However, many firms, especially SMEs, need to understand them, their benefits, and how to apply them to their market diversification strategies. Let’s get into the details in this article.

What are Free Trade agreements (FTAs)? A practical definition

A Free Trade Agreement (FTA) is an arrangement or pact between two or more countries committing to reducing or eliminating restrictions on trade. According to the OECD:

“Globalisation creates opportunities for workers, consumers, and businesses and has helped lift millions out of poverty. Open markets strengthen economic resilience and diversify supply chains.”

In other words, with FTAs, participating countries can establish business rules that make everyone happy. In practice, FTAs create economic advantages by:

• Reducing or eliminating tariffs on many goods
• Simplifying customs procedures
• Opening access to services markets
• Providing rules on intellectual property, investment, sustainability, and procurement
• Making trade more predictable by establishing clear legal frameworks

For exporters, these benefits translate into competitive pricing, smoother logistics, and reduced regulatory challenges. However, when a comprehensive FTA is missing, friction or trade wars happen. For instance, the recent US-China trade wars were a result of an incomplete FTA covering all their trade partnerships.

It was also due to policies that exempted specific products from tariff-free status to protect local producers and manufacturers from foreign competition in their industries.

Types of FTAs and what they mean for your business

FTAs come in different forms, depending on the sort of arrangement or understanding between the involved parties. Here are the three most common types of FTAs and how you can benefit from them as an importer/exporter.

1. Bilateral Free Trade Agreements

A bilateral FTA is a trade deal between two countries. The goal is to reduce or remove barriers such as tariffs, quotas, or restrictive regulations. These agreements are direct in structure. Each partner sets clear terms that make it easier for their businesses to trade.

Bilateral FTAs often lead to lower costs for exporters. They also create simpler customs procedures. Companies entering a new market can gain predictable rules and fewer administrative hurdles.

2. Regional FTAs

These agreements involve several countries within the same region. The countries come together to form a trading bloc. The bloc allows goods to move more freely across its borders.

Take, for instance, the has a shared framework that supports mutual benefits among partner countries. It also helps create freer markets and stronger economic growth.

Companies with highly integrated supply chains typically benefit from Regional FTAs.

The agreements provide access to several markets under one regulatory system. Businesses do not need separate compliance strategies for each country. They also avoid extra levies when trading within the region.

3. Comprehensive Economic Partnership Agreements (CEPAs)

These kinds of agreements often cover services, investments, e-commerce, mobility of professionals, and deeper regulatory cooperation, instead of just goods. It is a free trade agreement between two countries that is more ambitious than a regular FTA, with the goal of promoting other kinds of investments while opening up trade.

The comprehensive scope of CEPAs makes them better suited to service providers, digital firms, engineering companies, or legal or consulting services. With CEPAs in place, partnering countries can facilitate mutual digital trade and open up the market for professionals

However, it’s crucial to note that the World Trade Organization (WTO) sets global rules that bind all FTAs. The regulator ensures that the advantages of an FTA are not granted to non-parties and that the agreement doesn’t lead to unfair trade practices.

How to read an FTA: A step-by-Step approach

FTAs are similar to legal documents, so they are usually voluminous, with hundreds or thousands of pages. However, they follow a similar structure. According to the EU’s Access2Markets guide:

“Reading a trade agreement becomes easier once you know what you are looking for.”

So, what should you look out for? We highlight them below:

1. Start with the Table of Contents

FTAs follow a structured format, with important chapters such as tariff elimination, rules of origin, customs procedures, investment provisions, and technical barriers to trade (TBT) being essential to review early on.

With these details, you can easily determine which parts relate to your product or service and take action, if necessary.

2. Check for tariff commitments

The tariff schedule is essential for exporters. First, find your product’s HS (Harmonized System classification ) code, then identify the correct tariff line, and check if tariff reductions are immediate or phased.

3. Understand Rules of Origin (ROO)

Preferential tariffs only apply when your goods qualify as originating in the partner country. If you do not meet the rules of origin (ROO), you will not receive the advantages of a free trade agreement, even when the tariff under the FTA is officially set at zero.

There are three common ROO tests to check:

• Value-add test
• Change in tariff classification
• Specific processing requirements

Manufacturers managing intricate supply chains may encounter challenges with rules of origin (ROO), yet accurate interpretation remains crucial. Misinterpretation, whether inadvertent or deliberate, can result in penalties, processing delays, and loss of preferential treatment.

4. Review customs and documentation requirements

Most FTAs outline simplified procedures, such as:

• Self-certification of origin
• Advance rulings
• Express shipment provisions
• Digital documentation

These details matter for operational planning and cost forecasts.

5. Check sector-specific annexes

Many industries, including automotive, pharmaceuticals, agri-food, financial services, and telecoms, have dedicated annexes that clarify specific licensing rules, standards and conformity requirements, limits on quotas, and professional mobility conditions

For service providers, these annexes often determine what you legally can and cannot do in the target market.

6. Check for services (If you’re not a goods exporter)

Service-focused businesses should also examine the core details of FTAs. These include market access commitments, national treatment obligations, intellectual property protections, and digital trade rules.

How FTAs fit into your market entry strategy

Using FTAs effectively requires understanding the law and finding legal advantages that support commercial goals. Here’s how they support market entry and diversification:

• Better Pricing Through Reduced Tariffs: Lower tariffs give you margin advantages. In price-sensitive markets, this can decide whether your product succeeds.
• More Predictable Costs and Logistics: FTAs reduce uncertainty around delays, documentation, and compliance.
• Access to New Markets for Services: Professional services such as IT, consulting, architecture, and engineering often gain new rights under FTAs.
• Safer Investment Conditions: Chapters on investment protection reduce risk for foreign-invested subsidiaries or joint ventures.
• Lower Market Entry Costs: Simplified customs, faster approvals, and recognized certifications can reduce time to market significantly.

