Please click on the [+] mark to get the answer
How can I reduce any risks associated with exporting my services?
[+]
In most instances, the degree of risk you will face is directly related to
ensuring that you are indeed "export ready" (see Question 7) and the way in
which you develop your customer base abroad. The following are the most common
strategies used to reduce risk:
| Type of Risk |
Strategies Used |
| Not getting paid |
Develop good customer relations
Prior due diligence on customers |
| Legal action for "noncompletion" |
Manage customers' expectations well
Professional liability insurance |
| Loss on foreign exchange |
Contract for exports in a stable currency |
| Reduced domestic quality |
Ensure adequate capacity to export and still provide quality service to domestic customers |
| Creating local competitors |
Select local partners with complementary, rather than similar, expertise |
Resources from ITC for additional information:
Services Export Readiness
Diskette, 1998.
Successful Services Exporting: A Handbook for Firms,
Associations and Governments, 2001 (Chapter 7).
Click on [-] to hide the text or :
Hide the text
How do I know if my service will be competitive abroad?
[+]
First ask yourself how you would know if your service would be competitive in
another part of your own country. Your competitiveness is probably related to
one or more of the following three factors:
- Your ability to provide quality control as good or better than your
competitors — competitive based on quality.
- Your ability to provide better value for money than your competitors —
competitive based on price.
- Your ability to address an unmet customer need — competitive based on
uniqueness.
- Your ability to provide a culturally appropriate service.
To assess these factors, you will need to do market research into your
competitors in the market and what they offer, the needs of your target
customers, and the cultural differences to which you need to adapt.
Resources from ITC for additional information:
Innovating for Services
Export Success, 2001 (Chapter 4).
ISO 9000: A Workbook for Service Firms in
Developing Countries, 1998.
Services Export Readiness Diskette,
1998.
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapters 2 and 11).
Click on [-] to hide the text or :
Hide the text
What is "quality" in services?
[+]
The International Organization for Standardization (ISO) defines quality as the
"totality of features and characteristics of a ...service that bear on its
ability to satisfy stated or implied needs" (from ISO 8402). A more pragmatic
definition is "to meet or exceed the expectations of customers."
Click on [-] to hide the text or :
Hide the text
What is the GATS?
[+]
The General Agreement on Trade in Services (GATS) is a trade agreement that
establishes a multilateral framework of principles and rules for trade in
services. Its objectives are to expand services trade under conditions of
transparency and progressive liberalization, and to promote the economic growth
of its trading partners. In addition to a general framework of principles, the
GATS requires its Members to set out a specific schedule of commitments defining
how much market access service providers are allowed for specific service
sectors, and under what national treatment conditions.
The obligations and
commitments that Members of the GATS make are subject to enforcement through the
WTO. Once commitments on specific services have been undertaken, they cannot be
withdrawn without compensating the other Members. However, the fact that a
country is a signatory to the GATS does not guarantee that it has made
far-reaching commitments to open its markets in all sectors and/or for all
measures affecting the supply of services. The level of commitments vary
significantly among WTO Members.
Resources from ITC for additional information: A Business Guide to the
General Agreement on Trade in Services, 2001 (Section A).
Click on [-] to hide the text or :
Hide the text
What do I need in order to export successfully?
[+]
To be "ready" to export successfully, you need five things:
- Support from senior management for your export objectives and strategy.
- Adequate resources including finances, delivery capacity, and staff who are
sensitive to cultural differences.
- A competitive service well-matched to the needs and preferences of local
customers.
- Realistic expectations of what it will take to succeed.
- A flexible and timely export strategy based on appropriate market
research.
Flexibility in your export strategy is critical because the international
competitive environment changes so rapidly and market opportunities often come
and go in less than six months.
Resources from ITC for additional information:
Innovating for Success in
the Export of Services, 2001 (Chapters 2 and 9).
Services Export Readiness
Diskette, 1998.
Successful Services Exporting: A Handbook for Firms,
Associations and Governments, 2001 (Chapters 10 and 11).
Click on [-] to hide the text or :
Hide the text
How do I decide on the right timing for starting to export?
[+]
The traditional advice to goods producers has been to mature in a domestic
market before exporting. This advice is not relevant for service firms. Many
service firms have only export markets if they supply a specialized service for
which there is little demand in their home market. So use the Services Export
Readiness Diskette to access your export readiness and start as soon as you feel
ready. You may wish to choose a period of "slack" time when you can focus
properly on export market development. Remember, though, that you need to allow
lead time of at least several months for that market development activity before
you can expect export sales to begin.
Resources from ITC for additional information:
Services Export Readiness
Diskette, 1998.
Click on [-] to hide the text or :
Hide the text
What are the most common mistakes made by service exporters?
[+]
Most export mistakes fall into one of four categories:
- Poor or rushed preparation, including travelling to foreign markets without
spending time on market research and developing a series of contacts.
- Approaching a market "cold" rather than getting referrals from satisfied
customers and other network contacts.
- Trying to promote one's service without first spending time establishing
one's credibility as a provider of quality services.
- No attempt to customize the service to cultural values and norms.
Resources from ITC for additional information:
Innovating for Services
Export Success, 2001 (Chapter 4).
Successful Services Exporting: A Handbook
for Firms, Associations and Governments, 2001 (Chapters 4, 6, 10, and 11).
Click on [-] to hide the text or :
Hide the text
Why do I need an export strategic plan?
[+]
An export strategic plan provides a document that allows you to:
- Coordinate the efforts of all staff to focus on the same priorities.
- Manage the expectations of senior management regarding how long it will take
to become profitable and what resources will be needed.
- Monitor your progress towards your export objectives and make adjustments in
your strategy as needed.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
2).
Click on [-] to hide the text or :
Hide the text
How can I build credibility abroad as a service provider?
[+]
The single greatest challenge you are likely to face as a service firm from a
developing or transitional economy is being accepted as a credible provider of
quality services. To build that credibility, there are three general strategies
that you can use:
- Objective verification of your competence through:
- Public presentations and speeches
- A corporate website
- Appropriate licenses/certifications for professional staff
- ISO 9000 registration for your firm's quality assurance system
- Awards to your firm or professional staff for excellence
- Publications by professional staff
- Listing of your firm in well-known prestigious directories
- Media coverage of your firm's activities
- Strategic alliances with known industry leaders
- Personal guarantees of your competence through:
- Referrals from well-known contacts
- Testimonials from satisfied customers
- Industry association membership
- Your presentation image:
- Your "benefits" statement
- The quality of your promotional materials
- Your sensitivity to cultural factors
Resources from ITC for additional information:
Innovating for Success in
the Export of Services, 2001.
