American fashion, music and culture may be all the rage among young people in Shanghai, Mumbai and countless cities across the globe, but when it comes to population growth, we’re far from number one.
Today, 95 percent of the world’s population lives outside the U.S. borders, and by 2050 more than 50 percent of the world’s population will reside in developing countries in the Asia-Pacific region compared to only 4 percent in North America. These developing countries or emerging markets are becoming the drivers of global growth. Their economies are expected to grow two to three times faster than developed nations like the U.S.
Economists and think tanks like the Brookings Institution estimate that by 2015 the number of Asian middle-class consumers will equal those in North America and Europe—for the first time in 300 years. And by 2021, it’s predicted that there will be more than two billion middle-class households in Asia, compared to 150 million today. These developing countries will need to import products and services to support their rapid middle-class growth. These consumers will demand modern conveniences, reliable energy to power their communities, easy access to clean water, and updated roads and hospitals.
Even today, the purchasing power of these countries cannot be ignored. You don’t have to look far for examples. Nike reports more than 60 percent of its earnings coming from emerging markets, mostly in Asia. Coca-Cola reports that 70 percent of its revenues are generated from outside the U.S.
So the question is not, “When does my company begin exporting?”, but “How do I start?”
First, determine your export readiness.
To begin, think strategically, and act tactically. This means asking the tough questions. What is your current production capacity, and how much can you scale it? Is your business structured to meet a larger market need, and do you have leadership buy-in to allocate key company resources, such as management and personnel, production capacity, and funding? A solid plan will require identifying markets, proposing methods to achieve objectives, allocating required resources, and monitoring expected results, so you must prepare systemically.
Second, do your research.
Ask any successful exporting company and they will agree: reacting to leads that come to your company’s website or trying to conquer the world are not effective uses of your time or resources and typically do not yield consistent,
long-term export sales. You need to target two to three countries where your product has the best potential. Focus on these countries by detailing a market entry strategy for each country. Market research should include a macro view of the country and a micro view of your product’s potential, including market channels, competitor analysis, regulatory barriers, pricing considerations, and supply and distribution opportunities and challenges.
Third, take action.
Tap into the many resources available at both the federal and state levels, including export planning programs and financial assistance. Contact us at 855-INWIBIZ to start building your company’s export plan.
Wisconsin Exports by the Numbers
Wisconsin exported $23.1 billion worth of products in 2012, a $1 billion increase over 2011. The state’s highest category of exported products is industrial machinery, accounting for 32 percent of total exports, with electrical machinery and medical/scientific instruments rounding out the top three. The top markets for Wisconsin’s products are Canada, Mexico and China. Wisconsin exports to 210 countries, and more than one third of Wisconsin’s total manufacturing, mining and farm products are exported. Wisconsin ranks 18th in exporting volume compared to other states. Demonstrating that even small companies can benefit from adopting an export strategy, the Wisconsin Economic Development Corporation (WEDC) estimates that 88 percent of the 6,500 Wisconsin companies that export their products are small or mid-size firms with fewer than 500 employees. And these companies generate nearly 26 percent of Wisconsin’s total exports.
Note: WEDC partners with the Wisconsin Manufacturing Extension Partnership and the Northwest Wisconsin
Manufacturing Outreach Center to offer ExporTech™, a three-session training program that helps manufacturers
rapidly develop a workable, go-to market export strategy in 12 weeks. To learn more, go to: www.inwisconsin.com/
exportech.
