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“Even in these tough times for exporters there are some outstanding success stories that can inspire the export industry.” - Lisa McAuley, Australian Institute of Export
The success and sustainable growth of an export business depends on its ability to face challenges head on and seek new opportunities. Right now companies are battling a high dollar, continued fallout from the Global Financial Crisis and increasing international competition.
“Business as usual” will not be enough to ensure success. Now more than ever there is a need to be more innovative, and look at new ways to keep up with the international market. Last night at a reception attended by the Hon. Barry O’Farrell, Premier of New South Wales the 2011 Premier’s NSW Export Awards recognised the State’s top export companies big and small and there were some outstanding winners.
“The 2011 winners of the Premier’s NSW Export Awards are role models for other businesses in our State. The innovation, persistence, and focus they have exhibited in taking on the world and winning, in a period where the AUD is high and economic recovery is very fragile in many markets, is testament to their tenacity. This year’s winners represent the wonderful cross section of industry sectors in NSW that can compete on the world stage. They are wonderful ambassadors for our State and we wish them well as they continue their export journey”. - Peter Mace, General Manager, Australian Institute of Export
The winners of the 12 national categories will now go on to compete at the national level in the 49th Australian Export Awards on the 8 December in Brisbane.
The 2011 Premier’s NSW Export Award winners are:
MEDIA CONTACT
Lisa McAuley
Australian Institute of Export Tel: 02 8243 7400 Mobile: 0430 172458 E-mail: lisamcauley@aiex.com.au
Australian Institute of Export - Tuesday, October 18, 2011
The NSW Government’s efforts to restore economic growth and establish NSW as the first place in Australia to do business have been strengthened with Deputy Premier and Minister for Trade and Investment Andrew Stoner today announcing the members of the new Export and Investment Advisory Board.
“I am very pleased that such a high calibre group of NSW business leaders has agreed to work with the NSW Government and share their expertise to help boost economic activity in this State,” Mr Stoner said.
“Warwick Smith, who is Chairman of ANZ Bank NSW and ACT and an eminent businessperson, has accepted the position of chair of the board.
“The Export and Investment Advisory Board will provide the Government with high-level strategic and expert advice across a broad range of economic development matters, including structural issues, attraction of productive foreign investment and regional headquarters.
“The board will also monitor the performance of the State across key economic indicators, with particular attention to international competitiveness.
“The establishment of this board was an election commitment of the NSW Government, reinforcing our commitment to rebuilding the economy.
“Stronger international trade and investment relationships are essential in achieving this.
“The board and the recently created Multicultural Business Advisory Panel are squarely aimed at stimulating economic activity across NSW.
“The panel will harness our State’s cultural diversity, language skills and overseas links as part of our pitch for new business and its Chair Nihal Gupta will report to the Export and Investment Advisory Board.
“These two new bodies will help to position NSW as a high-growth, internationalised and competitive economy.”
Members of the Export and Investment Advisory Board:
Chair: The Hon. Warwick Smith AM - Chairman ANZ Bank NSW & ACT, Chairman Advisory Board - Australian Capital Equity, Chairman of Australian Sports Commission and Chairman of the Australia China Council.
Kenneth Allen – Senior Advisor, Lexington Partners and Founder & Chairman Emeritus, Advance
Michael Carapiet – Chairman of the SAS Trustees Corporation Board
John Hartigan – Chairman and Chief Executive Officer of News Limited
Katie Lahey – Managing Director (Australasia) of Korn/Ferry International
John Mullen – Chief Executive Officer and Managing Director of Asciano Limited
Peter O’Byrne – Independent Director and former Chief Executive, Australian Trade Commission
Mr Steve Vamos – Founding President of the Society for Knowledge Economics and non-executive director of Telstra
Mark Paterson – Director General of NSW Trade & Investment
The inaugural meeting of the board is planned for next month.
Australian Institute of Export - Thursday, October 13, 2011
Australia will have the fourth largest increase in trade growth in Asia over the next 15 years according to HSBC Trade Connections, the new quarterly global trade forecast tool launched by HSBC.
