What is the common error in Export or FDI?

The most frequent errors in export or FDI happen when companies want to legitimise their brand abroad:

Error 1

Approaching foreign countries, with a time horizon of short-term, often jumping on the first opportunity that happen before, with the objective of getting immediate revenue with minimal investment of resources (financial, human, organizational)

Why is it a mistake?

- In some cases the absence of a careful analysis of the country, produces serious consequences, an example, to export food products in the US. Without a thorough understanding of the complex regulatory America, which provides for strict rules and strict interpretation of the same, today face heavy fines, criminal offenses, and given the strong protect the consumer, causes millionaires against the exporting company; ie the apparent opportunity can turn into a nightmare for the company, with the risk of being banned from the country as an exporter and in the worst cases, ie in the case of complex litigation even close.
- A hurried attitude often leads to ignore the management of patents and trademarks, which has serious consequences, limiting future government and market shares in the foreign country;
- Also, having a short-term horizon, probably leads to an initial increase in sales, but in the medium term, we often fail to maintain or consolidate market share gained, because it lacks the proper supervision of the market, the implementation of effective marketing strategies. Put on a longer timescale, medium and long term, perhaps involves a minimum initial investment, but to maximize market presence and returns over time, as well as providing a governance more responsive to the needs;
- Finally, sometimes for the type of export product or service, the country of destination object of interest, it is not the most appropriate at that time or in the future, it may even be harmful;

Error 2

In some sectors, implement solitary activities, pursuing individualistic impulses

Why is it a mistake?

- Globally, the competition is becoming more and more acute, so act within a system makes it possible to approach the market, and the country, with more security and guarantees. Foreign countries with higher export culture and tradition, show that this collectivist attitude leads to significant advantages and in some cases is the key to determining the success or failure of a project of International Business.
- When we speak of the system, we mean a synergistic action between multiple actors, a system and make short, sometimes a positive lobbying activities in the foreign country, including those in the sector of the exporting country; include banking, institutional Chamber, the synergy between the network of companies that operate in the same industry.
There is an African saying that says, “Just as you go faster, but together we go farther.”
- This is all the more true in some areas, but has reverberations across the board.

Error 3

Going abroad planning to reproduce the same actions that you would put in place in your country

Why is it a mistake?

- Why does the country of destination mundane can have rules, customs, habits very different from their own, and ignore these elements often leads to embarrassing or worse, sometimes tragic consequences.
- This includes the entire normative part of the country, the hard law and soft law, transparency of rules, the indirect costs related to bureaucracy and corruption, the simplicity or complexity in starting a business (Doing Business rating) the steps necessary in the various levels of government operating in the country, (licenses, permits and entry barriers, etc.). In this context, however, we also include a more soft, which is the Cross Culture, and the management of cultural diversity and relational very broad topic that seems to strongly influence the start-up of projects and the government of its consolidated companies.

Example 1

- What prevails, individualism or collectivism paradigm as the basis for decisions and behaviors? prevailing hierarchical logic / or status of forces opposed to egalitarian ?; relationship management that follows the rules? ; time management? you avoid or tolerate uncertainty ?; prevails a communicative style of high or low context ?; is more important than the harmony or direct confrontation and clarification ?; to behave in a more formal or informal?

Example 2

- In Arab countries sometimes presents the decision maker with billionaire clothes completely informal, and the European imprint, you would tend to think it’s a server, but it’s the key man; a wrong attitude during the approach precludes further the next step, you even get to talk business, it crashes before;

Example 3

- Countries middle east with the prevailing collectivist culture; the decision maker often does not show up immediately, it remains in the shadows, and initially it is necessary to have a large share in the team; if by our approach prevails direct, confrontational and focused on the business, ignoring the vital needs of the other party to know, first of all from a personal point of view, (our family, our habits, who we are, what we do, how we do it, maybe the restaurant in front of local dishes), there will never argue with the person who decides.