THE MAUDUIT GROUP

If you have gone so far in our Web Site, it is that your company has determined that in order to optimize its growth and remain dynamic and viable, it has to become global in its outlook, making decisions as to profit alternatives on a worldwide basis. You certainly came to that reality through your planning process. See also Global Strategic Planning.

At an early stage of your international markets evaluation for your products or services and during the initial approach to a foreign market penetration, an analysis of interregional shifts, urbanization, technology, transportation, competition, social pressures, local expertise, changing buying patterns and selling outlets, government actions and rules and regulations, etc., should be investigated and carefully analyzed.

Company policies may dictate certain basic operating patterns or preferences, but local conditions and laws may demand important modifications. A company that is rigid in its style of operations, may be passing up opportunities for greater profits. None of the many possible routes to market penetration should be overlooked in a company's review of its approaches to global business.

There are numerous approaches to penetrate a foreign market, and within each approach as many variations as there are cultures, languages, currencies, etc. Some of them could be defined as:

* Domestic Export Sales
* Indirect Export Sales
* Direct Export Sales Through Outside Distribution Channels
* Direct Export and Sales Through Local Company Sales Organization
* Licensing
* Assembling
* Manufacturing
* Joint Venture
* Combinations of some of the above
* Others - approaches tailored to the prevaling conditions of a specific market.

One of the major ingredients for succes is to choose the right alternatives. How to choose the right alternatives and make the most of them are constant problems facing every business. At this stage of your market penetration planning, an experienced, hands-on consultant would be of great help.

* Domestic Export Sales
We also call the Domestic Export Sales "spot sales" and "export sales desk". These sales are mostly "orders taking", orders coming from domestic organizations which might have overseas subsidiaries or from export/import houses that buy and sell for their own customers. These sales might also include bid on tenders from foreign governments, or private organizations, with buying offices in the domestic markets. Tenders issued by a foreign entity, in the foreign market, to be transacted locally, require a different approach and organization than a mere "export sales desk".

* Indirect Export Sales
It is basically marketing your products or services through another company or sales agency. It could be an import/export house, an export managing firm or just a company that already has an international distribution network.

* Direct Export Sales Through Outside Distribution Channels
Direct sales to the foreign market through middlemen such as distributors, sales agents, brokers, importers, jobbers, etc.

* Direct Export and Sales Through Local Company Sales Organization
- Create your own branch office and/or subsidiary
- Create a joint selling company
- Create your own sales force
- Set up regional and/or distribution centers or warehouses
- Hire services and rent facilities of public warehouses
- Use combination od company distribution centers and public warehouses
- Organize an international franchise system
- Team up with another manufacturer or several
- Combinations are endless in this approach and would be affected by the host country's regulations.

* Licensing
- License a patent and/or know-how for royalty payments and fees and/or equity
- Obtain licenses for foreign patent and/or know-how

* Assembling
- Entitle foreign manufacturers to assemble, or produce and assemble, with or without license, your equipment or products.
- Cross-license foreign manufacturers for the same type of operations, as described above, but with an option to assemble, or produce and assemble their equipment and products.
- Set up assembly operations in a free trade zone of free port.

* Manufacturing
- Contract out manufacture of products.
- Purchase an equity interest in an existing manufacturing or assembly operation.
- Set up manufacturing operations in a free trade zone of free port.

Joint Venture
- Organize a joint venture with a local partner.