Exporting For Growth Your Guide To Getting Started (1)

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1. Trade: Exporting for growth Your export opportunity Our insightYour guide to getting started in exportingwww.ukti.gov.uk 2. UK Trade & Investment�UK Trade &…
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  • 1. Trade: Exporting for growth Your export opportunity Our insightYour guide to getting started in exportingwww.ukti.gov.uk
  • 2. UK Trade & Investment�UK Trade & Investment (UKTI) is the UKTI has helped many thousandsGovernment Department that helps of businesses achieve internationalUK-based companies succeed in success by providing tailoredglobal markets and assists overseas services with specialist supportfirms in bringing their high-quality covering a wide range of industries.investment to the UK. Its clients consistently cite the importance of UKTI support inUKTI has a global network of helping them to overcome barriers2,400 staff. Its International Trade to new overseas business andAdvisers (ITAs) around the UK have improve their business performance.years of business experience to drawon when advising companies. In 96markets based in British Embassiesand other Diplomatic offices aroundthe world, UKTI staff can offer local,in-market knowledge and expertise.
  • 3. Exporting for growth – Your guide to getting started 01Foreword Businesses which get involved in the international market become more dynamic, innovative and successful.Lord Green of HurstpierpointMinister of State for Tradeand InvestmentWelcome to UK Trade & Even through challenging economic A great place to start is by talkingInvestment’s (UKTI) guide to times, there are unparalleled to your local UKTI International opportunities for British firms around Trade Adviser, who has years ofgetting started in exporting. the world as the emerging high business experience and can give growth markets continue to grow. you one-to-one advice. UKTI’s staff In the UK, if we are to make progress around the world can provide you in reducing our trade deficit, we need with specialist local, in-market to encourage more SMEs to take the intelligence and guidance. plunge and export, and to encourage The guide also steers you to other those already doing so to spread sources of help – from logistics to their wings. We know that companies intellectual property, from cultural which begin to export experience issues to getting paid. significant gains in productivity and competitiveness. In essence, Britain’s future prosperity will be businesses which get involved in the built on its success in international international market become more markets. Exporting provides a major dynamic, innovative and successful. opportunity for growth in the UK economy – and it could be a major This guide outlines the points you opportunity for your company too. need to consider before venturing Increasing British exports is a into international business. And national challenge that we must it tells you where to go for help rise to collectively. and guidance.
  • 4. 02 Exporting for growth – Your guide to getting started It’s time to go global� Have you ever thought about doing business in overseas markets? If not, or you thought it too difficult, then you might want to think again.
  • 5. Exporting for growth – Your guide to getting started 03Exporting can help you survive and As hosts of the 2012 Olympic and If you become angrow. There are real opportunities to Paralympic Games in London, thetrade internationally; UK products, eyes of the world are firmly on the exporter, the evidenceservices and expertise continue UK. This provides a perfect platform shows that you areto be in demand across the world. for UK companies to showcase likely to improve yourThere are opportunities – both in their expertise and do businesstraditional, established markets in overseas markets. productivity by a thirdsuch as Europe and the US, and This guide aims to help you grow in your first year alone.the high-growth economies of - your business internationally. If you Mark Prisk, Minister of Statecountries such as China, India, for Business and Enterprise haven’t exported before, you willBrazil and Russia. probably have lots of questions. As this guide sets out, there is a lot of expert assistance available.