Successful Services Exporting: A Handbook for
Firms, Associations and Governments, 2001 (Chapter 4).
"Gaining credibility
abroad as a service exporter." (FORUM, 1/1997)
Click on [-] to hide the text or :
Hide the text
How can I get export-related experience?
[+]
There are a number of ways to get low-cost export-related experience such as:
- Expanding your service delivery to other regions of your country to gain
practice in managing dispersed service delivery sites and/or delivering to other
ethnic or cultural groups.
- Providing services to foreign firms or inter-governmental organizations
(such as the United Nations) in your own market.
- Acting as a subcontractor to experienced exporters from your country.
- Participating in bilateral aid projects from your country to neighbouring
economies.
- Acting as a prime contractor or subcontractor on internationally financed
projects in your home country.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapters 2,
8, and 11).
Click on [-] to hide the text or :
Hide the text
How long before we can expect to see a profit?
[+]
Developing a profitable export initiative takes time and investment. You can
accelerate the process by:
- Doing your homework on the target market from your home base before you
incur travel expenses.
- Working through your network of contacts and satisfied customers instead of
entering a new market "cold."
Generally speaking, unless your service can be provided entirely on-line, it
takes from three to six trips to the export market in order to develop an export
opportunity. You will reduce your sunk costs if you work to offset your travel
costs and link market development trips to travel to/from existing export
contracts.
If you enter the market through a strategic alliance with a local partner,
you may find that you can become profitable almost immediately. If, on the other
hand, you choose to enter the market independently, you should take the usual
time it takes you to become profitable in a local market and at least double it
as you will have additional costs.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
9).
Click on [-] to hide the text or :
Hide the text
How can we best finance our export market development?
[+]
In most developing and transitional economies, export-related financing for
service firms is a challenge. Most financing available is structured for goods
exporters. This leaves you with three usual sources of financing for export
market development:
- Working capital (i.e., the cash available in your firm)
- Shareholder's loans (i.e., cash you lend the firm)
- Creditor debt (e.g., charging airline tickets on a credit card)
Once you have an export contract, you may be able to get your customers to
pre-pay some expenses (e.g., airline tickets, project mobilization payments).
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
9).
Click on [-] to hide the text or :
Hide the text
What kinds of organizations might help me prepare to export?
[+]
There are typically a number of public and private organizations that offer
export-related assistance. The challenge is that most, if not all, of them use a
"product exporting" model that works well for goods but not for services. You
will need to make sure that you are receiving the types of preparatory support
that works for your service. Sources of assistance to try include the following:
- Government trade officers
- Trade and service industry associations, including World Trade Centres
- Private consultants and Trade Tutors
- Training institutes
Click on [-] to hide the text or :
Hide the text
What is the World Trade Organization?
[+]
The World Trade Organization (WTO) is a intergovernmental treaty that entered
into effect on 1 January 1995. Its Secretariat in Geneva administers a basic
framework of rules for international trade in goods and services. The WTO
Agreement contains in its annexes, three major multilateral accords which
incorporate the contractual agreements negotiated by its Members: the General
Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in
Services (GATS), and the Agreement on Trade-Related Aspects of Intellectual
Property (TRIPs).
Through this framework and agreements, the WTO provides a clear set of trade
obligations for each of its 132 Member countries and a legal structure for
ensuring that those obligations are observed.
Information on the WTO and its
programs can be found on its website: www.wto.org
Resources from ITC for additional information: A Business Guide to the
General Agreement on Trade in Services, 2001 (Section A).
Click on [-] to hide the text or :
Hide the text
Who in my firm needs to support the export strategic plan?
[+]
Depending on how your firm is organized, there are likely to be five types of
persons who need to give your export initiative their full support:
- Senior management
You will need financial resources to fund the plan, an allocation of staff
time for export development, and an allocation of senior management time to
travel and build credibility abroad.
- Service delivery staff
You will need to have service delivery staff who are interested in
customizing services to other cultures and willing to travel as needed.
- Front office support staff
In order to be accessible to foreign customers, you may need front office
cooperation to provide coverage during extended hours and in different
languages.
- Human resource trainers
You will need to provide staff with training in the differences in cultural
values and business practices between your market and your target market.
- Market research staff
You will need to have research staff begin tracking a range of market
information for your targeted market.
- Management information systems staff
You will need informatic support for staff who are travelling as well as for
culturally appropriate on-line interactions with strategic allies and customers.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
10).
Click on [-] to hide the text or :
Hide the text
What makes an export market attractive for my service?
[+]
The factors that make a particular market attractive will vary from firm to
firm. In deciding what to use in short-listing a potential market, consider the
following factors:
- A good cultural match to our firm
- Few or no major competitors
- A growing market where:
- Our sector is growing rapidly
- Our government officials have good contacts
- Easy to reach:
- Direct air flights from home
- On the way to a current market
- Easy to make contacts:
- We already have local contacts there
- Staff already have family/friends there
- Will be the site of an upcoming major industry event
- Easy to establish "local presence" through:
- A local partner we already know
- A local partner we still need to locate
- A commercial "mini-office" arrangement
- A World Trade Centre complex
- Easy to service at a distance through:
- An "800" number
- An e-mail address
- An Internet website
Resources from ITC for additional information:
Innovating for Success in
the Export of Services, 1999 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
Which type of market should I consider?
[+]
Being "export ready" depends on a good match between the type of market you
choose and the characteristics of your firm. There are three general types of
markets to consider:
- Fast-paced, competitive economies
In such economies, new customers are
willing to deal with strangers as long as they feel confident that you have the
expertise to perform well. Efficient service delivery, excellent quality
assurance, and a media profile are critical for your success. If you are not
fluent in the language, you can work through a local partner to handle
linguistic and cultural differences.
These markets include the United States, Australia, New Zealand, Hong Kong
(China), Singapore, and the northern European countries.
