Why The Dollar Is Giving Way

In BusinessWeek

Curious as to what's going on with the dollar? If you have time, read this comprehensive commentary:
Why The Dollar Is Giving Way

Baby Steps Led Mother To National "Entrepreneurial Export Award"

In BusinessEdge (Vancouver, B.C.)

Sandra Wilson is putting her best foot forward as she steps up to receive the 2004 Canadian Woman Entrepreneur of The Year Export Award.

The Burnaby-based maker of soft-soled leather baby shoes was honoured last week at a gala dinner in Toronto by BMO Financial Group. “This award means a little bit of recognition of the time, the effort and the energy that has gone into building this business,” says Wilson, owner of Robeez Footwear Ltd. “Most people think we are an overnight success story, but it has actually taken us 10 long years.”

To read Sandra's story about how she started her exporting business in her basement and grew it into a U.S. $15 million-dollar exporting business, visit: Baby Steps Led Mother To National Export Award

Playing the "Wal-Mart-China" Global Game

In response to the many postings on blogs -- from Small Business Trends to The Entrepreneurial Mind -- about eBay's international expansion and how they are enabling small businesses to go global, I'd like to bring up another monster of a company and country who are not necessarily leading the way for small businesses to go global but influencing the international marketplace: Wal-Mart and China.

Wal-Mart has achieved economies of scale that are unprecendented when it comes to its purchases from the biggest country-customer in the world: China. Here are some facts I tracked over the last couple of days on just how BIG the Wal-Mart and China game is:

• Wal-Mart is termed China's eight-largest trading partner by the government-controlled mainland media and would place ahead of Russia and the United Kingdom on the top-10 list.

• Wal-Mart would be the fifth-largest importer of Chinese manufactured items if it were considered as a nation.

• The U.S. is expected to run up a total trade deficit of more than $600 billion in 2004, with the deficit in its bilateral trade with China contributing $150 billion.

• Wal-Mart imported $15 billion in goods from China in the fiscal year that ended January 31, 2004. About $7.5 billion were directly imported by Wal-Mart, the other $7.5 billion came indirectly through suppliers.

• In the same period noted above, Wal-Mart's total net sales reached $256 billion, with roughly $209 billion coming from U.S. operations.

Here's what I researched on the dollar-yuan situation that you might find interesting:

It all begins when American consumers plunk down their credit cards at Wal-Mart stores anxious to buy appliances, toys and clothes at rock-bottom prices. But because the United States imports roughly $6.50 in goods from China for every $1 that America exports to China, the Beijing central bank ends up with a huge reserve of dollars, amounting to $514.5 billion, for example, at the end of September.

Not wanting a boatload of dollars in its vaults, the People's Bank of China, the central bank, uses a huge portion of its reserves to buy Treasurys. THIS IS A KEY TO KEEPING THE YUAN FROM APPRECIATING AND THE DOLLAR STABLE AT 8.28 YUAN. It also keeps U.S. consumer prices down along with interest rates, which means for now that Americans can continue to plunk down those credit cards at Wal-Mart during the upcoming holiday season.

What's a small business to do? Navigate your way around this monster "Wal-Mart-China" relationship and either export goods that are the world's best at their intended purpose to China or go elsewhere.

Entrepreneurship and global media coverage

In Wisconsin Technology Network News

This is a thoughtful and practical article on the importance of not just creating world-class products but also letting the world know about them! I highly recommend you read it to understand how "global" publicity plays a significant role in business success.

To read the entire article, visit: Wisconsin Entrepreneurs Need To Self-promote Like Coastal Rivals

Another Crystal Ball

Posted in Always On
A real estate veteran looks at demographics and comes up with a new view.

Here's what Francine Hardaway of Stealthmode Partners had to say (an extract from article) on global outsourcing, entrepreneurship and small businesses but first, Leann Lachman did the numbers:

• And the office market, because the global outsourcing of skilled service jobs continues. By 2010, 1.7 million office jobs will go overseas, doubling by 2015 to 3.4 million.

• Lachman believes we will replace those jobs with something, but she's not sure what. I (Francine), of course, believe it will be small business and entrepreneurship, lean and mean, with strategic partnerships and strategic outsourcing (but no need for the kind of big office space of the past).

To read the entire mind-opening article, visit: Another Crystal Ball (A Look At Demographics and A New Worldview)

Coming Growth Strategy: Exporting!