  • 6. 04 Exporting for growth – Your guide to getting started Why should I export?Why should you take the Exporting can also be a catalyst for A growing trendexport plunge? innovation. In many cases you will More and more UK companies are see new ideas and opportunities recognising the benefits of exporting.UK companies which export are overseas which will spur you toresponsible for 60 per cent of national develop new and modified products Research shows that a growingproductivity growth and more than to meet the needs of international number of UK firms have increased70 per cent of UK business research customers. This can help you to gain their export levels. A recent study2and development. This helps to and retain a competitive advantage found that the percentage of UKgive them a technical competitive in the UK as well. firms doing business overseas roseadvantage, leading to more sales from 26 per cent to 31 per cent overand opening new markets. Academic research1 confirms that a two-year period. exporting companies:Doing business overseas is a Exporting is not just for biggerdifferent experience for every – are more productive and businesses. A recent survey ofcompany and its benefits will vary innovative than non exporters; around 200 smaller exportersgreatly depending on the personal – are more resilient to an economic showed that three in every fourprofile of each firm. downturn; planned to export more in 2011.3 A separate study found that theAs well as opening access to – achieve stronger financial proportion of small UK firmsnew sources of revenue, trading performance; exporting increased by 10 per centinternationally will allow you to in both manufacturing and servicesspread risk across a wider range of – have a higher profile and more credibility; and over a six-year period.4customers, extend the market forspecific products and ensure that – are more likely to stay in business.you are aware of internationalcompetition.In some cases companies are ableto offer much more interesting rolesfor their staff, and to recruit betterpeople as a result.
  • 7. Exporting for growth – Your guide to getting started 05 Business benefits Exporting is a must to Exporting can allow companies to: survive in these difficult 1 Achieve levels of growth not possible domestically. 6 Increase the returns on investment in R&D. times. Despite the challenges, the 2 Increase the resilience of revenues and profits. 7 Improve financial performance. opportunities are simply staggering. A British-made 3 Spread business risk. 8 Improve product is a mark of quality, 4 productivity. Achieve economies of scale and has a higher value not possible domestically. 9 Boost their profile and overseas. Exporting can be 5 recognition internationally. Increase the commercial lifespan of products challenging but also exciting. and services. Mary Barnett, Director, ChokolitAn increasing number of youngUK companies are grabbing Case study —international opportunities from an New York Delhiearly stage. Almost one in five new Exports have helped west London Managing Director Nina Uppalfirms are currently active abroad – snack business New York Delhi says: “We are truly going global.and so have been doing business more than quadruple its turnover Because of the excellent advice,overseas since they started trading. since its launch in 2009. support and contacts provided by UKTI, New York Delhi has beenYou too can join this growing club With support from UK Trade & catapulted into the global market,and gain the export advantage. Investment (UKTI), its premium giving it the sort of exposure I had peanut brand, ViPnuts, is now only dreamt of. We have already being supplied to Canada, Eastern caught the eye of a couple of giant Europe, France, Germany, Spain food multinationals. and the US. UKTI has helped New York Delhi go on market visits to “I always knew we had an excellent meet potential distributors and product and brand, but it was exhibit at overseas trade shows. really about how we shouted about it, and UKTI helped us do this.” www.newyorkdelhi.com1 Harris, R. and Q. Cher Li (2007), Firm Level Empirical Study of the Contribution of Exporting to UK Productivity Growth and Hart et al Impact of Trade Services on R&D – Aston University August 20092 Study of the Relationship Between Innovation, Exporting and the Use of E-Commerce, Harris and Li, 2010.3 UKTI/IOD Doing Business Overseas survey, July/August 2010.4 Study of the Relationship Between Innovation, Exporting and the Use of E-Commerce, Harris and Li, 2010.
  • 8. 06 Exporting for growth – Your guide to getting startedWhere should I export to?
