What do you think is the most important element of international trade?
No doubt, based on your own experiences and area of specialty, you’ll have strong feelings on the subject.
But if you sit and think about it for a minute or two, is there one aspect that you would elevate above all others, or it is too hard to choose?
There are strong arguments for many aspects of importing and exporting, with each presenting many valid points. However, even when you set them all side by side, it seems almost impossible to narrow down the list.
So far, over the course of our International Trade Competency Standards (ICS) Project, we’ve had many international trade experts share their wisdom and knowledge on their particular area of specialization.
Through discussion and debate, document reviews, surveys and webinars, they’ve had opportunities to talk about what they think is important in international trade, and why.
As a result, we’ve been able to gain significant insights into this question, and see what international trade professionals like you think is most important in their work.
While we can’t name all of them, here are seven areas that generated particularly high amounts of interest, discussion and debate. Will your top choice be on the list?
1. Conducting a meticulous situational analysis before you go global
Initiating business in another country is not something to be done lightly. It requires a lot of preparation, research and strategic re-orientation.
Deborah Youden, an Export Consultant with the Newfoundland and Labrador Organization of Women Entrepreneurs, stated,
“We want to ensure that companies who look at international markets are ready to do so, or understand and identify what needs to be done and how they can do it before they launch globally.”
It’s significant because until you examine all aspects of a business and are aware of investments needed from the company, you could be putting the company in jeopardy.
Finding the right pairing of business and market involves taking a look at both halves of the equation. If your business isn’t prepared for expansion, entering a new market could overstretch resources, cause major supply chain disruptions or leave employees overworked, among other issues.
On the other hand, businesses need to know whether there is a demand for their products or services in a new market, and whether they are legally able to do business there without overcoming significant obstacles.
2. Impeccable analysis and mitigation of all types of trade risks
There’s always a lot of risk in any element of international trade. If you don’t know what they are ahead of time, and plan for them, your business could be in big trouble.
That being said, risk shouldn’t stop you from doing business internationally. When properly managed, it is simply one aspect of many incredible opportunities.
The key is to identify those risks, create backups and margins of risk, and keep both the best and worst case scenarios in mind as you broaden your international horizons.
3. Managing financing and payment for trade transactions with confidence
While the payment methods and processes of international trade are very important, there are a lot of steps that companies need to take before it occurs.
Getting financing and credit before the transaction takes place is a crucial component of any deal, as most companies do not have the liquid assets to pay to purchase international products or services out of pocket.
Having a firm sense of the skills needed to acquire that financing, secure insurance on trade deals, and negotiate the details of payment will eliminate confusion, and streamline the process.
Once companies are on the same page as to how the entire financial process occurs, negotiating the best deal can then take centre stage for your company and its business interests.
4. Master research and planning to effectively manufacture goods for export
It’s one thing to produce a product for export; producing one that meets customer demands, operates exactly as expected and is packaged to meet specifications is quite another.
Before the manufacturing process starts, companies must conduct market research to make sure that the proposed product meets market expectations and consumer demands.
Once the product comes off of the assembly line, it also needs to be tested for quality and safety assurance, and then packaged and labelled in such a way that all of its features and uses will be clear to consumers.
With such a diverse skill-set required, it’s no wonder that manufacturing has become one of the most dynamic and in-demand career paths in international trade.
5. Handling the many variables involved in the international transportation of goods
In transport, the number of variables a company has to manage are simply staggering. As Audrey Ross, Logistics and Customs Specialist for Orchard International Inc. lists:
Costs are dependent on location of pick up, port of departure, port of destination, destination of final delivery, INCOterm contract, mode of transport, type and size of product, customs cleared or in bond for customs deferral, and remote or popular location or destination.
“Timing is also dependent on location, destination, mode of transport, type and size of product, etc.”
While it can be difficult to standardize the differences in transporting all kinds of goods, Audrey says companies can agree on the variables involved, the differences between domestic and international transportation strategies, and the types of hiring and training needed for the staff involved, among other topics.
6. Implementing effective international sales and marketing plans
As Melanie Abdel-Malak, Director, Foreign Market Development for Quebec International reminds us, “You can have a great plan, know all the customs rules and comply with all regulations, but if at the end you don’t sell anything, your project is a fail!”
She also, however, identifies that the sales process poses significant challenges to SMEs newly entering international trade because of the many skills and processes needed to ensure success.
“There is an array of aspects that one must take into considerations before getting into international sales. The main problem is that, especially for SMEs, the concentration will be more in developing the sales network rather than planning, analyzing and getting feedback.”
At the end of the day, you do not only need sales but also profits, which means there is more to sales then just selling.
With this in mind, she added that standardizing the skills needed for sales allows even experienced professionals to assess their own abilities, and gain training to fill in any competencies they may need to address.
7. Recruiting the best talent for the job
Time and time again, we hear that having the right people in the right roles can make all the difference in global trade. But how can you make sure you get the right people in place, and manage your staff across international borders?
It starts with establishing HR, recruitment and training strategies. From there, companies need to decide on key issues like compensations, benefits and performance reviews, as well as developing guidelines to send domestic employees overseas and bring them back afterwards.
Though HR professionals in global trade companies might have differing opinions as to what the best way to do each of these would be, it’s important to make sure each step is covered in the way that works best for your company’s needs.
We’ve made some major progress in the ICS Project, so we’re excited to let you know we’ll have more news soon. Stay tuned in the coming weeks for articles, white papers and other announcements!
Did any entries on this list surprise you? Is there one you would add on, or want to take off?