Foreign Market Calling? Consider these Tips Before Making the Move!

Global trade has no dearth of opportunities for your business, provided you prepare yourself adequately to enter foreign markets. 

The success of the companies like Sony, Samsung, LG, Reebok and Volkswagen – that have their roots in Europe and Asia -- in different countries across the world has also encouraged many enterprises to walk on their path. 

Even the small businesses can make their way to the global market through different routes. They can, for example, market their products via local distributors, sell to customers based in export territories directly, enter into joint ventures with local business enterprises, or offer products through a website. 

Though opportunities are there, success is not guaranteed. At the end of the day what matters the most is how your strategies worked in an unfamiliar market. 

Here are some tips that can help you prepare for your big stride into new markets.

Understand the Culture

Before you design your strategies to promote your products and services in a foreign market, update yourself with customs and business etiquette of the market you are planning to venture into. It can even include -- the history of that country, salutations used to greet someone, and the lunch hours or the prayer timings (in case of Middle-Eastern, African, Asian and countries). 

Stay Updated With the Foreign Trade Policies and Other Economical Details

Study in detail about the foreign trade policies of that country and figure out how it would facilitate your business. It is crucial to keep yourself informed about how the country’s currency has fared, its value fluctuations, and import/export timelines as it is always advisable to avoid speculation and work on locked in currency rates and delivery dates.

You should also stay updated with the business-wise foreign direct investment limits of different countries. It will help you choose the right country – the one that favors your business model and potential for profit. 

Join a CEO peer group when you plan to expand your business across the global borders. The CEO group – a rendezvous of industry leaders – offers corporate executive coaching that increases your chances of making profit as you get guidance from somebody who has achieved this feat with success. 

We will be discussing some more points on the same topic in our next blog. So watch this space!

Basic Elements of a Joint Venture

In our last blog, we talked about the preparatory steps needed to enter into a joint venture. In this blog we will be discussing the basic elements of a Joint Venture, which one should be aware of while binding into a contractual agreement.

The Ways You Can Enter Into A Joint Venture

A joint venture can be structured in four major ways – when a foreign investor buys an interest in a local company; when a local firm acquires an interest in foreign firm; when both local and foreign companies forms a joint enterprise; and together with public capital and/or bank debt.  

Choosing Right Partner Is Very Important

The success of a joint venture depends on both the partners, which makes it important to choose your partner carefully. For this, you need to do a screening of all the prospective partners. Make sure you have checked the credentials of your partner before signing the agreement. The marketing and distribution network, R&D, technical knowhow, infrastructure and reach of the company should also be considered before signing the joint venture agreement.

Maintain Contractual Integrity 

Every joint venture partner has a fiduciary responsibility – a duty to act for someone else's benefit while subordinating one's personal interests to those of the other person – and has the duty to act in Good Faith in matters that concern the common interest or the enterprise.

A joint venture can terminate at a time specified in the contract – upon the accomplishment of its purpose, upon the death of an active member, or if a court decides that serious disagreements between the members make its continuation impractical (Source: TheFreeDictionary).

All the participating parties in a joint venture share some mutual responsibilities and goals, and have a set of certain rights and duties. The parties have a mutual right to share the profits and control the enterprise, and a duty to share in any losses incurred. In order to avoid any trouble in later stages, the parties should be aware of all the terms, conditions, and clauses of the agreement. 

The Right Guidance

Every initiative requires effective guidance from the expert and experienced. CEO coaching provides you the requisite guidance and knowledge you need to have before entering into a joint venture. There are a number of reputed CEO Associations that holds expertise in providing CEO training. You should consider joining a CEO club to understand more about a joint venture.