HSBC Trade Connections forecasts that Australian trade will increase by 129% by 2025, nearly double the pace of world growth (73%) and exceeding Asia (96%) over this same period. Australia will be the world’s second fastest growing export market (equal to China) and the seventh fastest growing importer (equal to the Czech Republic).
HSBC Trade Connections predicts how trade is going to develop over the next 5, 10 and 15 years. Spanning 37 countries, it covers the top 10 sectors in each for both export and import goods. It forecasts overall trade growth (exports, imports and total trade) globally, regionally, and in-country. The forecast has a unique approach to understanding the drivers of trade from a business perspective informed by: trade trends, macroeconomic and market influences on trade (for example GDP, oil prices, inflation, foreign direct investment), and business environment influences on trade (including regulation, demographics, access to capital and finance).
The report found that Australia’s strongest trade growth between now and 2025 will be in the next five years when it will hit 7.7% annually (8.9% in 2012 and 2013), almost four times world growth (2% in those years). The doubling of Australia’s trade will bring merchandise trade volumes to US$702.5 billion from US$347 billion today.
Commenting on Australia’s immediate trade horizon, James Hogan, Head of Commercial Banking for HSBC Bank Australia said, “HSBC Trade Connections forecasts a strong trade pipeline for Australia with a particular sweet spot in the next two years. This trade growth is consistent with HSBC’s own Australian experience where, despite AUD/USD appreciation, our trade export turnover saw strong double digit growth year-on-year to June 2011. It sends an encouraging message to Australian companies to seize the opportunities now to establish overseas trade relationships for short-term and future growth.”
Australian trade flows steady in immediate future
Within the HSBC Trade Connections report, the HSBC Trade Confidence Index shows a dip in the short-term confidence amongst Australian traders who expect global economic headwinds to impact global trade over the next six months. However, the sentiment amongst traders is that Australia will be relatively protected with the index revealing that 85% of Australian traders predict that their trade volume will either be maintained or will increase over the next six months, citing Asia as their most promising market for trade growth.
Australian traders falling behind in Chinese reminbi
The forecast predicts that China’s share of world trade will reach 13% by 2025, overtaking the US as the top exporting nation, driven both by commodities trading and by an increase in manufacturing in China. According to HSBC Trade Connections, China will remain Australia’s largest trade partner with total trade between the two countries estimated to reach US$148 billion by 2025 – more than double that projected for Japan.
The report further notes that, despite the fact 48% of Chinese companies surveyed are likely to use the reminbi (RMB) currency for settlement in the next six months, only 7% of Australian traders plan to settle in RMB, falling behind other markets like Hong Kong, Malaysia and Vietnam in their expected use of RMB for trade.
New HSBC forecast tool predicts continued trade boom for Australia to 2025/2
Hogan continued, “China is by far our largest trading partner. As the use of RMB becomes more commonplace, Australian companies that do not have the capability to transact in RMB may be disadvantaged if Chinese traders prioritise RMB-ready businesses.”
Australian Institute of Export - Thursday, October 13, 2011
New quarterly forecast exploring the future of world trade and the opportunities for international businesses
• World trade will grow by 73% in next 15 years
• World trade will grow at 2% until 2015
• Companies to increase trade activity annually by 4.1% to achieve projected growth
• Australia’s trade to grow by 129% by 2025
Global Trade Review
The new Trade Forecast is predicting that world trade will grow by 73% in the next 15 years, with merchandise trade volumes in 2025 hitting US$43.6trillion compared to today’s $27.2trillion. To achieve this growth, the Trade Forecast is predicting that companies across the world will increase their trade activity by a combined 3.9% between 2011 and 2025. The Trade Forecast anticipates that the spotlight will be on Egypt, India, China, Indonesia and Brazil to drive world trade growth during this period.