How to apply FTAs to your business

• Identify relevant FTAs for your target markets
• Classify your product or service correctly
• Analyse tariff schedules
• Map your supply chain against rules of origin
• Prepare documentation and compliance processes
• Engage customs brokers or trade advisors early
• Incorporate FTA benefits into your market entry strategy

Common errors to avoid when using FTAs

Even experienced businesses can misinterpret FTA provisions. So, it’s best to maintain the best practices and avoid mistakes. Common mistakes include:

• Assuming all products benefit from zero tariffs
• Using the wrong HS code
• Overlooking ROO requirements
• Failing to maintain origin documentation
• Ignoring service commitments
• Assuming all FTAs cover digital trade
• Miscalculating input costs for ROO compliance

Why do modern businesses need to understand FTAs?

Trade patterns continue to shift. Geopolitical uncertainty is rising. FTAs are adjusting to these new realities. Businesses that understand how FTAs work gain an advantage.

Those who know how to read these agreements can build stronger resilience. They also position themselves for better international success.

In other words, FTAs are not just legal documents. They are strategic agreements that can shape where you source materials, where you establish distribution centres, how you price your products, and how you expand internationally with fewer complexities

Companies that have FTA analysis as a solid part of their market entry strategy are better positioned for sustainability than those that treat FTAs as negligible.

Make FTAs work for your business

FTAs are essential tools for many businesses Understanding them will better equip your business to compete globally, reduce trade costs, and enter new regions with greater confidence. That way, you can create new opportunities for growth, diversification, and competitiveness.

The post Understanding FTAs and how they apply to your business appeared first on Trade Ready.

Amidst that backdrop, it can be enticing to delay or defer your international expansion and wait. But it may not settle down soon. And sometimes the best opportunity to be bold is when your competition is caught up in overall market inertia.

Seize the day – don’t wait to explore new markets

Being bold means leveraging an untapped talent pool with deep experience, approaches, and tools available so you can efficiently de-risk and profitably accelerate your international growth.  It means that you no longer need to endure constraints in talent, local market knowledge and execution, or cost.  Combining these elements helps you thrive, despite daunting challenges, when you have so much at stake.

In fact, it can cost you more not to grow internationally, frozen by the moment.

There are tailwinds from Canada’s diversification strategies away from dependence on the USA. Other countries are also looking for new global partners boosted by Canada’s reputation of being a reliable partner. And you’ll find that international growth diversifies your business mitigating impacts from a slowdown in the Canadian (or your domestic) economy.

Beyond the direct business benefits from international growth, I really enjoy the personal growth I get from meeting people from other cultures, learning their perspectives and customs. I suspect you will enjoy it too.

The point is that you can efficiently bolster your team’s international experience without adding overhead costs. It’s about who you use, when and how you use them, and how you find and access them.

3 key actions to jumpstart your global growth

• Don’t be deterred in your international business ambitions by global uncertainty. The knowledge and tools are available to make it a smoother transition, removing talent, insights, and cost constraints. It may cost you more not pursue it.
• Seek experienced guidance. Value deep experience, proven in the markets you target, for the way it can accelerate your progression, and reduce the inherent risks associated with it.
• Explore available resources.Look for resources and tools to help you quickly and easily find and engage the right expertise, each time as situations and your business evolves.

At what stage in market expansion should you engage with consultants?

This approach to accelerating your international expansion can be complementary to initial steps you may have taken. The consultants we are focusing on here have deep knowledge from real experience in the countries you are focused on. They may not know all the countries you are considering and may not be necessary for basic research.

You might decide to engage them either after completing your target country’s primary research (publicly available data and reports, essentially desk research) to help you on your secondary research (in-market insights) to validate assumptions and draft directional plans. Or you might engage them after your secondary research and after choosing your target country, to inject strong local knowledge as you shape and update your plans.

Either way, FITT has excellent guidance, process steps, and information sources for both your primary and secondary research.

An untapped, high impact source  of international experience

I led off this article referencing the global instability and unpredictability we all face. That includes the pros and cons of AI. These cumulative challenges suggest to me that the value of deep business experience has never been higher.

Experience breeds resilience and efficiency from having traveled often steep learning curves.

Fortunately, there is a large and growing, but largely untapped, pool of businesspeople with extensive international experience that you can draw upon.

They are not generally career consultants, rather they have worked inside businesses and know how they work, including their international operations. Their breadth and depth of experience means they can be very efficient in whatever flexible use you need, without adding overhead in a less than full time role.

The untapped talent pool I’m talking about is the growing cohort of businesspeople aging up, with 20+ years of experience.  Society’s perception of age hasn’t caught up with the reality. Longevity can mean that people have added middle years of high productivity, not added years of ill health at the end of their lives.

To that point, the latest brain neuroplasticity research found that we are at our peak cognition, conceptualization, and innovation in our 50s and 60s.

A MIT, Northwestern, Wharton and the U.S. Census Bureau, found that age 50 business founders are twice as successful as age 30 founders. Because of their experience. And that experience can benefit you greatly.

An OECD study found that age 45+ businesspeople are almost always more productive than younger people. And contrary to perception, we are very comfortable driving and adapting to change and technology adoption.

Consider these 4 ways that businesspeople with 20+ years of experience benefit your business, most of it free value add that you don’t pay for:

• valuable combination of knowledge/judgment/wisdom
• enhanced soft skills (communication, collaboration, resilience)
• boosted team productivity by 20% (the benefit of multigenerational teams)
• quick onboarding time, often able to “hit the ground running” due to breadth of cross functional experience
• cost effectiveness from using them less than full time, without benefits and long term financial commitments

Much of this value is not easily quantified, which means that businesses usually do not recognize the full value of aging up workers, whose experience can rub off on your staff and help them grow as a side benefit. Of course, this growing pool includes many people who have earned FITT’s Certified International Trade Professional (CITP) designation.

And due to their experience, consultants can help you adjust and pivot when things don’t quite seem to be going to plan – they can be an early intervention resource.