In Small Business Trends (11/10/04)

As reported by small business trend expert Anita Campbell: Coming Growth Strategy: Exporting

And a very BIG thank you for mentioning our ChangeThis manifesto about small businesses going global in the report.

ChangeThis manifesto: Global Guru. Shaking Things Up. Making Things Happen.

In Small Business CEO

A special thanks to founder Steve Rucinski at Small Business CEO Blog for mentioning and praising my just-released "ChangeThis Global Guru" manifesto. We hope the work inspires many of you to go global! You can download and read the manifesto (for free!) here: ChangeThis Global Guru Manifesto (11/9/04)

Spread the word and many thanks!

Abridged Borderbuster 11/5/04

If you are not a subscriber to Borderbuster, here's a glimpse of what you missed:

CONTENTS

1. Welcome From The Publisher
2. Feedback From Our Readers
3. UPS CEO Says That All Business Today Is Global!*
4. Business Cultural Tips: Have Some Fun!*
5. Service Franchises Are Going Global
6. How I Went Global: Ongoing Series // WSJ Nobel*
7. A Reader Asks: Q&A*
8. Everybody Loves a Freebie -- repeat: FREE OFFER*
9. How to Write For A Multilingual Marketplace
10. Entrepreneur in a Global Organization
11. Export “Red Flags:” New Proposed Regulations*
12. The Next Generation of Global Branding*
13. Watch for Laurel’s New e-Book: “Godzilla Global Marketing”*
14. Take A Walk On The Wild Side (TAWOTWS)*
15. Wind Behind Your Sail*
16. Miscellany*

Sample section:

7. A READER ASKS: Q&A
*Subscriber Exclusive*

Q: Dear GlobeTrade Team,

We manufacture high-quality step ladders and are trying to figure out the best way to source complementary products in China to offer a family of hardware tools for our customers. Any suggestions?

A: You bet and we just caught this information in the November edition of IOMA’s report on “Managing Exports & Imports.” Here’s the clip:

China Sourcing Fairs provide exporters and importers a one-stop venue. The China Sourcing Fairs (www.chinasourcingfair.com), organized by Global Sources, bring together volume buyers with international-standard manufacturers from all over China to Shanghai. Buyers can benchmark and source from new, competitive China suppliers more effectively. Buyers can register for the shows, reserve a hotel room in Shanghai, and arrange a China visa at the site.

We have not used this resource but did scan the site and found it to be fairly comprehensive in – as it claims -- taking you to the center of China.

Good luck and let us know how it turns out.

Laurel and the GlobeTrade.com team

-> Got a question or a comment? Good. Send it here: info@globetrade.com

To subscribe to Borderbuster, visit:
Sign Up For Borderbuster Here

Women Entrepreneurs Enter the Global Marketplace

In The Fox School of Business and Management, Temple University

How can women enter the global marketplace and find success? As the numbers of women poised to enter the global marketplace accelerate, this question is becoming increasingly important. According to the U.S. Small Business Association, women-owned businesses currently account for 30 percent of businesses that export more than half of their products worldwide.

Here are a couple of great tips that I tracked in the article and they apply to both men and women alike who are interested in expanding internationally:

• Don’t let challenges take over opportunities (the biggest challenge women face in doing business internationally is the perception that they will not be as successful as men because of cultural assumptions about women’s roles in other countries, along with work and life balance issues. If women are supported by their companies and take the risk to get started, they will be just as successful).
• Create a targeted export strategy.
• Know your market and your product.
• Be proactive.
• International business is built on relationships (a skill at which women excel).
• Treat all business as local (women should be who they are, listen, have a sense of humor and be willing to share a bit about themselves with overseas counterparts).

To read the entire article, visit:
Conference Guides Women Entrepreneurs Entering the Global Marketplace

Entrepreneur in a Global Organization

In the Star Online

For any entrepreneur contemplating going global, this article is for you! Here is part of it:

Hatim argued that one could not be a global enterprise unless and until one not only thought globally but also acted globally. He also believed that one should not be intimidated by the differences that exist in this world but instead embrace those differences.  

Citing an incident with a South African bank, he related VeriFone Inc’s experience in winning a deal by living this philosophy. When he went to meet the chairman of the bank, Hatim had with him the VeriFone Philosophy document, which had been translated into Afrikaner (Laurel here ... how sensitive and important that he did this in his business dealing -- read on). 

The chairman almost could not believe it and said he had never heard of a global enterprise that was thoughtful enough to have documents in English and also in his own language. The meeting went on for about 45 minutes and nothing was said about VeriFone, but a lot was said about ethics and global leadership. When he walked out the office, Hatim said, he was 100% certain that his company would get the orders. 

