By Karen Gerwitz, President & CEO, World Trade Center Denver
As we look back on last week’s Denver Startup Week, where we revel in the innovation of startups mainly in the technology sectors, it’s easy to lose sight of the Colorado manufacturers that are innovating and competing year over year on the global stage. In today’s difficulties of constantly changing trade policies, tariff barriers, and unfair trade practices, companies that can remain competitive on the global stage, must, by definition, be continuously innovating.
Here are some of the innovative ways Colorado manufacturers are expanding globally:
Product Modification – This strategy is what manufacturers do best. By engineering a new flavor, a new use, a new size, you can find new market needs or preferences that will help expand market share. Before investing into re-engineering a product though, companies that are most successful understand the product’s and company’s true value proposition and how that deep true value story translates into a new culture, language and preferences. One example is the success of green tea flavored Kit Kats in Japan.
Shared Distribution – You attend a trade show and see a complementary or competing product to yours. Instead of panicking or wondering how on earth you will compete, consider approaching the company to explore a shared distribution partnership. The world market has enough business for both companies, so why not pair up and distribute each others’ product in your respective markets? One way to vet your distributors at a trade show is to have interested distributors fill out an application. If they complete it on the spot and return it, they are pretty hungry for your business. Of course, further due diligence is smart prior to signing a contract. Example: Drones and UV cameras that complement.
Piggyback Partners – Along the same lines as shared distribution, find a company with complementary products or services and ride on their coattails into a new market, sharing container space, distribution channels, sales strategies, sales agents and more. Example: Roofing supplies with construction firms.
Merger or Acquisition – Of course we know that mergers and acquisitions are a common way companies continue to grow internationally and expand market share in other markets. Getting appropriate financial advice is one element, but be sure that corporate cultures will mix and values are similar, or this may be a very costly mistake. Example: Watch the Netflix Movie American Factories where a Chinese company acquired a GM plant – the cultural clashes were profound!
Government Procurement Opportunities – The World Bank, the various Development Banks, the U.S. Trade and Development Agency, USAID, the Overseas Private Investment Corporation, GSA and others offer public procurement opportunities in various countries. You can collaborate on an international team to update health and safety standards for a country, then supply product to support those new standards. Example: Geotech in Denver worked with Hach in Fort Collins to support the development of new Chinese standards for safe groundwater levels, opening up a new market for higher quality equipment to detect and treat contaminants.
Exporting Prior to Domestic Regulatory Approval – So you are waiting for another year for your FDA approvals to kick in for your medical device, so you can start selling your product. Why wait? Find a market that will welcome your product with less stringent regulations and launch your product there. This is perfectly legal and plausible. Seek legal support for your options.
Credit Insurance – Your sales team tells you that you could make your numbers this quarter if you could just sell to some new customers they uncovered in South America, even though they have never purchased your product before. You’ve been burned on sales to new customers that you didn’t know well, so you hesitate. Check out the possibility of guaranteeing up to 90% of your A/Rs by purchasing credit insurance through ExIm Bank or a private credit insurer like Euler Hermes or Coface. For more information on the benefits of this strategy, tune into the WTC Denver’s webinar on the topic hosted by ExIm Bank’s top-performing partner, PNC Bank.
There are hundreds of strategies that I can’t mention in one article, but I am eager to hear what is working for you and your company. The World Trade Center Denver is a trade association of peer companies that trade. We share best practices and strategies on a regular basis with each other, learning across industries and disciplines. Call our Help Desk at 1-833-ASK-WTCD (275-9823) to discuss new strategies to support your global business launch or growth.
The World Trade Center Denver is an active member of the global World Trade Centers Association in 330 cities in 100 countries. The mission is to support the remarkable industries in the Rocky Mountain Region to grow their businesses and thrive on the global stage. For 32 years, the World Trade Center Denver has trained over 35,000 companies in our great state on how to trade effectively. The new physical campus housing the growing ecosystem of global businesses in Colorado will be opening in RiNo in 2021. For an overview of events and services, check out the website at https://www.wtcdenver.org.