Exporting and Global Trade
The many ways of growing your business through exporting and global trade.
If you're looking to expand into international markets, you'll need to be prepared to deal with language, legal and cultural issues.
Support for global trade
The following organnisations can help you trade internationally:
- Department for International Trade (DIT) - helps businesses export and grow into global markets. Every month they publish hundreds of new export opportunities from around the world
- DIT's E-Exporting programme - helps UK retailers and brands export their products overseas via e-commerce
- Thames Valley Chamber of Commerce - offers businesses access to a suite of international trade services to help them trade globally
- UK Export Finance - find out about UK Export Finance products and services, and how export credit guarantees can help your business
- Open to Export - a service for SMEs looking for help and support in exporting from the UK
- Export Savvy - get access to the whole range of powerful help, advice and guidance to help secure your export success
This involves a contractual agreement between you and a foreign company, which manufactures, distributes and/or sells your product or service. It offers the following advantages:
- Fast entry into the market
- No need for capital investment to establish manufacturing operations abroad
- Quick returns in comparison with other methods
On the downside, preparing the licensing agreement can be time consuming and costly. You'll also need to give up control over the manufacturing and marketing of your goods. And if your partner ends up becoming your competitor, they'll be armed with an in-depth knowledge of your business.
This is a contractual arrangement with a particular business partner. There are two basic types:
- An equity partnership, where the partners are equal
- A non-equity partnership, where the host country partner contributes a greater percentage of equity in the joint venture
A joint venture is the only legal way for a foreign company to set up operations in some countries. The other advantages of joint ventures can include:
- More control over your foreign operations
- Extensive local knowledge, thanks to your host country partner
- Being able to take advantage of your partner's business and political contacts
Be aware that joint ventures require more investment than licensing as you'll need to commit resources to areas such as training, management and the transfer of technology. Cultural and language differences can also cause problems between you and your host country partner.
Setting up an international base
If you're committed to setting up production facilities offshore, you'll need to either set up your own or sub-contract your manufacturing to an assembly operator. Either way, this approach requires significantly more investment and carries more risk than joint ventures or licensing, but it can offer you:
- More control over your international operations
- Lower transport costs
- Exemptions from the tariffs or duties that you'd have to pay if you imported your goods
- Lower production costs
- Foreign government investment incentives, such as tax holidays