- Relationship-based, relatively affluent economies
In such economies,
customers usually deal only with known suppliers -- i.e., firms that they know
and trust. Here interpersonal communication skills, cultural sensitivity, and
linguistic fluency are critical in developing a good relationship with a
potential new customer or a local partner with whom you can do business. Such
relationships typically need to be developed first at a senior level, so your
senior staff need to be prepared to travel extensively.
These markets include Japan, southern Europe, the affluent Middle East, and
the more affluent developing countries.
- Developing economies where third-party funding is often needed
In such
economies, few private sector organizations or government ministries have the
funds to pay for imported services. Instead, they look to international
financial institutions (IFIs) for funding. In these markets, market development
takes time, flexibility, and being politically astute. It is very helpful if you
already have experience working with a third-party funder (e.g., one of the
international financial institutions such as the World Bank).
These markets include the developing nations in Africa, Asia and the Pacific,
Latin America and the Caribbean, the Middle East, as well as the economies in
transition (i.e., economies of the former Eastern Europe and U.S.S.R.).
Resources from ITC for additional information:
Services
Export Readiness Diskette, 1998.
Successful Services Exporting: A Handbook
for Firms, Associations and Governments, 2001 (Chapter 10).
Click on [-] to hide the text or :
Hide the text
Where can I find market reports on opportunities in specific service sectors?
[+]
You can find analyses of global trends in service industries in several places:
- Economist [centrefold industry overviews]
- Financial Times
- Standard & Poor's Industry Surveys
The ITC Services Exporting Homepage has global profiles from a
developing/transitional economy perspective on the following industries:
- Accounting
- Back office services
- Business tourism
- Commercial education and training
- Computer services
- Environmental management services
- Health services
- Industrial design
- Insurance and reinsurance
- Internet management services
- Temporary personnel services
Click on [-] to hide the text or :
Hide the text
Where do I find information on market entry restrictions?
[+]
As the commitments made under the General Agreement on Trade in Services (GATS)
become more detailed, you will be able to get much of the information you need
off of the World Trade Organization website. Other sources of information include:
- Government trade officers
- Foreign trade staff posted within your country
Resources from ITC for additional information:
A Business Guide to the
General Agreement on Trade in Services, 2001 (Section C)
Click on [-] to hide the text or :
Hide the text
Where do I find information on industry regulations and standards for my service industry in a particular market?
[+]
Your best source of information will probably be the relevant service industry
association, if one exists, or a local strategic partner. Other sources of
information include:
- Government trade officers
- Foreign trade staff posted within your country
Resources from ITC for additional information:
A Business Guide to the
General Agreement on Trade in Services, 2001 (Section D).
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
11).
Click on [-] to hide the text or :
Hide the text
How do I find out who my competitors are and what they are offering?
[+]
To be internationally competitive, you will want to track potential competitors
worldwide to see what kinds of services they are offering. Not only will this
let you know what customers are expecting, but it will also help give you ideas
for how to customize your services profitably. One of the best ways to do this
is through monitoring websites that provide benchmarking and best practices
information, such as:
In any target market, you will probably have both local and international
competitors. If your government trade officers are not able to help you identify
them, you should be able to do so through an industry or trade association or
through local news sources. To learn about their services, you can either ask
them directly or talk with persons (like potential strategic partners)
interested in being helpful to you.
Resources from ITC for additional information:
Services Exporting Home
Page
Successful Services Exporting: A Handbook for Firms, Associations
and Governments, 2001 (Chapter 11).
Click on [-] to hide the text or :
Hide the text
How do I develop a reputation within a specific foreign market?
[+]
You will find that you need to focus both on international credibility building
activities and on activities in the target market:
General international strategies:
Click on [-] to hide the text or :
Hide the text
How do I find out which trade events would be best for me to attend?
[+]
If possible, develop an ally within the target market (perhaps a potential
strategic partner) who can advise you on a range of issues. You will want to be
sure to select the events you attend carefully so that you use your time and
resources wisely. Other possible sources of information:
- Colleagues who know the target market.
- Government trade officers.
- Trade journals and newsletters.
Resources from ITC for additional information:
Services Exporting
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapters 4 and 6).
Click on [-] to hide the text or :
Hide the text
How do I prepare for an international trade event?
[+]
You will want to think carefully about what your objectives are through
participation in the event, and then carefully prepare to support those
objectives by:
- Getting a preliminary list of participants and contacting those you want to
meet.
- Getting onto the program as a speaker or discussant so that you are more
visible.
- Modifying or translating your promotional materials as appropriate.
- Preparing media kits to be left in the media room.
- Taking advantage of your travel to meet with prospective contacts along the
way.
- Making sure that you will have plenty of business cards to distribute.
Resources from ITC for additional information: Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapters 5
and 6).
Click on [-] to hide the text or :
Hide the text
Should I join an industry or trade association in my target market?
[+]
Joining an industry or trade association in your target market can provide you
with the following benefits:
- Credibility by being listed in their directory
- Information on local issues and events
- An easy context for networking
- A way to find suitable local partners
- A way to become "known" by participating in association events
- Information about competitors and niche opportunities
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapters 4 and 6).
Click on [-] to hide the text or :
Hide the text
What if I want to bid on government contracts?
[+]
In many markets, government contracts are reserved for local firms. You should
ask your government trade officers about what kinds of contracts you could
realistically acquire. The easiest way to get such a contract is as a
subcontractor to a local strategic partner.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 7).
Click on [-] to hide the text or :
Hide the text
How can I find out about international bidding opportunities?
[+]
If you want to do work for an international financial institution (IFI), you
will need to develop personal contacts with the IFI officials involved. As a
first step, though, you need to become registered with the appropriate IFI,
which you can do through the appropriate website:
On the websites above, you will also find listings of upcoming projects and
their status.
Initially, you may want to contact established firms that are bidding on the
contracts and offer your services as a subcontractor. Working for a
knowledgeable prime contractor can give you valuable experience and allow you to
establish a track record of success so that you are more attractive as a bidder
in the future.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter 8).
Click on [-] to hide the text or :
Hide the text
What is the best way to enter a foreign
market?
[+]
You usually have several strategic choices:
- Export entirely through a "virtual" presence on-line
As doing business via the Internet becomes more widely accepted, you
may find this option increasingly attractive. Some service exporters
have only met their customers "virtually."
- Export initially to foreigners in your home market
One of the easiest ways to enter a new market is to sell your
services to a respected foreigner doing business in your home market
and then get him to refer you to colleagues in the target market.