Select consultants based on the specific needs of your business

Consultants with deep international experience span many different functions, so you can choose the one that best suits your needs. They may be very accomplished in B2B or B2C, product or services, sales and business development, marketing, finance, operations, general management, channel development, partnerships, technology, legal, logistics, and more.

You might even find you want to engage more than one consultant, each with complementary expertise, to help you make sure you are taking a comprehensive approach and not missing any key success factors or risks.

Imagine how much acceleration a medium-sized manufacturer, with no international experience, would get from temporarily injecting proven experience in its target countries without adding overhead. There’s no need to build those capabilities internally, with all the fixed costs that adds.

This kind of support can also buy you time to make informed decisions. See how the business does and identify when to invest in employees after some time in market – a lagging investment decision compared to investing in overhead before your business can sustain it. Using proven experience in part-time roles means you can afford people with top tier experience – an equalizer with your big competitors. A real game changer.

There are now numerous ways you can engage consultants, as non-employees, to leverage their experience in ways that suit your budget and needs, such as:

Where to find and access international trade consultants

The traditional way for businesses to find consultants is through their networks. But what do you do when the expertise is more specialized, like knowledge of specific industries and countries, which makes them harder to find?

As Statscan reported, although there’s a shortage of tradespeople, knowledge workers are not in short supply.  They are just hard to find, so there’s a mismatch. They may not, for example, be as many social media stars. But there’s no correlation between how easy they are to find and how much value they create for you.

There’s a growing number of ways to find the expertise you need, including specific online services marketplaces, traditional recruiters with offices in many countries, boutique Canadian recruiters with an international network, and of course LinkedIn. There’s a growing use of AI to speed up the process of finding and matching consultants to your requirements.

Each of these options can have drawbacks such as high cost, slow turnaround times, an overwhelming number of candidates, or serving a narrow set of needs (which forces you to use multiple sources for multiple requirements). There can also be a lack of verification of someone’s experience. Which makes FITT’s CITP designation helpful.

Building a bolder vision and true competitive advantage

Injecting temporary deep experience doesn’t have to be a one-off or a rare exercise. You can use proven consultants flexibly anytime you face some challenges or opportunities but find that you have knowledge gaps. Quickly scale up or down. Proactively, or reactively when crises hit.

Sequentially injecting experience can make you more agile, more customer-driven, and can improve your execution and results.

Frequently bringing in these “guest workers”, not just for advice but embedded as the situation warrants, can help develop your people and even be a recruiting strategy.

In short, it can help your vision be more ambitious, not resigned to constraints, and improve the odds that you’ll achieve it.

Try a two-pronged approach for market-entry support

Having firsthand experience initiating international business, I know how daunting it can be wading into a different country, culture, and business community. To be successful, it’s vital to use deeply experienced consultants who know your target country, to help you plan and execute your market entry. I only wish these resources were available to me when I began my journey into international business.

You may want to consider a 2-pronged approach to engaging consultants for your international growth:

1. Home based

Engage a consultant based in your home market, i.e. a Canadian-based consultant with 20+ years of experience, for a Canadian company,  someone who has experience in your target country but also knows your culture, to help you draft a market entry approach, assess risks and opportunities, provide guidance on what to look for, and help in choosing the right local partners. There’s a saying: “trust but verify” – deep experience can help with that.

2. Locally engaged

Engage a local proven businessperson in your target country to provide the most current insights, feedback on your plan, and leadership in helping implement it. Recruiters with international offices, partnerships, and marketplaces can help you find the right fit.

In uncertain times, waiting can feel prudent — but momentum favours those who act with intention and insight. By tapping into seasoned international expertise at the right moments, you can reduce risk, accelerate learning curves, and compete far beyond your size.

Global growth doesn’t require building everything from scratch; it requires knowing who to bring in, when to engage them, and how to leverage their experience.

With the right support, international expansion becomes not just possible, but practical — and a powerful source of lasting competitive advantage.

The post How to tap into the best resource for export success – experience appeared first on Trade Ready.

From an early age, Audrey Marie-Nely had a deep curiosity about different cultures, languages, and global markets. Born and raised in France, her academic and professional journey took her across continents—from Europe to Canada and South America—where she explored the complexities of international trade and innovation.

Today, as a Certified International Trade Professional (CITP) and a graduate of the FITTskills program, she leverages her expertise to help businesses navigate the global marketplace.

Building her career foundation with education

Audrey began her academic journey by working towards a Diploma in Business Management, which provided a solid foundation in key business principles. Her growing fascination with international trade led her to pursue a Bachelor’s degree in International Business. “I’ve always had a strong interest in the world, its languages, and its cultures,” she shares.

“During my studies, the concept of ‘glocalization’—how companies adapt global strategies to fit local markets—really resonated with me. I wanted to be part of helping businesses thrive internationally.”

Recognizing the increasing role of technology in global commerce, she took her education a step further with a Master’s degree in Innovation and Entrepreneurship.

“Technology is revolutionizing trade, from digital marketplaces to blockchain for supply chain transparency. I knew that to stay ahead, I had to understand how innovation intersects with international trade.”

Doing meaningful work supporting small businesses and entrepreneurs

Audrey’s professional journey has been just as global as her education. After completing her studies in France, she moved to Canada, eager to experience a new business environment. There, she immersed herself in the world of entrepreneurship and small business support. “I had the privilege of working with small businesses across various industries, helping them understand the challenges and opportunities of international expansion,” she recalls.

One particularly rewarding experience involved guiding a small Canadian business in its early steps toward global trade.

“The client needed help with logistics, risk assessment, and adapting marketing strategies for different regions. It was incredible to see how foundational knowledge—what seems basic to us in the field—can be transformative for a business owner just starting out.”

Her passion for international business took her further, leading to a stint in South America during her master’s program. There, she explored and connected the local startup and innovation ecosystem, gaining valuable firsthand insights into how businesses in the region approached global trade.