And it did, in that case and in many others. 

The moral of the story is that when one has a document – like the VeriFone Philosophy document – translated into different languages, one actually believes in it. 

Hatim admitted that it was very difficult to get people to follow one’s lead, though. One has got to continually communicate and make sure that people understand that one is serious by living what one believes, i.e. “walk the talk”, he said. 

To read the entire article, visit: Entrepreneur in a Global Organization

Think Globally, Act Globally -- Lessons from the Big Guys

In Always On

The CIOs of Wal-Mart and Procter & Gamble talk about their next level of tech adoption, and why it means investing and expanding globally. This is a very interesting article and site that brings in the BIG guys, including founding partners Accenture, Audi, IBM and KPMG. I found the reader's comments to be the most insightful.

Small businesses can learn about big-picture international strategy from this interview. Here are some highlights:

Margulius (Interviewer): Let me ask you both about global technology. Wal-Mart is expanding very aggressively and acquiring other companies. You bought $12 billion worth of merchandise from China in 2002 --I read that somewhere, I don't know if it's accurate -- which is about 10% of its exports to the United States. Clearly, you're a huge global business. What do you have to do with technology to enable that, and what can the people in this room do to help provide better technology to you?

Dillman (Interviewee from Wal-Mart): I think a lot of people are moving in this direction. We run common systems around the world. We run common platforms; we're on a single network. It makes us very efficient, and it means we can roll out a lot of things very fast and share best practices. A lot of our suppliers like P&G are pretty good at operating globally with a single customer and a single account team (Laurel here -- very practical advice even for small businesses).

To be honest, the technology suppliers are terrible, at least so far. And one of the things we're struggling with is we make decisions as our international business grows, and we're pretty close to this point right now. We have tended to make decisions on what technology and which suppliers we would select based on what the cost model looked like in the United States. And what we're finding is that it's so disproportionately different in some of the countries where we need the cost to be the lowest.

So even in China, the stuff is manufactured there, we find that the costs are double and triple to buy the technology we use in the United States and deploy it in China, even though the cost of everything else including the manpower is so much less, that we will start shifting our decisions based on what the global deployment looks like and the cost and not the domestic. We have pushed every single one of our suppliers, technology suppliers, to figure out how to work with us globally (Laurel here -- yeah!). We're going to negotiate deals one time (Laurel here -- another great tip for small busineses ... be selective and focus carefully on your targets). We're going to have software deals that are one deal per Wal-Mart everywhere.

Margulius: So does that mean the investors should be investing in foreign companies who are building to that house structure, or does it mean they need to just encourage their local companies to roll out the technology globally first?

Dillman: I'd probably invest in whichever one you think is going to happen first (Laurel here -- great advice!). More and more companies are going global in effort, and you're seeing deployment. And this might help you be first in that space.

David (Interviewee from Proctor and Gamble): We're not terribly dissimilar, but there are differences. We are not as centralized. It's the basic architecture and infrastructure of the company. We have four global databases: customers, suppliers, materials, and pricing. It's one of the reasons why we can do data synchronization any place in the world very quickly; I have one global reference database now for that.

There is another side of this that says we need to be very close to the business unit and so we allow a fair amount of innovation to take place as close to the customer or as close the brand or the country that it needs to be. But we're fairly rigid (Laurel here -- something small businesses never are and so we have the competitive advantage here) in understanding what that is, and we publish very well how that must fit in to our global architecture.

The biggest single issue is that I think our companies end up dragging the technology companies around the world, and that is just a really tough process. If you're going to do business with global companies you have to be prepared to be able to do business globally (Laurel here -- absolutely correct!). And most people just don't understand that. You have to have people, you have to have support, you have to do the things that are going to be necessary to support us because we're going to make fewer and fewer one-offs for the U.S. and Canada and Mexico and China. It's just not a supportable proposition in the long term. So, how can you support us on a global basis (Laurel -- excellent concept and a great question for small businesses to ask of themselves before they partner with companies)?

Margulius: Any surprises in dealing with China? Do you go to China? Do you work with their units over there?

Dillman: Absolutely I have been to China. Our dealings are obviously with our stores and our customers there. We approach China a little differently than we have some other countries, and it has turned out to be a very smart approach. We went very slow in China. We learned the country (Laurel here -- this is about doing your homework and understanding the culture), we developed relationships, we developed local talent, and we waited a little bit for the market to return. The government now is ending some of the restrictions on holding companies.