- Subcontract to a known international industry leader
By working with a well-known international firm, you can build your
own reputation in the target market.
- Subcontract to an exporter from your country
Aligning with an experienced exporter from your country is not
exporting per se as you are not being paid by a foreign customer;
however, you can save valuable time in learning about the market so
that you can develop export business.
- Establish a local office on your own
If you have a unique or known service, you find it works best to set
up your own office in the target market.
- Enter into a strategic partnership with a local firm
One of the fastest ways to get known in a target market is to become
partners with a well-known local firm.
Resources from ITC for additional information: Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapters
7 and 11).
Click on [-] to hide the text or :
Hide the text
How can I maximize my profitability?
[+]
As in your domestic market, there are two ways to increase profit: increase
revenues, or decrease costs. Because of the extra costs involved in exporting,
you will want to be careful that you are positioned in a market so that you can
charge enough that you more than cover your costs. Usually this means competing
on quality (or "value for money") rather than price, or offering a unique
service for which customers are willing to pay a price premium.
In terms of costs, you will usually find it least expensive if you can export
a service without leaving your home base. Here you have two options:
(a)
export "cross border" electronically, or
(b) sell your services to foreigners
who come to your home market.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 11).
Click on [-] to hide the text or :
Hide the text
How can I use existing customers to open export markets?
[+]
Existing satisfied customers in your home market or another foreign market can
be extremely helpful to your export efforts by providing:
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter
6).
Click on [-] to hide the text or :
Hide the text
How can I use my own country's National Export
Strategy to assist my export efforts?
[+]
First you will want to review that strategy to see if it addresses your needs as
a service exporter. If not, then you might find it helpful to urge your service
industry or trade association to make suggestions for how to make it more
relevant to your service industry.
Second, you will want to participate in any national trade missions or export
promotions that fit with your export development strategy.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapters 18, 19,
20).
Click on [-] to hide the text or :
Hide the text
When should I work with a local partner?
[+]
You can benefit from working with a local partner when you want to:
- Enter a target market rapidly
Aligning yourself with an established and
respected market leader can give you immediate credibility so that it is easier
to develop business. Also, you may be able to subcontract to your local partner
and so be earning revenues almost immediately.
- Reduce operating costs
Sharing office space, using local staff, and
reducing travel and communications costs will all help reduce your costs.
- Meet regulatory requirements
Some markets require that you have a local
presence or joint venture agreement with a local firm in order to sell into
their markets.
- Provide a local contact for your clients
Working with a well-known local
partner can make your services seem more convenient and increase customers'
comfort in buying from a foreign firm.
- Increase your market knowledge quickly
Working with a local partner is
an easy way to make sure that you learn and understand local culture and
business practices.
- Expand your network
You should be able to access your partner's contact
network and so become known more quickly.
- Provide a unique "bundled" service
By combining complementary service
expertise, you have the opportunity to develop a unique service to meet customer
needs in a "one stop" fashion.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter
7).
Click on [-] to hide the text or :
Hide the text
How can I make sure the partnership is effective?
[+]
The most critical thing you can do is to "test out" the working relationship
before you become publicly identified with your local partner. It is worth the
investment to contract with various candidates to provide services to you so
that you can see how they really do business. Other strategies that help include
the following:
Create a formal obligations statement, defining roles and responsibilities
Create specific milestones and deliverables, and track progress against them
Build in partnership evaluation at regular intervals
Make regular communication a priority
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 7).
Click on [-] to hide the text or :
Hide the text
Why do cultural differences matter in exporting my service?
[+]
The single most common reason for failure in foreign markets is due to an
inattention to cultural factors, not because there was a lack of opportunity.
People choose to do business with others with whom they feel comfortable. Over
sixty percent of how we communicate is through nonverbal cues, most of which are
culture specific. The assumptions we make and the business style that we adopt
are all shaped by our cultural beliefs and values.
Understanding and managing cultural differences is particularly important to
you as a service exporter because of several factors:
- Potential customers will decide whether or not to try your service based on
whether they feel you can meet their needs. That decision process is related to
how appropriately you communicate with them.
- Customers will assess the quality of your service based in large part on the
interactions they have with you and your staff, which take place in a cultural
context. If your behaviour is viewed as culturally inappropriate, customers will
be dissatisfied even if the service was technically correct.
- You and your staff will tend to interpret customers' needs and preferences
through your own cultural filter and so you run the risk of guessing
incorrectly.
Whereas goods exporters can deal through local agents or distributors who are
part of the local culture, service exporters need to establish personal
relationships with potential customers in order to create credibility in the
market. So learning about cultural values and practices is a critical part of
preparing to enter a target market.
Resources from ITC for additional information: Innovating for Success in the
Export of Services, 2001 (Chapter 4).
Click on [-] to hide the text or :
Hide the text
What are the main differences in business practices in different countries?
[+]
In general, business practices are influenced by three main types of cultural
differences:
- The relative importance of interpersonal relationships versus efficient task
completion.
- The relative importance of social status.
- The degree of risk that people are comfortable taking.
Before travelling to your target market, you will want to find out some basic
groundrules such as:
- How strangers usually greet each other
- How business cards are exchanged
- Whether or not small gifts are expected as tokens of respect and
appreciation
- What is usual in terms of socializing
- How business meetings are usually conducted
- How business relationships usually develop
Resources from ITC for additional information: Innovating for Success in the
Export of Services, 1999 (Chapter 4).
Click on [-] to hide the text or :
Hide the text
How can I find out the business practices and rules of etiquette in a particular market?
[+]
There are many books written about doing business in different countries, which
you may want to consult. Check your library for resources on "Cultural Aspects
of International Business." Other sources of information include:
- Colleagues from the target market
- Foreigners from the target market who are working or studying in your
country
- University programs for international studies
- Private consultants who are experts in intercultural communications
- Websites such as the CIA World Fact Book
You will probably find it helpful to spend time with persons from the target
market before travelling abroad in order to get a good sense of basic etiquette.
Resources from ITC for additional information: Innovating for Success in the
Export of Services , 2001 (Chapter 4).
Click on [-] to hide the text or :
Hide the text
How can I customize my services for a particular market?