“Meeting tech founders and entrepreneurs, I saw their resilience and creativity in overcoming challenges unique to their markets. It reinforced my belief in the power of global thinking.”

The FITTskills experience: bridging knowledge and application

Despite years of education and professional experience, Audrey still sought out ways to refine her expertise in international trade. That’s when she discovered the FITTskills program.

“I was looking to update my knowledge and expand my practical skills, and FITTskills was the perfect fit. The courses provided up-to-date insights and real-world applications that I could immediately integrate into my work.”

One of the most impactful courses for Audrey was International Trade Finance. “Understanding financing options, risk management, and payment methods is crucial in global trade. The course helped me work more effectively with key partners and strengthened my ability to support businesses in securing financial success internationally.”

She emphasizes the importance of not just learning the material but actively applying it.

“When you take a program like FITTskills, you can find ways to integrate the concepts into your job. It makes the learning experience far more valuable.”

Achieving the CITP, a mark of professional excellence

Earning the CITP designation in 2021 was a significant milestone. “The CITP represents excellence and lifelong learning in international trade. The world of global business is constantly evolving, and staying current is essential.”

Beyond the personal sense of achievement, the CITP designation has had tangible benefits. “Having ‘CITP’ next to my name has opened doors. It builds credibility among clients and colleagues, making it easier to establish trust and authority in the field. It has also connected me with a community of international trade professionals, leading to valuable collaborations.”

The power of mentorship and leadership

One of the most unexpected yet rewarding aspects of her journey has been mentorship. “Before moving to Canada, I didn’t realize the power of mentorship. Through a FITT mentorship program, I was matched with an experienced trade professional who provided invaluable guidance. Even though the formal program has ended, we still keep in touch.”

Now, Audrey is paying it forward, mentoring individuals across various fields.

“Mentorship is a way to give back and help others navigate the complexities of global trade. It’s something I plan to continue throughout my career.”

Beyond mentorship, she serves on the Global Startups Advisory Committee, where she provides strategic advice to startups entering the Canadian market. She also participates in a loan committee that evaluates funding applications from small businesses.

“Being involved in these initiatives allows me to support businesses at different stages of their growth and contribute to the broader trade ecosystem.”

Making an impact in the rapidly evolving future of trade

With a well-established global career, a CITP designation, and a passion for international business, Audrey envisions having an even broader impact in the coming years.

“My goal is to continue helping businesses expand into global markets, leveraging my network and expertise to drive success.”

She can see herself stepping into more thought leadership roles, participating in industry events, and contributing to discussions on the future of international trade.

“Global trade is evolving rapidly. Whether through advisory roles, content creation, or speaking engagements, I want to be part of shaping what’s next.”

For those considering the CITP designation or the FITTskills program, Audrey’s advice is clear: “Invest in your education and professional development. The world of international trade is constantly changing, and staying ahead requires continuous learning.”

“The CITP and FITTskills have been game-changers for me, and they can be for others too.”

Today and into the future, professionals like Audrey play a crucial role in bridging markets, fostering innovation, and helping businesses navigate the ever-changing landscape of international trade. Her journey—from a student in France to a globally recognized trade expert—is a testament to the power of lifelong learning, adaptability, and a passion for global business.

The post CITP Spotlight: Audrey Marie-Nely – Associate Vice-President, Banking, RBCx appeared first on Trade Ready.

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.

The post A Guide to Preparing an International Business Plan appeared first on Trade Ready.

As far back as he can remember, Maxime Anselme Laleye had envisioned a career in international trade. Initially, his goal was to sell manufactured agricultural products across borders. After completing his Bachelor’s in Business Management at Ecole Nationale d’Economie Appliquée et de Management, Université d’Abomey-Calavi, Benin, and gathering a few years of professional experience, he decided to enroll in a master’s in business management program in the same school. 

“My objective was to develop an analytical capacity to be able to solve entrepreneurial problems and understand the opportunities that a company could seize, both in the national and regional markets.”

His interest in international markets and the ban on small Beninese companies from marketing seafood in European markets spurred his research work for his master’s degree that entailed analyzing the complexity of regulations that governed the continuous supply of products to international markets. 

This set the trajectory for his career in global trade as he found his niche in guiding small and medium-sized enterprises/industries on how to seize opportunities in international markets. 

Recommending solutions that helped boost international purchases 

While working as a Head of Administrative Service in a company where a large part of the activities was import-oriented, his CEO asked him to form a team to collaborate with an external purchasing consultant. Maxime then came up with a well-researched document that recommended solutions to translate the objectives of the collaboration into measurable actions. His efforts were immensely appreciated, and he was publicly applauded by the top management, which also resulted in an upgrade to his professional responsibilities. 

Contributing his skills to the design of a unique project 

Maxime’s proudest professional accomplishment happened when he was working as Marketing and Sales Manager in a company that designed and manufactured light equipment for processing agricultural products like cashew nuts and palm nuts. These production processes greatly increased the volume of goods customers were able to manufacture. He began by collecting information on regional markets and succeeded in identifying a few niches of captive markets. 

This is when his skills were called upon to contribute to the design of the “Project for the popularization of construction techniques and the use of light agricultural product processing equipment”—a project that aimed to: 

• improve the arduousness of artisanal transformation processes through the popularization of construction techniques and the use of semi-mechanized processing equipment for agricultural products (cassava, palm nuts, cashews, etc.)
• strengthen the marketing of goods to improve the income of small and medium-sized enterprises

The rewarding aspect of this project was getting to analyze and identify regional captive markets and offering turnkey project solutions:

“Providing high value-added solutions that improve the manufacturing practices of small and medium-sized enterprises and seeking regional market opportunities that increase the income of manufacturers and vulnerable layers is rewarding and empowering.” 

Find a happy middle ground that satisfies all parties 

Maxime believes that each market and every customer has its own set of constraints and specificities; nothing is concrete until a transaction is completed to the satisfaction of all stakeholders. Therefore, although the process of settling an international transaction can be very laborious, he recommends ensuring the conformity of all commercial documents and building a relationship of trust with the stakeholders. 

