Manufacturing and/or Construction: Know your Profitability

June 9, 2016

 Advance planning your entrance into global markets

Manufacturers and distributors that conscientiously and assertively develop overseas markets typically have twice the growth rate of those that merely chase opportunities as they arise.

Many companies enter the global market or supply chain to fill a customer’s specific need. While this kind of happy accident can help you get your international feet wet, it comes with considerably more risk. It’s tough to fault a company for taking advantage of any growth opportunity that presents itself, but planning in advance is a far better strategy.

A deliberate, customized export growth plan can give your company three distinct benefits;

  1. More control over the terms

When taking a proactive approach to fulfilling the needs and wants of a customer, it is likely you will have more say in how you execute. Customers look for suppliers that provide ideas and answers, and they are often willing to pay a premium to receive it. Conversely, when you wait to be asked to participate, the customer tends to drive the relationship and calls the shots. Many will shop the opportunity among other manufacturers or distributors, turning your value-add product into a commodity.

  1. Reduced risk and uncertainty

Entering foreign markets without experience can increase the risk of loss or theft. Unfamiliarity with logistics and customs procedures can create delays that impact the entire supply chain (regardless of size). International transactions can be financially tricky, and if they aren’t managed properly, they can clog up your cash flow. Determine the markets you want to enter, chart the course in advance, and anticipate the constraints you’ll likely encounter, both logistically and financially.

  1. Enhanced capacity management and diversification

Many manufacturers struggle with concentrations and diversification. Entering different geographic markets can help offset the volatility of your local market and even out peaks and valleys. And a venture into another hemisphere can create different seasonality opportunities, spreading production into a year-round schedule.

Planned entry into the global marketplace mitigates risk and can help your company realize a diversification sales plan that drives greater volume and profitability – essential to building your business’s value and sustainability.

Don’t sit back and wait for a customer to escort you on to the international scene. Take charge of your own global destiny and enter it on your terms.

For more information, contact:

Mike Medlicott

T: +64 3 379 0829


Article written by:

Robert Bishop

Clifton Larson Allen (US)
T: +1 262 898 6576



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