[+]
When you customize your service, you will need to adapt to local ways of doing
business as well as to culturally appropriate service delivery. Here are some
issues to consider:
Adapting to local ways of doing business may mean changes in:
- Hours of doing business
- Languages in which assistance is available
- Kind of delivery locations
- Whether service is provided at a distance or in person
Culturally appropriate service delivery may mean adapting by:
- becoming more/less formal and deferential
- helping clients feel secure ("no surprises"), or a sense of adventure
- making sure that the service is absolutely consistent over time, or
- helping clients experiment with new ideas
- focusing primarily on rapid service delivery completion, or
- primarily on strengthening client relationships
- expecting staff to follow a set procedure, or take initiative
- taking ultimate responsibility for each staff person, or
- reinforcing a sense of individual responsibility and accountability
- treating all clients and staff the same, as equals, or
- respecting differences in status and title
- helping staff focus on group goals or individual objectives
Resources from ITC for additional information:
Innovating for Success in
the Export of Services, 2001 (Chapter 4).
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapter 2).
Click on [-] to hide the text or :
Hide the text
Does gender make a difference in doing business abroad?
[+]
Traditional biases and practices that discriminate against women still exist in
most countries. In some instances, potential local partners or customers are
simply not used to dealing with businesswomen in positions of authority. This
may be true even if women are well represented in the political hierarchy. In
other instances, there are cultural practices that make it difficult for women
service exporters to network or acquire informal market information.
On the positive side, since there are fewer international businesswomen, a
woman is likely to be remembered. In some instances, women find it easier to
develop export business because they appear less threatening than their male
colleagues.
Click on [-] to hide the text or :
Hide the text
What can I do as a businesswoman to overcome prejudices and limitations?
[+]
One of the most effective ways to avoid difficulties is to get male
"sponsorship" through letters of introduction or meetings arranged by a male
colleague. Your government trade officers may be helpful in this role.
It is also important to make sure that you are behaving like a business
colleague rather than like a social colleague so that male counterparts are
prompted to treat you as a business equal. Depending on the circumstances, you
may wish to restrict the type of socializing you do after hours to large group
functions so that no ambiguity arises.
Click on [-] to hide the text or :
Hide the text
How can I work best with an interpreter?
[+]
If you live in an economy with diverse linguistic communities, you may already
be used to working closely with interpreters. If you have not worked with an
interpreter before, here are some tips:
Before the meeting, supply the interpreter with:
- Corporate literature
- A list of names, titles, and responsibilities of all team members
- A synopsis of your objectives in the market
- Information on the persons with whom meetings are being held
- A list of technical terms to be used
During the meeting:
- Interact directly with your counterpart (rather than speaking to the
interpreter)
- Speak at a moderate pace
- Use common terminology
- Avoid the use of slang or humour that can be misinterpreted
For speeches and formal presentations, supply the interpreter with:
- A copy of the presentation
- A copy of any slides or overheads
- A copy of any handouts
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 11).
Click on [-] to hide the text or :
Hide the text
What language will I need to use in delivering my service?
[+]
You will need to use the language that is expected by your potential customers.
Depending on the market, this may mean multilingual service delivery.
Click on [-] to hide the text or :
Hide the text
What are the main cultural errors in doing business abroad?
[+]
The single biggest error is underestimating the extent to which culture
influences how people assess service options and evaluate the services they
receive. Other common errors include:
- Being too informal, including using first names without permission
- Assuming that what works well in your own culture will work in the target
market
- Allowing too little time to develop a relationship of respect and trust
Resources from ITC for additional information: Innovating for Success in the
Export of Services, 2001 (Chapter 4).
Click on [-] to hide the text or :
Hide the text
What should my promotional materials contain?
[+]
Remember that potential customers are looking for reassurance that you can
successfully meet their needs. It will help to have culturally-appropriate
content such as:
- benefit messages ("here's what our service can do for you...")
- competitive positioning messages ("here's how we are different from others")
- testimonials from satisfied customers, including government agencies
- capabilities of your firm
- experience in similar markets
- sample list of former customers
- awards you have received or prestigious appointments
- quality assurance certifications
- industry association memberships
- quotes from media coverage
Your website should contain similar information along with material that is
educational or helpful to the browser.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 5).
Click on [-] to hide the text or :
Hide the text
What information do I need on my business card?
[+]
Your business card is your most important marketing tool. The type of
information it contains not only helps people contact you but also can reinforce
your competitive image. At a minimum it should contain:
- Your name, along with relevant professional designations or degrees
- Your position title
- Your company's name and logo
- A few words describing your service (eg. “Web design specialists)
- Your address, including country
- Your phone and fax numbers, including country and city codes
- Your e-mail address and corporate website
Depending on the market, you may find it helpful to make your business card
bilingual with your native language on one side and the major language of the
target market on the other.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 5).
Click on [-] to hide the text or :
Hide the text
Are my materials of an appropriate quality?
[+]
You want to be sure that your promotional materials convey a worldclass
impression. To test them, you can do the following:
- Select sample service firms in your target market and review their
promotional materials. Are yours at least as sophisticated?
- Show your promotional materials to colleagues familiar with the target
market and ask for their opinion.
- Try to look at your materials as if for the first time. What impression do
you get?
Be sure that your materials are grammatically correct and printed flawlessly,
are easy to read, and are in colours that are appropriate for your target
market.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 5).
Click on [-] to hide the text or :
Hide the text
Do I need to translate my materials or can I use what I have?
[+]
Unless the main language of your target market is the same as your own language,
you will need to get at least your primary promotional pieces translated. Try to
hire a translator from the target market as language usage differs from country
to country. Also, keep in mind that you need not do a literal translation but
rather a translation that captures the spirit of what you are trying to convey.
Click on [-] to hide the text or :
Hide the text
What quality factors matter to customers abroad?
[+]
Just as in your domestic market, foreign customers will want to be sure that
their expectations are met. This means that you need to actively shape customer
expectations so that they are appropriate by educating potential customers about
what you can deliver. Then you need to meet those expectations consistently.
Typical service quality factors worldwide are:
- Consistency in service provision
- On-time delivery
- Courtesy in business dealings, and
- Appropriateness of the service to their cultural make-up
In addition, exporters must conform to the technical and other requirements
of their markets. By taking the time and making the effort to understand these
requirements and then to create a quality monitoring system, your business will
avoid the service delivery quality problems associated with entering a new
market.
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
What quality standards are relevant to services exporting?