Maxime’s favourite FITTskills course 

“That’s a difficult question to answer, but I’d say my favourite is “Products and Services for a Global Market.” 

Learn how to adapt and conform your products and services to different regulatory, legal, cultural, and consumer/client requirements in international markets with the online FITTskills course, Products & Services for a Global Market.

Creating trust and establishing business relationships with a designation that spells excellence 

Maxime had been aiming to earn the elite CITP | FIBP designation since 2012 to be able to truly embody all that it stands for. Being conferred with the designation is the culmination of a goal that he had envisioned for himself almost a decade ago.  

“It is a feeling of accomplishment. I am proud to belong to this elite group. As a CITP, I am an asset to any organization with which I can interact”

Maxime now looks to expand his expertise to newer horizons. He is confident that his qualifications and credentials will lead him to exciting opportunities in Canada within the international trade finance industry, where he could gainfully use his skills to help companies go global. 

With his single-minded focus and keen business acumen, Maxime is all set to expand his horizons to limitless possibilities. 

The post CITP Spotlight: Maxime Anselme Laleye, Export Trade Specialist  appeared first on Trade Ready.

That’s why, last week, Startup Canada hosted a Twitter Chat with FITT and an all-CITP®|FIBP® (Certified International Trade Professional) panel of business experts. These seasoned professionals gave practical advice on “How to weather-proof your business.” With varied markets, supply chain disruptions and so many other hurdles in the international business landscape right now, they offered up international market entry strategies, risk-mitigation techniques, and personal stories on how to best navigate these waters.

The Twitter Chat featured:

Daniel Lewis, Author, and International Speaker, CITP
Lora Rigutto, Loyalty and Engagement Manager, FITT, CITP
Craig Atkinson, Founder and Director, Lexmerca International Trade, CITP

Question 1: Staying agile and adaptable

The chat started off with this question: “Business is always changing, but some changes, we never see coming. How do you stay agile and adaptable?”

CITP Lora Rigutto had sage advice about upskilling and updating your knowledge in different areas of business.

While CITP Daniel Lewis answered with the following:

“To stay agile and adaptable I suggest diversifying and developing your skills. Become more knowledgeable about your products, industry, or new industries to gain a competitive edge. Consider becoming an educator, expert, or content creator in your field.”

While I was building my tea business over the past 10 years, I also found opportunities to put myself out there as a Public Speaker and Brand Strategist. When the pandemic hit and rattled my supply chain, I switched on my virtual keynotes and brand strategist superpowers. As a result, I have been able to weather the storm and still generate good business. #StrategicPivot—Daniel Lewis, Author, and International Speaker, CITP

Meanwhile, CITP Craig Atkinson talked about remaining on top of your sector specifics: “I think the best way to stay agile and adaptable is to stay abreast of what is going on in your sector and the potential impact of disruption. Adaptability depends on having a business structure that is flexible.

The second question prompted some excellent advice as well:

Question 2: Planning for global growth

Daniel Lewis chimed in first, suggesting that businesses need to start by asking the questions “why?”:

” I always suggest starting with ‘WHY?’ Whether starting or expanding your business internationally, asking WHY first can provide you with all the reasons (or lack thereof) for a specific course of action. WHY are you expanding?  WHY now?  WHY this market?”

“At the same time, I decided to polish my professional image and sharpen my international business knowledge by becoming a #CITP. With these tools on my belt as a foundation, I was ready to rock n roll!”

“If your WHY is compelling enough, then you can get to the HOW? Approached my global growth plans by first going through international business training where I developed an export plan to better materialize my goals and ambitions.”

Meanwhile, Lora Rigutto gave this nugget of wisdom:

If you fail to plan, you plan to fail. You need to determine how to move goods or deliver services to a target market, overcome regulatory or cultural hurdles, and use market entry and international sales and marketing strategy with clear and measurable sales and marketing objectives.—Lora Rigutto, Loyalty and Engagement Manager, FITT, CITP

Question 3: Weather-proofing and risk mitigation

Question three, “How do you weather-proof your business your own business as you grow globally?” got down to the details and surfaced some great insights, including notes on addressing knowledge gaps from Lora Rigutto.

Daniel Lewis, on the other hand, talked about creating multiple contingency plans with an “If this” guide:

Question 4: Risk and business

Question four addressed an important reality about business: that it always comes with risk.

There were multiple answers for this one from panelists and participants alike:

Question 5: How to expand

Question five dove into global expansion, a quintessential topic for SMEs, and it garnered advice that ranged from influencer adoption strategies to joining trade shows and trade missions.

Question 6: When to expand

Knowing exactly when you’re ready to expand your business is critical for success, and that’s what question six tackled:

Questions 7 and 8: Economic risk and opportunity

While questions seven and eight talked about economic risk and the opportunities they present. Panelists and participants recounted their experiences during the pandemic and how they used these to create opportunities for themselves:

Final Thoughts and Questions

And with that, the official questions were over and the panelists and participants were given an open mic to talk about topics, such as their CITP experiences:

And the single most important thing they did to weather-proof their business over the past year:

A fantastic gathering of great business minds, the Startup Chat gave emerging entrepreneurs and SMEs a lot to think about, in addition to access to Startup Canada and Startup Global’s plethora of resources, contests, and funding opportunities too.

Learn more about Startup Canada’s Startup Global Portal here: http://ow.ly/OBns50FXewH

Don’t forget, once you register, you can access several FITT presentations, workshops, videos, and even a discount on FITTskills training.

The post How to weather-proof your business: CITPs weigh-in with Startup Canada appeared first on Trade Ready.

Reason 1: they don’t build a strong local base.

Before businesses can grow in the international market, they need to grow a foothold in their local markets.