  • 9. Exporting for growth – Your guide to getting started 07 UKTI not only helped shape my export strategy, but really opened doors, putting me in contact with the right people in the right countries. Parminder Kalsi, Managing Director BBC Pharmaceutical ServicesThere is an abundance High-growth markets middle classes in China and India, forof opportunities for UK UK exporters are also increasingly example, are set to increase household expenditure fourfold over the nextexporters – and plenty embracing the myriad opportunities 20 years.5 The Chinese middle class isof support to help you offered by the world’s emerging economies – many of which are forecast to grow from 172 million totake advantage of them. experiencing rapid rates of growth. 314 million in the next five years – moreThe UK is a major trading nation, Such high-growth markets include than the entire population of the US.6able to capitalise on the single the ‘BRICs’ (Brazil, Russia, India and These rapid growth rates, combinedmarket through the European Union China), whose dynamic economies with progress in infrastructure,(EU), as well as being ‘socially close’ will provide a wealth of prospects communication networks and globalin terms of culture and language for UK firms in the coming decades. co-operation, are making doingto a number of major international business in high-growth markets In addition to the BRICs, there aremarkets – including the US. increasingly commonplace for UK other fast-growing markets with greatMany UK firms begin exporting by potential, such as the so-called CIVETS exporters. For example, since 2002,entering established markets such (Colombia, Indonesia, Vietnam, Egypt, the number of UK companiesas these. The EU, with its open Turkey and South Africa). These often exporting to China and India in theborders and shared import/export smaller markets have much to offer, construction and IT sectors hasprocedures, provides UK companies and UKTI International Trade Advisers increased by over 100 per cent.with unrestricted access to more (ITAs) are well placed to guide You don’t have to be an experiencedthan 500 million consumers, exporters on how to select the best exporter to enter a high-growthwhile the US continues to be our territory to target. market. Two in five of the smallestnumber-one export market, offering exporters (with fewer than 10 Growth in such markets is driven byopportunities across a wide range employees) already do business in rapidly rising populations and GDPof sectors. at least one high-growth market.7 levels. Research has shown that the5 BIS Economics Paper No.8, UK Trade Performance: Patterns in UK and Global Trade Growth, November 20106 HSBC, October 20107 NIESR Analysis of the International Business Strategies, Barriers and Awareness Monitoring Survey, March 2010, and OMB Research, PIMS Qualitative Follow-up Study of Business Needs in Emerging Markets, June 2006
  • 10. 08 Exporting for growth – Your guide to getting startedAid-funded businessAs well as working with specific Case study — Case study —geographic markets, there are Kat Maconie Skyline-IFE Ltdalso huge opportunities for UK Exports have been a key way for International business has reallycompanies in aid-funded business British footwear designer Kat taken off for Suffolk-based in-flight– that is, the contracts awarded by Maconie to build her business. entertainment company Skyline-IFE.multilateral agencies such as the Having received support from UK Since enrolling on UK Trade &UN and World Bank to support Trade & Investment, her label can Investment’s Passport to Exportprojects in the developing world. now be found in leading fashion programme and attending majorMuch of the implementation of stores across the world, including airline industry exhibitionsthese aid-funded projects is Brazil, Europe, Japan and the US. overseas, the small firm has woncontracted out to the private sector, “I knew I’d have to produce large clients in Norway and Swedenrepresenting significant business quantities of shoes early on and is bidding for work in theopportunities for consultants, to get a decent price point,” Middle East.works contractors and suppliers says Maconie. “I had to growof goods and services. Managing Director Richard Barsby the business quickly and my says: “It is relatively new for us toEvery year, multilateral agencies best chance of doing this was be selling in this way and Passportspend some US$60 billion on to look beyond the UK. to Export was one of the things thateverything from tents to “UKTI’s support has been crucial. gave us the confidence to go ahead.telecommunications. The UK The international trade adviser The service is tailor made for smallcurrently gains between 4 and 17 really understood what I was businesses like ours because itper cent of this aid-funded business, trying to achieve and had a very made us take a considered look atwith the most sought after expertise good insight into the nature of our strategies and plans.”being in the healthcare, construction, my business.consultancy, ICT, environmental and He adds: “We know that tradingtransport sectors. “The UKTI-organised seminars conditions are going to get very were really helpful, while the challenging in the coming year but, support I had in meeting the costs with the backing of UKTI, we believe of travelling to new markets was we are well placed to come through. invaluable – I would not have been We’re now very busy presenting new able to fund such visits on my own.” proposals to prospective clients.” www.katmaconie.com www.skyline-ife.com
  • 11. Exporting for growth – Your guide to getting started 09
  • 12. 10 Exporting for growth – Your guide to getting startedA world awaits�There are opportunities Brazil Ireland The value of UK goods exported Widely considered the ‘easiest’for UK exporters in all to Brazil grew by 24 per cent to overseas market for UK exporters,corners of the world. £2.2 billion in 2010. who sold goods worth £17 billionThey include: China there in 2010. China has become the UK’s ninth- Mexico largest goods export market and UK goods exports to Mexico British export activity there rose increased by £207 million in 2010. by 418 per cent from 2000-2010. 24 per cent of internationalised UK firms said that they are already doing France business here or are ‘very’ or ‘quite’ The UK’s fourth-biggest export likely to do so in the next two years. market. RussiaSource: All figures taken from 2010 UKTI India Around £3.6 billion of UK goodsInternational Business Strategies Barriers UK exports to India grew 45 per centand Awareness Survey and ONS Monthly Review were exported here in 2010.of External Trade Statistics, March 2011. between 2005 and 2010.