[+]
The best way to assure potential customers that you can deliver quality services
is to be registered to ISO 9001:2000. While most markets do not require
registration to this standard, registration does provide a competitive edge.
Your firm may have initiated other quality-related processes such as business
process re-engineering (BPR), continuous quality improvement (CQI) and total
quality management (TQM). BPR usually calls for a fundamental redesign of a
firm’s processes with a view to achieving radical improvements in employee
performance and a more efficient use of resources. CQI shifts the focus from the
end product or service to the process by which they are created. TQM is a
management philosophy that involves all of an organization’s employees in a
structured quality system that integrates the business environment, ongoing
improvements and changes in organizational culture. While these processes will
help you identify what you need to do in order to improve quality, or to provide
a particular level of service, or meet specific client expectations, they will
not necessarily give you international recognition. Registration to ISO 9001
will.
The adoption of a quality management system (QMS) should form part of your
company strategy. Its design and implementation will be influenced by your
company’s needs, objectives, the services it provides, the processes it employs,
as well as by its size and structure.
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
What quality standards matter to my market?
[+]
The requirement for registration to various standards is evolving rapidly and
varies from market to market and industry to industry. You will need to research
your precise market requirements. The following may be useful sources of quality
standard information:
- Trade officers
- Industry associations (national/international)
- American Productivity and Quality Centre (http://apqc.org)
- International Organization for Standardization (http://www.iso.ch)
The industries requiring registration are changing rapidly, but some recent
examples requiring ISO 9000/ISO 14000 registration of their suppliers include
the following:
- Auto industry
- Pharmaceutical industry
- Aerospace industry
- Environmental industry
- Software industry
Some examples of private sector corporations requiring registration from
suppliers include Ford, Chrysler, General Motors, IBM, Corning, Digital, DU
Pont, Exxon Chemicals, Federal Express, Kodak, MonSanto, Xerox, Volkswagen,
Renault, etc. Once again, requirements are changing virtually daily, so it will
be important to verify the expectations of your particular customer.
Some examples of national governments requiring ISO 9000 registration for
suppliers include Australia, Canada, New Zealand, United States, Singapore, and
the U.K. There can be additional regulations at the provincial or state
government level.
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
How do I decide whether I should become registered to a quality standard?
[+]
Your primary concern should be whether or not registration would improve your
competitiveness. Externally what matters is whether or not registration matters
to your potential customers. In some instances, registration may be required. In
other instances, registration may provide added assurance to the potential
customer that you can deliver.
Internally, conformance (if not registration) to a quality standard should
streamline your delivery system and help to eliminate re-work. Benefits from
registration are only possible if there is clear management support for the
initiative.
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
How does one get registered to an ISO standard?
[+]
The following are the common steps in the registration process:
- Choose a registrar to work with
- Evaluate your current procedures and documentation against the standard's
requirements
- Address any procedural or documentation gaps
- Submit your documentation to the registrar for review
- Schedule an on-site audit by the registrar
- Address any nonconformances revealed in the audit
- Certification
For more information:
International Organization for Standardization (www.iso.ch)
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
Where can I find more information on quality standards relevant to my industry?
[+]
Your national standards body (NSB) is a primary resource. They will generally
have a standards information centre. In addition, there are a number of on-line
resources:
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
What are the benefits of registration to ISO 9000?
[+]
Benefits in the marketplace:
- Increased customer confidence,
- Enhanced market image as a leading-edge firm,
- Ability to meet bidding requirements for selected contracts, both domestic
and foreign,
- Better communication with suppliers (as part of the quality system),
- Ability to attract major new clients and keep important current clients,
- Decrease in complaints and customer dissatisfaction, and
- Ability to keep up with, or stay ahead of, the competition.
Internal benefits:
- Better documentation of processes for delivery control,
- More rigorous staff training,
- Greater staff awareness of the factors that produce customer satisfaction,
- Better selection of qualified subcontractors,
- A rational basis for identifying key staff training needs,
- Reinforcement of good work habits,
- Reduction of operational costs as greater efficiencies are achieved,
- Lower expenditure on re-work or last-minute panics,
- Simplification of routine procedures,
- Improved product design, and
- Increased motivation of employees.
Resources from ITC for additional information: An exporters Guide to Quality,
Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
What are the costs of registration to a quality standard?
[+]
The cost will depend on the condition of your existing quality system, the size
of your firm, the type of registration you require, and the particular registrar
with whom you choose to work. Some registrars have discounted fees for small
businesses and will negotiate a fixed fee so that you can budget more easily for
the expense. Costs that you should expect include:
- Staff training in quality procedures and requirements of the standard
- Temporary personnel to back-up staff engaged in quality systems development
- Registrar costs for the audit
For smaller service firms, you can probably expect to pay at least US$5,000.
Resources from ITC for additional information: An Exporter's Guide to
Quality, Trade Secrets Series, 2001.
Click on [-] to hide the text or :
Hide the text
How do I set a price for my service in a foreign market?
[+]
In pricing your service, you need to take into account both what people expect
to pay for the service and what your break-even point is. You can calculate your
break-even point by determining how much you need to make per service (or per
unit of time) in order to cover both your fixed (overhead) costs and your
variable costs linked to providing that service. For professionals, you would
calculate your daily break-even fee by totalling all of your costs and dividing
by the number of days you have available to provide the service. In calculating
the number of days available, be sure to deduct the days you will need for
holidays, business development, professional development, and administrative
work (which is likely to leave you with between 160-185 days available).
Your price needs to include hidden communication/transportation costs and
other non-domestic expenses such as possible currency fluctuations prior to the
end of the contract. You need to price your service in the currency most
acceptable to your customer.
If the country requires that a certain percentage (often between 15 to 30
percent) of any professional fee be withheld at source for tax purposes, you
will need to build into your price your cost of financing or else find a local
presence option to avoid the withhold. As a result of tax treaties, you will
probably be able to recover the withheld amount...but that could take up to 18
months.
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
9).
Click on [-] to hide the text or :
Hide the text
What are the most common pricing mistakes?
[+]
Some common mistakes include neglecting to take into account:
- Hidden travel and communication costs
- Potential currency fluctuations
- Fee holdbacks at source
- The cost of financing receivables that take longer to collect
- Subcontractor expenses
- Translation/interpreter expenses
The biggest mistake is in underestimating how long it will take to prepare
and deliver a service in an unfamiliar market (different holidays, work ethic,
etc.)
