would a local translator be more Why would a local translator be more

useful than a translator you bring with you useful than a translator you bring with you from your home country?from your home country?

Textbook workTextbook work

Read page 505-508 in the textbookRead page 505-508 in the textbook Answer questions on p. 511Answer questions on p. 511

• 1b)1b)• 2a), b) and c)2a), b) and c)