When businesses flourish in their base market, they build their brand and grow capital that can be used to fuel expansion and adjust their products and services before they reach out to a broader base of consumers.

Establishing this base within your local markets is usually easier than trying to build within a foreign market because you usually have a good understanding of your local market and consumers. Companies can leverage this knowledge to launch a product or business and grow momentum that propels their successful entry into international markets. It’s also important for businesses looking to expand internationally to know whether their local market shares a need with their prospective international market—as this crucial factor will determine the demand abroad.

Reason 2: they fail to connect with potential markets.

To move a product into a new market, the product has to be scalable. While a company benefits from having a strong localized base to bolster expansion efforts, products that are too localized can’t scale well to new markets. Many businesses assume that scaling their product is a matter of transferring the same product with a similar marketing plan into a new market. But gaining traction from new markets requires buy-in from local investors who can help businesses understand international market needs and make connections to international consumers. Every business needs to understand how their product will be perceived by their new potential market and how it may need to be changed to help it succeed. Small details like package colouring or phrasing can have huge consequences when entering a new market, so having a local investor to help you understand these critical nuances is foundational to success.

Reason 3: they don’t find the right markets for their products.

There’s more to connecting with a potential market than finding the right investors and beginning to connect with consumers. The market also must generate enough income to warrant investing there.

Many companies expand using overly simplistic qualifiers for new markets: They choose markets because of geographic convenience or cultural similarities to markets that have already seen success. In addition to meeting a need or solving a problem within the market, an expanding business must be sure that the market has enough consumers with enough income to support the product. On top of that, the product must be culturally relevant to the market.

Avoiding common mistakes made by international startups

Careful planning is the best way to avoid failure when expanding your business internationally. If a business launches with global expansion in mind, they should plan for both local and international business growth. That means developing an original localized market that can be focused on initially. As the business strengthens with localized growth, the focus can turn to exploring potential markets and then onto how the product or marketing plan may need to be tweaked to appeal to the new market. Smart businesses also use the lessons they learn with their initial launch to create a more effective plan for the new markets they enter. By balancing a local base with the possibilities created by new markets, businesses can seek international growth while having a solid foundation and understanding of markets that are likely to bring continued success.

The post 3 common reasons why startups fail internationally (and how to avoid them) appeared first on Trade Ready.

There are many challenges to conducting business with overseas partners. Different laws. Different regulations. Different financial reporting. Different cultures. Different values. It can be tempting — especially when there’s money on the table and big plans for the future — to simply trust the integrity of foreign partners and get on with the art of the deal.

But beware.

You wouldn’t order a product from overseas without doing a little due diligence. And you wouldn’t sign a deal with a domestic partner without first verifying their credentials. So why would you enter into a deal with a foreign partner without conducting a background check?

The good news is, that with a few basic steps, you can determine whether business with a prospective foreign partner is even worth pursuing.

Mining a Foreign Opportunity

You run a manufacturing company that makes machine engines for the mining sector. You have a quality business and do well financially but you’re always looking for ways to grow your sales. The prospect of expanding into foreign markets is extremely appealing.

As luck would have it, you receive an email from an import company based in one of the hot, new emerging markets of the world. The president of the company, Mr. Jones, says that his company, Jones Engineering, wants to import your machine engines. (We’ve used a fictitious business scenario but the example can be applied to all sectors.)

You know all about emerging markets and how their growth is driving commodity prices ever higher. Big profits are being made in the mining sector and overseas companies are investing big-time in equipment and technology. You see an opportunity to cash in. It sure looks like a perfect storm of profit.

Mr. Jones places an order for two engines at $10,000 each. He insists that you don’t ship the engines until you receive his bank draft of payment.

The bank draft arrives and you ship the engines. Mr. Jones confirms receipt, thanks you for your prompt service and promises to place future orders with you. One month later you get another order from Mr. Jones. Once again you receive payment promptly and Mr. Jones subsequently confirms receipt of the order.

Another month goes by. You receive a third email. This time Mr. Jones tells you he has an urgent situation that could be extremely profitable. He has received a rush order from his government’s mining authority for 30 engines to be used in an ambitious expansion program. The only problem is the engines have to be delivered within three days.

Mr. Jones has already checked with various air freight companies. He can meet the deadline if you can ship the order by tomorrow. He asks for your fax number so he can fax you a copy of the purchase order.

You do a quick calculation. Mr. Jones’ order is worth $300,000 and it will net you almost half that as profit. It will also clear out your inventory. Reassured by your previous transactions and a copy of the government purchase order, you confirm that you will ship the engines tomorrow. Your foreign business partner says he will initiate a wire transfer tomorrow for the entire sum plus estimated air freight charges.

The Mine Collapses

After keeping a crew working all night on overtime, the engines are ready for shipping. The air freight company arrives and loads the engines. As the truck drives away, you congratulate yourself on a job well done.

You email Mr. Jones and he confirms that the wire transfer was sent to your bank. He provides you with the tracking number. You call your bank to alert it to the pending transfer and instruct it to move the funds to a term deposit when they arrive.

Tomorrow comes and goes. You don’t get a call from your banker. Finally you call the bank and are told that your $300,000 has not arrived. You email Mr. Jones who assures you that the transfer was sent.

The next day, you receive a concerned call from your bank. The bank advises you that the electronic tracking number you were given is invalid. You immediately email Mr. Jones but don’t receive a reply.  In fact, you never hear from Mr. Jones again.

You’ve just been scammed out of 30 engines with a cost of $150,000.  Your mining deal has collapsed.

Digging for Details

The fictitious case of Jones Engineering is a classic import/export fraud scenario to which many businesses, especially small businesses, have fallen victim. It’s also an example of why, when conducting business in foreign jurisdictions,

Special care must to be taken before making a large financial commitment to overseas partners.

Digging for details on the backgrounds of business partners can help screen out most fraudulent operators. Due diligence usually weeds out the rest. But fraudsters feed on the psychology of business people who want to make the big deal. It’s easy to fall victim to this type of fraud.