Resources from ITC for additional information:
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How big a variable is price in the customer's purchase decision?
[+]
The role that price plays depends on the type of service you are offering. If
you are offering a standard service that is already available in the target
market, customers are likely to be extremely price sensitive. If, on the other
hand, you are addressing an unmet need and offering either a unique service or a
highly customized service, then customers are likely to be relatively
indifferent to price as long as they feel they are receiving good value for
money. In fact, they may be willing to pay up to a 10 percent premium in order
to get exactly what they need from you.
Since, as an exporter, you have additional communication and travel costs, it
is difficult to be profitable is you compete solely on price.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How can I find out how my competitors are pricing their services?
[+]
Colleagues familiar with the target market should be able to tell you how
competitors are pricing their services. You can also "shop" for their services
to find out for yourself or ask:
- Current customers
- Government trade officers
- Embassy staff
- Competitor's subcontractors/suppliers
- Ex-employees
You may also be able to get standard pricing information from:
- Competitor's websites and promotional material
- Trade associations
- Trade journals
Resources from ITC for additional information:
Successful Services
Exporting: A Handbook for Firms, Associations and Governments, 2001 (Chapter
9).
Click on [-] to hide the text or :
Hide the text
What should be in my contract to make sure I get paid?
[+]
The best way to make sure that you get paid is to have a good working
relationship with your customers and provide quality service. When you enter
into a contract for services, you will also want to have some legal protection
in terms of a written contract. Here are some of the items that should be
addressed in the contract:
To avoid disputes about completion of contract requirements:
- Specification of precisely what you are to deliver
- Specification of the time for service completion
To facilitate the payment itself:
- The amount of payment, including any applicable taxes or withholds
- The currency of payment
- The method of payment (e.g., wire transfer)
- When the payment is due
- Interest to be paid if the payment is late
To address any payment-related disputes:
- The jurisdictional law that applies to dispute settlement
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How should I arrange the terms of payment?
[+]
Service exporters typically extend to their customers an "open account," meaning
that the service is produced and delivered before payment is received. You may
wish to negotiate partial payment prior to final delivery to protect you in case
of default or extensive delay in settling the account. Two forms of partial
payment are common:
- a mobilization payment at the beginning of a large contract
- “milestone” payments for receiving “work-in-progress” payments
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How do I arrange for wire transfer or direct deposit?
[+]
The most rapid ways to get paid are cash-in-hand or a wire transfer directly to
your bank. If you want payment by wire transfer, you will need to supply your
customer with the routing information for your bank as well as your bank account
number. You will need to obtain the routing information from your banker, and it
may include routing though a "correspondent" bank.
You will need to provide the following information to your foreign customer:
- Branch transit number, including institution code
- Your bank account number
- Street address of your bank, including city and country
- Telephone number of your bank
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How do I develop a supportive relationship with my banker?
[+]
It is often very difficult for service exporters to get financing support of any
kind. If you do get financing, it is likely to be from your bank. Whether or not
your bank is supportive will be related to the degree of risk they think is
involved. You can help reassure your bankers that you are a good risk by:
- Reviewing your export strategy with them
- Supplying them with information about any awards or honours you have
received
- Providing them with monthly financials showing that you are fiscally sound
- Providing them with a list of your major customers or contracts
You may find that it is necessary to meet with more senior bank officials
(with higher signing limits) or bank officials specifically responsible for
trade financing in order to get the support you need.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
How do I assess my customer's ability to pay?
[+]
In many ways, you would assess your foreign customers in the same way that you
do domestic ones. The difference is that you are unlikely to have personal
knowledge of who is and is not a good risk. Here are some resources to help you:
- Major banks through overseas branches and correspondents
- Other exporters who know the customer
- Credit-check services to investigate and submit a credit report of potential
buyers
- The service industry association in your target market (especially if you
have become a member)
- Government trade officers
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
What do I do if my customer fails to pay?
[+]
First, you will need to find out the reason for non-payment. It may be as simple
as a mis-placed invoice or bureaucratic delays in accessing foreign exchange for
payment. if the customer has declined payment because of dissatisfaction with
the service, then you will need to address those concerns.
If you have met all of your obligations and the customer has no good reason
for nonpayment, then you have several options:
- Collection through persuasion. The foreign bank, government finance agency,
and/or collection agency are the most likely allies in pressing your claim.
Sometimes a letter from your lawyer will yield the same result.
- Collection through mediation or arbitration. Your lawyer or the
International Chamber of Commerce can provide you with information on
arbitration options.
- Collection through the legal system. Protest documents are prepared by a
notary in the buyer's city and establish your legal rights against the buyer.
These documents are recognized by the local courts. The courts could then be
used to establish your claim and force payment of your outstanding receivable.
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 9).
Click on [-] to hide the text or :
Hide the text
Under what conditions can I travel freely to other markets?
[+]
You will need to visit your target market for at least business development
purposes and possibly also for service delivery once you have a contract. This
means that you will have to be able to get across the border, with the
permission of an immigration officer. Immigration officers are responsible for
blocking the entry of politically undesirable persons, law breakers, and
undocumented workers who would take jobs away from citizens of the country.
While these officers are trained to recognize and admit tourists, students, and
documented workers, they are not necessarily trained to recognize business
persons who have the right to enter temporarily under the new services trade
agreements. They are particularly alert to detaining persons who they think are
trying to immigrate and look for work without the proper authority.
It is critical that you emphasise the temporary nature of visit and the fact
that you are and will remain employed in your home market. You want to use words
like "looking for contracts" or "finding new customers" or "finalizing a
business deal."
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 11).
Click on [-] to hide the text or :
Hide the text
How can I make my border crossings as easy as possible?
[+]
In order to facilitate your temporary business entry into foreign markets, be
sure to carry the following information with you:
- Proof of citizenship
- Proper visas
- Proof of job status and credentials
- Proof of meetings to be held
- Proof of immunizations
- Extra visa photos
- Passport current for at least six months after the travel date
Before you start your trip, make sure that you know your rights in
terms of market entry.
At the border, your demeanour is important. The
following tips may be helpful:
- Act professionally
- Be deferential
- Answer only what is asked
- Don't volunteer information
- Remain calm and at ease
Resources from ITC for additional information: Successful Services Exporting:
A Handbook for Firms, Associations and Governments, 2001 (Chapter 11).