This is reflected in HSBC’s Trade Confidence Index which reveals that businesses around the world believe that China will continue to be a source of key trading opportunities over the next six months, with Latin America, South East Asia, and the Middle East also featuring strongly. Despite an overall dip in global trade confidence, businesses in Indonesia, Saudi Arabia, Egypt and the UAE are particularly optimistic about the future, showing a positive uplift in confidence on the first half of 2011. On a global scale, the majority of respondents (84%) anticipate either an increase in international trade, or consistent levels of international business activity, over the next six months. For businesses trading internationally or starting to trade internationally, the combined global outlook provides a positive view of future business opportunities with new trade corridors opening.
Australian Institute of Export - Thursday, October 06, 2011
US Distribution Debunked
For any of you that have read my previous blogs you will be sick of me banging on about the importance of segmenting the US market, both by geography and industry! But the most common mistake people make is thinking of the States as one market – It is in fact made up of many markets (all significant in their own right) and companies not only need to carefully consider segmentation, but also what distribution model they will set up to achieve successful market entry. In this month’s Business Success in the US blog I look at some of the mechanics of setting up successful US distribution.
What are the common types of distributorships in the US?
Standard Distributorship – Buys and resells
Agency relationship/Manufacturer’s Representative – Generates sales but does not buy and resell
Is it important to enter into written agreements?
YES – The US is a common law jurisdiction and parties should therefore include all important terms and clauses in their contracts. In general, courts will only enforce what is in the written agreement signed by both parties.
Exclusive or non-exclusive?
This will be highly dependent on the nature of the product or service offering, the market share the potential partner offers and the competitive environment. In general, it is not advisable to offer exclusivity, particularly not across all geographies and segments – Remember that an exclusive means that you are completely reliant on your new partner for all sales in that territory! Consider the pros and cons of each before rushing in.
What performance requirements should I set?
Any agreement entered into should set out the minimum performance standards required of the distributor. In the case of exclusives, this is often an enforceable part of the contract. These may include (in no particular order):
Value of initial order
Minimum purchase requirements (generally set by mutual agreement taking into consideration market dynamics and stage of product development)
Marketing budget
Minimum inventory levels
It goes without saying that all distribution agreements should be a two-way street and should outline your commitments to the distributor as well. For some reason, many Australian companies think that appointing a distributor is the end point and do not provide adequate in-market support to help to drive sales. Remember that you are dealing with the most competitive market in the world and your product runs a real risk of being lost amongst the other 1000 SKUs your new partner has if you don’t push hard!
Is it advisable to use a law firm?
With over 500,000 lawyers in the US it is not hard to see why it is one of the most litigious countries in the world. Seeking legal advice is just part of doing business in the US and seeking advice on distribution agreements is top of the list. A good lawyer will be able to assist with indemnification, limitations of liability, IP (trademarks, copyrights and patents) and termination of contracts just to name a few.
"Make no little plans. They have no magic to stir men’s blood and probably will not themselves be realized.”Daniel Burnham
Author: Ian Smith, Chief Executive Officer, Access USA Pty Ltd
Australian Institute of Export - Thursday, October 06, 2011
By Maxence Lefebvre
Preamble: this article points out the influence of intercultural factors on the negotiation process in an international environment. This article is mostly based on the work of Brian J Hurn, teaching postgraduate students International Communication and Cultural Awareness at the Universities of Westminster and Surrey, UK.
Negotiating is simply the process you follow to get somebody else to do what you want him to do. A successful negotiation has to follow a certain process with seven main stages: pre-negotiation, entry, establishing relationships, review of strategies, bargaining, agreement and post-agreement.
This negotiation process will pretty much keep the same structure in both domestic and overseas environments, however many new factors will need to be taken into consideration when negotiating across borders, such as the difference of language, cultural sensitivities, legal systems, tax regimes, labor laws and business practices. Moreover government-led bureaucracy, restrictive regulations and direct government interferences could further complicate the negotiating environment, as well as the need to analyze political and economic instability, currency fluctuations and ideological differences before starting any overseas negotiation. At the end of the day, even if the stages of the negotiation process remain the same in theory, international business negotiations are crucially different from domestic negotiations and the negotiator that engages in this should be aware of those differences and appropriately trained to ensure a successful negotiation.