8 steps to screen foreign business partners

So how can you protect your business from frauds of this nature? And how can you separate the legitimate business opportunities from the dubious ones? Here are eight basic steps to help you screen foreign business partners.

1. Search the Internet. Legitimate companies tend to have a web presence. A primary presence such as a corporate website is good. A secondary presence, such as references on discussion boards or referrals on industry websites, is even better. And don’t forget such useful tools as Google Maps (the street view can be useful in giving you a realistic picture of businesses operating in foreign countries).
2. Check the numbers. Ask for the company’s phone number, fax number and business address. Search the Internet for those numbers and place close attention to anomalies, discrepancies in addresses, multiple locations and numbers, or contact information that belongs to companies of different origin or name.
3. Get the licence. Ask for a business licence number and a national tax registration number and confirm these numbers independently with the responsible governmental agency, if possible.
4. Read the catalogue. Ask your new partner for a copy of their catalogue. If they are doing legitimate business, at the very least they should have a price list. Similar corporate documents, such as annual reports and prospectuses, may also provide useful information.
5. Ask for customer references. Try to get a customer referral from a Canadian or U.S.-based customer. Make sure you get two or three from different geographic areas, but be aware that the references provided could be accomplices of the fraudster.
6. Check with our government. Global Affairs Canada is a useful resource for the verification of potential foreign business partners.
7. Check with their chamber. Just like in Canada, foreign countries — even emerging ones — have chambers of commerce or similar entities. It doesn’t hurt to check with a company’s local chamber to make sure your partner is legit.

If you feel it is warranted, you might also hire legal counsel or an investigator with ties to the country in question to continue the due diligence process. Most international law firms have the capability to undertake such engagements. I also suggest that companies explore import/export insurance and similar vehicles. Insurance policies vary widely and you must ensure that you understand your coverage.

Fraud is a cat-and-mouse game where the fraudster is always looking at new ways of avoiding detection. They even study checklists such as mine for ways to nullify its effectiveness. But if a potential business partner passes all these tests, then it’s reasonable to take your due diligence and credit granting process to the next level.

Fraudsters prey on human psychology. The promise of a big score can be powerfully blinding.

So keep that in mind. An ounce of prevention is worth a ton of cure — or the thousands of dollars you’ll keep in your pocket by screening foreign business partners and detecting fraudsters early in the game.

The post How to properly vet international business partners – a cautionary tale appeared first on Trade Ready.

Your business is up and running and things are going great. Now it is time to begin the process of internationalization, taking your business to new, untapped global markets. Everything looks great! And then you get hit by COVID-19 and the resultant global economic downturn.

How do you ensure that not only will your business survive, but ensure that it can maximize its gain during this (or the next) disastrous global crisis?

There is a lot that can be done, and it will take a great deal of work, but the results and returns are well worth the effort invested in ensuring your international business is both literally and figuratively virus-proof.

Rather than panic, the business owner whose company is properly positioned both domestically and internationally can thrive, even amidst these historic economic anomalies.

A major part of any international campaign revolves around language. This is just as true in the global fight against COVID-19 as it is in any global marketing campaign. Medical translators from around the world are working hand-in-hand with academic, scientific and medical institutions. Their role is indispensable. They are providing medical translation services day and night to ensure that all research and information about COVID-19 is translated quickly and accurately and made ready for immediate global distribution. The best part is, they can provide the same service for you and your business, even during a global pandemic.

Now’s the time to bring your business online

According to many sources, not only is the “Internet Economy” one of the largest, in various studies, the overall growth of the internet economy, most notably in terms of ecommerce, has outpaced other economic growth by a wide margin. According to Statista,“In 2019, retail e-commerce sales worldwide amounted to $3.53 trillion”. Online shopping is one of the most popular online activities worldwide. The chances are pretty good that if you are ready to take your business international, you have already established an online presence.

This is not always the case though, as some companies will always be springing up with innovative concepts, and moving directly onto the international stage. In such cases, there may be a good deal more work involved, but it is still possible to rapidly move online and establish a business designed to capture a large portion of the potential markets.

Ready to explore ecommerce? Learn how to set up and optimize each step of your e-commerce process to meet the ever-changing demands of customers

Live interpretations and even translation agency offices have suffered just as much as most brick and mortar businesses during the current global pandemic. Those that have been thriving have an established presence online. Most of them have already taken their online presence international, but for those companies who have not yet established an online presence, this may not be immediately possible.

Some businesses may be incapable of moving completely online, and as such, may suffer some during these times of global economic turmoil. That does not mean that they cannot move portions of their business online.

For those companies that do have an established online presence, there is a host of benefits and different ways to ensure that the company is on solid ground. The key to a successful international campaign is going to be in how well you can utilize your current marketing strategies and materials, and where you must tweak them and adjust them to reach a larger global audience.

Repurpose traditional marketing strategies

Once you know there is a demand in a new market, then it is the job of the marketing and advertising materials to create the desire to fulfill that demand with your products and/or services. You likely already have a website, some videos, maybe some podcasts and other marketing materials online, but now all of those have to be made anew so that they are ready for the new market, right? Wrong.

Your website can be converted into numerous languages using a number of different tools and methods. However, translating is not enough. Take some time while translating to look at all of the little personal cues that are in the website content, and replace them with cues that will be equally effective in the target language.

Certain analogies, and even some words, will not translate well into other languages, and these points should be taken into consideration as well. Replacing the details in order to meet the expectations of a new audience, speaking to them on their own terms, is known as “localization”, and it is all about creating the ultimate customer experience on a very personal level.

If you have a video marketing campaign already going, so much the better. While it may sound like a great idea to begin an entirely new video marketing campaign in your efforts to internationalize, it is not only unnecessary, but may prove to be more detrimental than actively working to adjust your existing video selections.