Click on [-] to hide the text or :
Hide the text
How do I find out the national holidays in my target market?
[+]
Each market has its own schedule of holidays. Here are some sources of
information:
- Government trade officials
- CIA World Fact Book
- A national website of your target market
- Target market embassy/consulate located within your country
Click on [-] to hide the text or :
Hide the text
Are there any safety precautions I should take when travelling abroad?
[+]
Although travelling abroad is exciting, you may also be perceived as a rich
stranger and therefore a target for potential acts of violence. You should take
simple precautions, such as:
- Avoid wearing expensive accessories
- Avoid carrying large sums of cash
- Never leave your luggage unattended
- Don't walk alone at night
- Don't disclose your hotel room number
- Carry emergency contact numbers with you
- Know what to do if your passport is lost/stolen
- Know what to do if you are arrested or robbed
Click on [-] to hide the text or :
Hide the text
How do trade agreements (like GATS) help me as an exporter?
[+]
The primary benefit for service exporter is increased transparency and
predictability in international markets. Agreements like the GATS also
incorporate provisions to prevent further trade restrictions, and establish
requirements for their Members to engage in ongoing rounds of negotiations for
progressive liberalization.
In terms of accessing foreign markets, the GATS ensures, as a basic
principle, that firms are treated the same way as any of their foreign
counterparts. The GATS also contains rules designed to eliminate discrimination
between foreign service providers and their domestic counterparts. If unfair
discrimination does exist in the regulation of a market which results in less
favourable treatment or access for foreign service suppliers, the onus is on
Members to declare this discrimination openly in their schedule of specific
commitments so that it is clearly visible to exporters.
Resources from ITC for additional information: A Business Guide to the
General Agreement on Trade in Services, 2001 (Sections B and D).
Click on [-] to hide the text or :
Hide the text
Where can I get information on liberalization commitments in my service sector?
[+]
Each Member of the GATS is required to submit a schedule of commitments for
specific service sectors. If you are planning to export your services to a new
market, you should review the schedule of commitments for your target market(s)
to determine what access and national treatment conditions prevail.
The WTO
maintains a website which provides legal texts, sector-specific reports on trade
liberalization agreements, new developments, and government procurement
opportunities.
Resources from ITC for additional information: A Business Guide to the
General Agreement on Trade in Services, 2001 (Section C).
Click on [-] to hide the text or :
Hide the text
What should I do if I feel unfairly blocked from exporting my service?
[+]
You should report the situation to your government ministry or agency responsible for international trade in services under the GATS. Though there is no direct access for private sector firms to the WTO, Member governments who feel that their firms are being treated unfairly or discriminated against by other Members can bring these cases before the WTO dispute settlement mechanism.
The dispute-settlement mechanism provides a forum for discussions between the members to reach a mutually-satisfactory solution. If no satisfactory solution is reached through bilateral discussions, your government can request that an independent panel be established to review the case and impose a binding ruling. Members who are found to be violating their obligations are required to bring their measures into compliance with their obligations under the GATS or provide compensation to the offended Member.
Resources from ITC for additional information: A Business Guide to the General Agreement on Trade in Services, 2001 (Section B).
Click on [-] to hide the text or :
Hide the text
What does it mean to export my services?
[+]
You "export" your services whenever they are purchased by a foreign customer.
Member countries of the World Trade Organization have agreed that this can
happen through any one of four "modes of supply":
- Your service crosses the border from your country to another (e.g.,
e-mailing or faxing or couriering a report to a client).
- Your customer crosses the border temporarily (e.g., foreign
executives attend a training seminar you give in your country).
- Your service firm establishes a commercial presence abroad (e.g.,
a local or regional office)
- You or your staff cross the border into your customer's market to
provide a service (e.g., you deliver a training session at your client's
office).
The key is getting paid by someone resident in another country, no matter
where the service delivery actually takes place.
Resources from ITC for additional information:
A Business Guide to the General Agreement on Trade in Services, 2001 (Section
A).
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapter 2).
Click on [-] to hide the text or :
Hide the text
What are the advantages of exporting my services?
[+]
There are many advantages or benefits you can gain from exporting. Some of
the most common are the following:
- Increasing sales volume beyond what is possible within your domestic
market
- Diversifying risk by broadening your market, currency, and client base. à
- Acquiring contracts in stable, convertible currencies
- Acquiring customers whose needs are a better match for your services
- Utilising your production capacity more continuously
- Extending the life cycle of a service innovation.
- Keeping current clients who are expanding internationally.
- Acquiring new knowledge or experience that you can use in your domestic
market.
Resources from ITC for additional information:
Export Readiness Diskette for Service Firms.
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapter 2).
Click on [-] to hide the text or :
Hide the text
What are the challenges in exporting my services profitably?
[+]
Marketing services is very different from the process of marketing goods,
largely because services are intangible and require the consumer to pay (or
promise to pay) in advance before the completed service can be "inspected."
Therefore, customers usually seek out recommendations from those they know
before trying a new service provider. Some major challenges to service exporters
are:
a. Lack of credibility in the foreign market What you can do to overcome this
is:
b. Focus on building your firm's credibility in the foreign market before
promoting your specific service.
c. Make sure that your promotional materials are world-class and portray the
image you are trying to project, as this will reinforce your competence.
d. Ensure that your firm's principals (senior management) are willing to travel
to build relationships with potential customers abroad.
e. Build a strong base of contacts and "advocates" who would be willing to
recommend your services.
f. Be visible at conferences or through presentations — customers prefer to see
service providers "in action" as a way to sample the service.
g. Learn about the local culture — there is no room for first bad impressions.
h. Form a partnership with a leading local firm to build credibility by
association.
i. Difficulties in gaining temporary business entry to the market.
What you can do to overcome this is:
a. Evaluate travel restrictions carefully before you select a market because you
must be able to cross the border when required.
b. Acquire multiple-entry visas where possible.
c. Apparent lack of convenience.
What you can do to overcome this is:
a. Create a local presence, as most buyers are more comfortable dealing with
local service providers.
b. Establish strong electronic links with your customers.
Resources from ITC for additional information:
Successful Services Exporting: A Handbook for Firms, Associations and
Governments, 2001 (Chapter 2).
Click on [-] to hide the text or :
Hide the text
|
Frequently Ask Questions
on Trade in Services