The welcome we receive from the Chinese customer is pretty amazing. Average transaction in the United States is about $35. The average transaction in China is less than $10. So we have a different model. They have less disposable income (Laurel here -- very important detail, along with the next two points, if you plan to sell to China). In China, you don't have a lot of impulse buys. They buy necessities. We've had to learn to adjust to the marketplace.

To read the entire article and to visit this comprehensive site, go to: Think Globally, Act Globally

Determining Which International Market To Enter: Start Here

In globalEDGE

I stumbled upon this incredible analysis for determining which international market has the most potential for your product or service offering. The focus of the study is to rank the market potential of 24 countries identified as "Emerging Markets" by The Economist. The country listings are then broken down into nine categories: market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, country risk and overall market potential index.

Find out why Hong Kong, Singapore and South Korea have such high ratings. Should they be considered as the top three markets for your product?

To find out more, visit:
Market Potential Indicators for Emerging Markets -- 2004

Eight (8) Clues To Get You Global

from Laurel Delaney

Here is a general idea of what to expect from each member of your global trade team along with additional clues to get you global:

1. The Executive Committee: they serve as a sounding board for your updates but are primarily interested in knowing what is needed to operate successfully in the global marketplace. Always go in on your meetings with the notion of making huge requests to ensure you walk out with at best, with what you know you need for certain. Clue: try your in-house committee for advice or if you are a one-person shop, set up your own independent council that includes noted academics, consultants and other experts in global trade.

2. The Marketing/Sales Staff: these people are original thinkers and need your advice on how to be creative in marketing your product or service overseas without confusing or offending your customer. They need an international marketing map and can use their domestic one as a model.

3. Logistics: how will they get your product or service to another country? They must understand international trade documentation as it relates to shipping, insurance, customs, compliance, method of payment, duties, tariffs and international laws. A freight forwarder might be an option, not the answer.

4. Operations: they need to know how many widgets you are going to sell, for how long, how often and within what time period. If changes are required in the production of the widget, they need to know that well in advance of the customer's deadline so they can coordinate procurement of raw materials and schedule a production run in a timely manner. Operations people need no outside help here -- this is where they shine and usually rise to the occasion.

5. Finance: how will your company get paid on overseas sales? The finance people need to know. They must understand international payment methods and terms both offline and online. Your own bank's international department can help here.

6. Research: who will determine which market is the best market to export your product or service?

7. Technology: these people need to adopt a new crop of Net-based apps that dramatically transform the export operations of the organization.

8. Cultural: who will be respectful of local culture and how will that be conveyed on your site? Adapting and translating fast-changing content for multiple countries' markets can be challenging. These people must become familiar with developed software that helps automate the workflow of language translation.

All other team members, such as the legal or customer service departments, must learn to coordinate their activities to ensure the smooth flow of the overall global trade operation.

Your global trade team is just that, a team and should never work in isolation of one another. That's why the set-aside time is important for keeping each person up-to-date with the hope of identifying the broad as well as the detailed issues concerning your trade transaction.

How to Write For A Multilingual Marketplace

In MarketingProfs

Everyone thought Suzan was nuts to take on the scriptwriting job of crafting sales-training videos for the European divison of a major US car manufacturer. Turns out, she was: the job was both complicated and painful. But she emerged with some great advice for those who need to craft their messages for a global audience.

To read the entire article, visit: How to Write For A Multilingual Marketplace -- Part I

Small Business CEO -> a special thanks!

In Small Business CEO

A HUGE thanks to Steve over at Small Business CEO for mentioning our upcoming Webinar November 2nd! You can find Steve and his meaningful Small Business CEO blog at:
Small Business CEO Mentions The Global Small Business Blog Webinar 11/2/04!

What It Takes To Sell To The World -> Don't miss virtual workshop 11/2/04!

Are you about ready to sell to the world?

Then sign up for Laurel's upcoming webinar:
Click here for further information and to register: "What It Takes To Sell To The World" virtual workshop November 2nd, 10:00-11:00 a.m. CST (U.S.A.)

Here's what you will learn:

• Facts on "global fever" -- find out what it is and how to catch it!
• Understand who is going global and why.
• How to develop a global mindset.
• How to build a web site and blog.
• Twenty (20) factors to consider before you go global.
• Reference web sites to help you go global.

Don't miss the opportunity. Sign up today (only U.S. $50) to reserve your virtual place. See you November 2nd!