This article will give you some general recommendations, tips and facts that you may want to know before dealing with foreign businesses to expand your own company.
Communicate effectively with your international negotiator
With the globalization and the multiplication of business transactions across borders, English became the main international language used in negotiating across cultures. This is more precisely, what is described as “international English” or “off-shore English” that became the official business language: a form of “low-risk English” using words, phrases and grammatical structures which can be easily understood, avoiding idioms, slang, jargon and complex structures. When starting contact with a foreign negotiator who may not be a native speaker, make sure you adapt your speaking and writing style to your counterparty to avoid misunderstandings.
If your negotiator cannot speak English, the use of an interpreter becomes essential. Before starting any direct conversation with the counterparty, the interpreter should always be briefed and provided with any notes you may have on the proposals you intend to make. During the negotiation discussion, you should express your main points in several different ways so that the meaning is clear and helpful for the interpreter. Moreover you should always look at the negotiator while corresponding, not the interpreter, since it could be perceived as a lack of respect in some cultures.
Adapt your approach to your negotiator’s culture
The “getting to know you” phase could be crucial in determining the success of a negotiation. The “shared experience” are a form of cultural shorthand and are extremely helpful in preliminary and informal discussions, as “ice-breakers”, covering interests, sport, art etc. In some cultures, building relationship and mutual trust are initially more important than proceeding to detailed negotiations. If your company is dealing with organizations from India, Middle East or Africa, showing interest and respect towards your counterpart’s family could be vital for successful relationship, since the family unit is highly valued in those regions. Such questions about building a family could be judged as private and not appropriate to the situation in some other cultures (e.g. France, Germany). In any case, those “small talks” should avoid contentious subjects such as political, cultural or religious sensitivities, when not sure whether they are appropriate or not.
The use of humor could also be used as an “ice-breaker”. Humor was described as “the shortest distance between two people” by the comedian Victor Borge. However, in an international context, humor could be something of a double-edged sword, as it does not always translate well across cultures and could cause embarrassment, offence or confusion through misunderstanding. While humor is often used in British business presentations, Germans would judge it as a lack of seriousness.
Developing good listening skills is really important to succeed in international negotiations, because it enables you to pick up the various subtle cultural nuances. Silence is often used by the Japanese to mull over what has been said and think of the alternatives, but it could be mistaken by Westerners as showing a lack of understanding. Do not feel uncomfortable and jump in, or worse, make concessions, if you encounter this situation.
The concept of “face”, defined as the regard in which one is held by others, is of a vital importance in the Chinese, Thai and Japanese cultures. This could explain why Chinese business people use indirectness and prefer intermediaries for negotiations, in order to save and give “face” because of the importance they attach to the establishment and maintenance of long-term relationships. Keep in mind that Westerners separate business life from personal life, but this distinction is less significant for eastern cultures.
Adopt the right negotiation practices
The business etiquette differs greatly across cultures, especially the exchange of business cards. In the Japanese culture, the ‘meishi’ is treated with great respect because Japanese consider the business card as the manifestation of the person’s persona. They will give you their business cards directly after the initial formal introduction: make sure you analyze the cards before carefully placing them in the front pocket of your wallet or on your desk in front of you. Concerning your own card, the best would be to print one side in your own language and the other in the other culture’s language. When making business in Hong Kong you will meet many Westerners with business cards on which they even have their names translated into Chinese characters. Another aspect of business etiquette which differs across cultures is the level of familiarity in the approach. In Germany, The Netherlands and Italy, people address each other by their academic titles, calling Doctors people with doctorates, as opposed as the more familiar approach used by Americans and increasingly by the British. Greetings can also be more formal for some cultures, including Germany and Russia. When dealing with women from other cultures, always wait for them to initiate the handshake.