Posting all brand new materials in any online advertising campaign that ages is probably not a great idea, especially if there is already some finely aged and tuned marketing material already posted. Brand new videos with only a few hundred views will not be viewed from the same perspective as older videos with thousands or more views. Fortunately, there is a very simple solution that will help you to internationalize the videos without much effort at all. There are numerous benefits to using video translation services to create closed captioning for all of your videos.

On Facebook, 85% of videos are viewed without sound, so the first and most direct benefit is the ability for your potential customers to watch your videos without sound while still gaining all of the relevant information.

The SRT files for closed captioning are also indexed by the search engines, both on YouTube and on the individual search engines. The number of keywords will increase, the ranking on the search engine results page will increase, and so will the number of times your video makes the YouTube recommended list. It is also remarkably easy to include closed captioning in additional languages for all of your video campaigns online.

Now, your videos will also rank for the relevant keywords in any foreign languages that you are targeting in your internationalization efforts, replete with well-aged videos and the increased consumer confidence that comes along with it. These same principles can also apply to podcasting through the use of transcription and translation services.

Maximize your international marketing campaign with split testing

Once all of the preceding steps have been taken, there are two final steps that should be an ongoing part of your internationalization in terms of marketing and advertising. As mentioned, localization is all about creating the ultimate customer experience. It may be ensuring a smooth transition for the user as they begin their journey on their home computer, and continue it on their cell phone on the go. The continuity of connection is key to successfully engaging your customers in that regard.

Have you ever seen a grandchild out with their grandparent? The child, seeing something amazing, may shout out a current expression that the grandparents are absolutely clueless about.

Even in the same geographic regions, with the same accents and the same tendencies, each generation will have its own common phrases and expressions, idioms and vernacular.

What is the target demographic for your international campaign? Find and target that market, but continue using the process of split testing in order to ensure that all of your localization efforts are as effective as possible.

Split testing is all about setting up dual advertising campaigns and running them for a set length of time. After the time has expired, the results will be tallied up and the best campaign kept, while the poorer performing campaign is discarded and replaced by the better performing one. Ensure none of your discarded campaigns are lost, as some campaigns may still perform well, even if not as well as the winner. There may also be key factors that will help to indicate which portions of the marketing and localization campaigns are effective and which portions are not. Combining the more effective portions into one can also produce very positive results.

The safest investment of all at present, seems to be reinvesting in your company. The potential of the Internet Economy is endless and international. So why not put your resources to use online, and bring your business to a whole world of customers?

The post Going global online in times of crisis appeared first on Trade Ready.

For many organizations looking for a presence in a foreign market, the first step is to establish a representative office. Opening a branch office is a foreign direct investment entry strategy. It is often used as the first step in a market entry strategy, to gain a foothold, make an organization’s presence known and obtain valuable information about the target market.

A representative office is a good way to get solid information about market dynamics, customer preferences and product suitability. It can also lobby, on behalf of the organization, to remove regulatory and other types of barriers. Virtually any type of business might benefit from using a representative office as the initial market entry mechanism. A small service-type business may never evolve beyond the representative office, while a capital-intensive business may use the representative office as the first step in a multi-stage strategy.

Retail outlets

Some organizations go beyond the representative office to create a network of retail outlets on behalf of the parent organization. Such outlets might be wholly owned and operated by the parent, as is the case with Walmart, or they can be dealerships, owned by operators with an exclusive relationship to the parent.

Establishing a retail outlet gives the parent organization direct control over the whole distribution chain, from initial production to final sale. It puts the organization in direct contact with its customers, allowing for a closer monitoring of their reactions.

However, it also makes the organization directly responsible for hiring and training staff, managing inventory and operating the outlets. This may be less an issue of cost than of administrative complexity. Generally, only large corporations handling significant volumes of merchandise geared for a mass market will be interested in controlling their own retail outlets.

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!

Case Study: Taste Spain

Taste Spain, a Spanish food vendor, set up two wholly foreign-owned enterprises (WOFEs) to meet growing demand for wine and food products in China.

Through market research, the organization discovered that China’s demand for consumer food and wine products is great but supply is limited, creating vast opportunities for newcomers.

Taste Spain initially set up a WOFE with the business scope of importing and selling wine. It found that the distribution network was fragmented and time consuming to navigate. It also found that warehouses were badly managed, so it decided to set up its own storage facilities for greater quality control.

After increased demand from distribution partners, it decided to set up another WOFE to import and distribute Spanish agricultural goods and food.

From submitting a sample for inspection to receiving approval from the General Administration of Quality Supervision, Inspection and Quarantine of P.R.C. (AQSIQ), the entire process for labelling approval took three to four months.

To protect its intellectual property, Taste Spain registered its trademark with the China Trademark Office (CTO) in both colour and black-and-white versions. The entire trademark registration process took about 18 months.

Advantages and disadvantages of opening a branch office

Opening a branch office in a target country is a relatively simple way to establish a presence, gather useful intelligence, network, perform product testing or even conduct marketing before making a more serious commitment of resources. However, it will incur costs and could present tax or legal problems. Property leases also have to be dealt with.

Owning a retail chain overcomes most market barriers. It facilitates gathering intelligence about customer preferences and supports a high level of responsiveness to customer demand. It gives an organization complete control over how its products are positioned, advertised, marketed and sold. The organization can train its staff to respond to customers in a certain way. It can use its retail outlets to deliver after-sales service. This strategy also gives the organization direct contact with the end-users of the product, enabling it to remain responsive to changing tastes.

However, this strategy is very expensive and time consuming. The organization must assume responsibility for every link in the distribution chain and consider issues associated with fulfilling legal and tax requirements.

When is opening a branch office a suitable strategy?

Opening a branch office is a strategy that organizations should consider if they:

• Want to establish or expand their presence in a target country relatively easily
• Can devote the managerial time required to employ personnel, find and manage offices and maintain operations
• Can deal with the legal aspects of being liable for civil action taken against the office

The post Is a representative or branch office your best option to expand to new markets? appeared first on Trade Ready.