Service Franchises Are Going Global

In Startup Journal by The Wall Street Journal (10/8/04)

Global expansion tempts franchised service-providers. But some U.S. business concepts don’t translate easily overseas. Another consideration is to watch out for nimble copycats who follow in your footsteps on a local level and erode the market.

To read the full, interesting article, visit Startup Journal by The Wall Street Journal: Service Franchises Are Going Global

Trend: Small Businesses Are Going Global

In Small Business Trends (9/30/04)

A BIG thanks to the futurists at Small Business Trends! Co-editor Anita Campbell interviewed me and then put together a mini trend report highlighting which small businesses are going global and what opportunities lie ahead. The report re-affirms that the world can be your oyster provided you keep up to date on what is happening across the planet.

You can find the report here: Trend Report: Small Businesses Are Going Global

UPS CEO Says That All (Small) Business Today Is Global!

In Businesswire (9/29/04)

Decrying elevation of the issue of free trade into a political football, the chairman and CEO of UPS (NYSE:UPS) today called on small and large business alike to better explain to Americans the benefits of globalization and the disastrous effects of "economic isolationism."

He goes on to say ...

"Consider, for example, who's doing the exporting these days:

Some 97% of all U.S. exporters are small businesses and their ranks have tripled since 1992, Eskew noted. The value of their exports has increased over 300% since 1995. These exporting small businesses are at least 20% more productive than their non-exporting counterparts; they've experienced 20% greater job growth, and they pay wages and benefits that are at least 15% higher.

"But we can recite trade facts until we're blue in the face," Eskew continued, "facts like many, many more jobs have been lost to 'countries' called 'productivity' and 'technology' than to India and China. Facts like lower costs create more goods attainable by more people, improving lifestyles and creating better economic opportunities."

The facts mean nothing, he said, if the American public doesn't understand it can't retreat inside America; that all business today is global."

To read the entire press release, visit: UPS CEO Says U.S. Can't Afford `Economic Isolationism'; Challenges Business to Reverse Rising Anti-Trade Sentiment

How Nobel Winners See The World Economy

In the Wall Street Journal, special World Business Report (subscription only)

In yesterday's WSJ (9/27/04), they asked 12 of the 32 living Nobel laureates in economics for their views on a variety of issues related to the global economy. Here are some excerpts:

"Which economy do you expect to be the biggest 75 years from now: the U.S., the European Union or China?"

GEORGE A. AKERLOF, Koshland professor economics at the University of California, Berkeley: The European union. It has more people than the U.S. and per capita income should not be that much different. I think the current gap between China and the U.S. and the EU is probably too large to make up.

KENNETH J. ARROW, professor of economics emeritus at Stanford University: Unless there is a radical change in growth rates, China will be the largest economy in the world. I don't expect, however, per capita income in China to be as much as half the European level.

JOHN F. NASH JR., senior research mathematician at Princeton University: Well, since the European Union is an undefined area, as of the year 2079, if it then includes Russia, it should be the largest. If not, the U.S. would be likely, even though China and the U.S. have similar land area.

ROBERT M. SOLOW, institute professor emeritus and professor of economics emeritus at the Massachusetts Institute of Technology: In total output, probably China. In output per person, probably the U.S.

"Do you think the fruits of the global economy will be distributed more evenly 50 years from now, or less evenly, and why?"

PROF. ARROW: I think incomes will be more equally distributed in the future, if only because some large countries, China, India and Indonesia, are growing more rapidly (per capita) than the advanced countries.

MILTON FRIEDMAN, senior research fellow at Stanford University's Hoover Institution on War, Revolution and Peace: More evenly. Why? The major sources of income difference today are between the developed and the undeveloped countries. This intercountry difference will decline as globalization (you read it here first!) spreads and more and more countries find a way to achieve economic growth and prosperity.

CLIVE W.J. GRANGER, professor of economics emeritus at the University of California, San Diego: About the same. If population growth is not controlled, there will always be many poor people in the world.

PROF. SOLOW: Toss-up. The relative lot of the unskilled and uneducated will probably worsen, but there is the possibility of improved nutrition, population control and education as democracy spreads.

JOSEPH E. STIGLITZ, university professor at Columbia University: In 50 years, some countries in the developing world will have caught up, but there's a very high risk of a wider gap for others unless we do something markedly different about the disparity between Africa and the industrial countries. What we will see is a world in which the differences between the top and the bottom are larger. In China, a majority of people will see income increases and will see the gap reduced.