Socializing plays an important role in successfully negotiating across borders. Due regard to seniority is essential with strict attention to seating at formal dinners, order of speeches, and giving and receiving gifts. On this last aspect, you should know that exchanging gifts for business purposes is very important in some cultures, sometimes it could even be an offense not to offer gifts, but it may be viewed as bribes in Australia and other western cultures. Try to offer gifts that symbolize the status of your company and the importance of an impending deal, such as an item characteristic of your local area, or one that displays your company logo.
The negotiating environment should also be considered carefully to maximize your chance to make a successful business deal. Some cultures, such as Latin America, Japan and particularly France, business people tend to see negotiations as ‘social ceremonies’ as opposed to the British, Americans and Scandinavians who put less emphasize on the social aspects. When dealing with French negotiators, make sure you invite them to a restaurant during a lunch break, rather than offering them sandwiches in the Board Room.
Understand your counterpart’s negotiation process
In an international context, your negotiator will probably not use the same negotiation steps and methodology than the ones you are used to dealing with in the domestic market. Agreeing on an agenda is probably the best way to clarify the stages of the negotiations and determine what has been agreed on at a certain stage of the negotiation process. This agenda takes even more importance when dealing with a foreign organizations, and you should try to follow it as much as possible, since surprises and hidden items could affect long-term trust in some cultures.
The pace of negotiations will differ a lot from culture to culture. In India and the Middle East, the progress will be initially slow until the negotiator succeeds at establishing trust. In contrast, indirectness is disliked in the USA, with an emphasis made on “getting the point”. The French, tend to view negotiations more as an intellectual exercise in logic, defending or disproving hypothesis. Arabs look upon deadline as merely general guidelines and see the possibility of amending these in the light of circumstances. The German, British and Japanese like deadlines and the agenda to be specifically stated and agreed upon in the contract and would expect negotiators to honor these.
Another aspect that is influenced by culture is the attitude to time. The existence of different attitudes to time could cause concern. There are two types of culture concerning time: the monochronic and the polychronic cultures. Negotiators from North America, Germany, Scandinavia, and Japan, are part of monochronic cultures, so they will like strict time-keeping, punctuality and keeping schedules. On the other hand, negotiators from Latin America, Southern Europe, Africa and Arabic countries, are part of a polychronic cultures: they may arrive late, deal with several issues and activities at the same time, and engage in multiple conversations. This behavior could cause frustration, be perceived as irritating and unhelpful for people from monochronic cultures. If you find yourself uncomfortable dealing with people with such behavior, you will then need a high level of patience if you want to ensure the success of your business deal.
Do you think your efforts made during the whole negotiation will be rewarded? First you should be aware of your counterpart’s ability to make decision by himself. Indeed, decision making in negotiations is often influenced by cultural characteristics and so the amount of authority given to the negotiator will differ from culture to culture. In Latin America and Greece, decisions will be made by the negotiating team leader. In Anglo cultures, negotiators often have high power and can make decisions by themselves concerning their business deals. In contrast, Japanese negotiators do not have much decision power. They have to report back to higher authority. This explains why Japanese will adopt a step-by-step approach to decision making with emphasize on what is agreed. This aspect of the Japanese culture causes frustration for western companies that are used to face-to-face negotiations with those who are empowered to make final decisions.
In practice, many negotiations often conclude in some form of compromise, either through mutual agreement or by some form of external mediation. Here are some examples of things that will maximize your chances to successfully negotiate: study and review the cultural sensitivities and characteristics; use skilled and experienced translators if necessary; adapt your negotiating style and pace accordingly; spend time building trust by establishing personal relationships at an early stage; always show patience; and be prepared for negotiations to continue after an apparent agreement.
Maxence Lefebvre, Australian Institute of Export
Brian J Hurn (2007), The Influence of Culture on International Business Negotiations, Industrial and Commercial Training Vol. 39 No. 7.
Cohen, R. (1999), Negotiating across Cultures: International Communication in the Independent World, US Institute of Peace Press, Washington, DC.
Guy, V. and Mattock, J. (1991), The New International Manager – An Action Guide to Cross –cultural Business, Kogan Page, London.