  • 13. Exporting for growth – Your guide to getting started 11 International trade is more important than ever and exploiting the opportunities of fast-growing markets in Asia and Latin America is vital to the UK’s economic future. The difficulties and risks of operating in these fast-changing markets are less than the risk of not participating in their growth. Miles Templeman, Director General, Institute of Directors Top 20 goods export markets for UK companies (2010) US Germany Netherlands France Ireland Belgium/Luxembourg Spain Italy China Sweden Switzerland Hong Kong Saudi Arabia and UAEPopular emerging markets Japanwith nearly a quarter of Canadainternationalised UK firmsalready doing business here. India South Africa UAEA popular emerging market, with Poland45 per cent of firms involved in orconsidering export activity either Russiathere already or with some likelihood Singaporeof entering in the next two years. Australia USThe UK’s number-one exportmarket, with around £38 billion of 0 10 20 30 40UK goods exported here in 2010. Value of goods (£ billion) Source: ONS 2011
  • 14. 12 Exporting for growth – Your guide to getting started Getting ready to export We saw our website as a critical tool to reach our customer base. Getting it right was crucial. The ECR consultant was inspirational: hugely experienced with a wealth of knowledge. Working with him provided us with invaluable insights and ideas. Andy Cox, Director Cox & Plant Ltd, West MidlandsIf you are serious about ITAs can draw on years of business Make an export plantrading internationally, experience and give you – at no cost After completing your market – a more detailed assessment andyou will want to think about practical advice on a one-to-one basis. research, you can draw up an exporthow to research, target plan defining how you will enter Carry out market research the new market. That should include:and grow a presence inoverseas markets. It is essential to carry out detailed – a marketing strategy which market research to identify and incorporates internationalBut how should you begin? How do evaluate the target market. Areas trade development;you even know whether exporting to examine include:is right for you? Before you commit – an understanding of the routeto exporting you need to honestly – the industry structure; to market, e.g. the preferredassess your export potential – both – the predicted demand for your distribution channel for yourin terms of the readiness of your product or service; products or services;business and of your product or – the competition and how you plan – the chosen business model e.g.service. The following steps should to fit into that marketplace; and agent, distributor, B2B, sales office,help you to do this. – any modifications required to make joint venture or subsidiary company;Assess your export capabilities your product or service saleable. – the necessary financial resources;Business Link’s online tool ‘Are you Desk research is a good startingready to export?’ provides a quick, point – an increasing amount of – the right people to develop the newbasic assessment of your export information is available online – export markets;capabilities and the issues and but you may also wish to consider – adequate knowledge of thepracticalities you need to know commissioning some bespoke requirements of your chosen marketabout before beginning to export. research from an export specialist. – e.g. modifying packaging to meetThe tool provides a useful starting local regulations and standards; andpoint for discussions with a UKTI UKTI’s Overseas Market IntroductionInternational Trade Adviser (see Service (OMIS) draws on the local – an understanding of export payment‘Who can help me export?’ and knowledge and expertise of its staff mechanisms and export finance.‘UKTI contacts’ later in this guide). around the world. The cost of this is very competitive.
  • 15. Exporting for growth – Your guide to getting started 13 Key questions to ask before you export 1 What are the unique selling points to your business proposition? Will there be 4 Do you have sufficient resources (management time, project finance and expenses) to fund 7 Have you evaluated business risks (such as protecting your intellectual property) and a market for your products your overseas projects? conducted research and due and services? diligence? 2 Are there any legal barriers to your business model? 5 Who will be leading the project within your company?
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