Congratulations to the 2011 Premier's NSW Export Awards finalists
Good exporting is all about developing a profit from your export sales and good profitability flows from having a sound sustainable export business. The 2011 finalists in the Premier’s NSW Export Awards have been judged accordingly and with a sound marketing strategy, innovation and good business practices, the finalists have taken on the world and won. Many have faced strong competition, a difficult business environment and a rising dollar and have successfully emerged as a finalist in the NSW Export Awards. The Australian Institute of Export and principle awards partner, NSW Trade & Investment congratulates all the finalists and wishes them well at the awards celebration on 20th October at Le Montage in Lilyfield.
Australian Institute of Export - Thursday, September 29, 2011
The British love the Australian beauty and skincare brand, Sasy n Savy. In January this year, Sasy n Savy launched into Harrods and in September they have launched on British Airways flights.
The strategic partnership with British Airways, will see the Sasy n Savy Hessian bag with three hand creams carried on board on all short haul routes.
Founder and Managing Director, Samea Maakrun said, “We are thrilled to be featured in such high end distributors as Harrods and now British Airways. “I am pleased to be able to be an ambassador for Australia and promote our natural products to the world.We are incredibly lucky to have such quality ingredients available here such as Kakadu Plum which is the richest fruit in the world in Vitamin C. It is also filled with antioxidants to prevent damage to the skin and assist with production of elastin and collagen.
Sasy n Savy's unique products featuring Kakadu plum, bearberry leaf, rosella flower and lily leaf are a huge hit overseas. Maakrun is now exporting her brand to 18 countries including Asia, the Middle East, US, Europe and the Pacific. She has also set upmarketing offices in Hong Kong and now the UK and is working six months per year overseas.
Sasy n Savy's collection is now available in the UK at Harrods, Fenwicks, Beehive and select independents.
The range can be found on www.highlifeshop.comand offers nationwide delivery of the complete Sasy n Savy range, including skin and body care, and shower & hair essentials.
Sasy n Savy hand care creams are available in Australia from $ 15.
Australian Institute of Export - Thursday, September 29, 2011
Sasy n Savy Australian skincare and well being products will now be available in Harvey Nichols Dubai from August 16, 2011. This major event marks a further landmark in Sasy n Savy's growth in the past few months with their launch into the UK market.
Harvey Nichols, Dubai, is the largest Harvey Nichols store outside the UK, and represents a luxury landmark in a city where luxury has become a byword. The store, within the Mall of the Emirates, contains the best world brands in fashion, food, beauty and home.
Founder, CEO and visionary, Ms Samea Maakrun MBA BBus (Acc) said, "Offering our range to one of the best department stores in the world is a natural fit for a successful international product which truly represents Australia."
She said, "It has been an eventful year with exponential growth achieved from our export to new markets and new listings in existing markets. I am pleased to be able to be an ambassador for Australia and promote our natural products to the world. We are incredibly lucky to have such quality ingredients available here such as Kakadu Plum, which is the richest fruit in the world in Vitamin C. It is also filled with antioxidants to prevent damage to the skin and assist with production of elastin and collagen."
Sasy n Savy ticks all the boxes when it comes to natural product, offering a beautifully presented range which is made without animal testing or animal ingredients. All Sasy n Savy products are free from parabens, petrochemical cleansers, synthetic colours and fragrances, pesticide and herbicide residues, mineral oils, sulfates, DEA or TEA, ethoxylates, propylene glycol, silicones, phthalates, and artificial colours.
The unique Australian ingredients provide natural vitamins, antioxidants and nutrients which are essential for skin cell growth.
Samea Maakrun is passionate about enhancing individuals wellbeing and improving their quality of life whilst considering the environmental footprint.
Sasy n Savy is available in 18 countries worldwide through exclusive channels, such as luxury retail, top rated hotels, Spas and specialist independent stores.
For further information, interviews, product or photographs please contact Nicole Lenoir- Jourdan or Tanya McGarry at Madison Avenue Media on 02 9449 3088 or 0404095326 or nicole@madisonavenuemedia.com.au
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