globalEDGE Blog - By Author: Guest Blogger

This blog post is written by Cameron Levis

Over the past few centuries, the globalization of business and commerce has been happening rapidly. But in the past few years, and especially in 2020, the narrative is far different. With increasingly isolationist policies from the government of the United States, falling trust between the U.S. and other nations, and the coronavirus pandemic, 2020 has been a year in which globalization has decelerated for the first time in decades. It has been a year in which the international business environment is a more complex and tiresome world to explore than at any time in recent history.

In this blog, Melissa Kreger writes about the updated impacts of the coronavirus.

The coronavirus first outbroke in January and now has become a global health epidemic. The largest question that has been lingering for economists and large investors is, “How long will the Chinese economy be halted and how bad will it affect all economies”? The Chinese economy is the world’s second-largest economy, first behind that of the United States. China being at a halt will affect global supply chains and we are starting to see those repercussions now.

Helsinki attracts visitors by promising them a vibrant urban culture combined with pure nature. To support its positioning strategy as one of the most sustainable cities in the world, Helsinki has been addressing barriers to a sustainable lifestyle and making sure that the proposed benefits stand apart from those of competing cities. Across the globe, cities and communities are implementing sustainability initiatives and projects targeting greener infrastructure, economic development, zero-carbon mobility, and cultural recreation. But what makes some of these projects more likely to deliver impactful results in the long term? How can some of these initiatives help make communities more sustainable and resilient in the years to come?

Counterfeit goods today are found throughout the world; wherever a demand for a product exists, counterfeiters quickly fill the niche. Counterfeiters compete undetected with brand owners, undermine brand profitability, fund the underground economy, and undermine brand reputation. A brand’s long-term success depends on protecting its integrity. Brand owners who do not believe they have a counterfeiting problem likely have not looked. ANY branded product can be counterfeited.

Indonesia is a country where over 50% of the population is under the age of 30. It is a country where the GDP has maintained an annual growth rate of 5% - despite “regulatory slowdowns” that many on the ground here believe could add 2-3% to that figure. And it is a country where hiring an immigration services facilitator to obtain an entry visa and clear customs is advisable, lest the traveler incur their own “regulatory slowdown.”

A year ago, the mood in Singapore, if not quite jubilant, was highly optimistic. There was palpable energy around both the Trans Pacific Partnership (TPP) and the ASEAN Economic Community (AEC). The mood today is marked by uncertainty.

Manila is a relatively short plane ride from Singapore, but a world apart. In Singapore, as I reported last week, the ASEAN Economic Community (AEC) is the topic of the minute (even if some officials admit it’s “a lot of hope and not a whole lot of change, yet.”) In the Philippines, on the other hand, one high ranking government official estimated awareness of ASEAN at about seven percent in the general population and roughly 30 percent among businesses. He could not site any numbers for the AEC specifically.

Greetings from Singapore, where the talk in this city-state is centered squarely on the ASEAN Economic Community (AEC). The AEC came into being, officially, on December 31, 2015, and businesses are abuzz about the AEC's potential for growing the economies of the 10 member states.

Through a trade relationship that generated $ 1.2 billion exports in 2013, Canada is the largest importer of Michigan food and agricultural products. Michigan’s geographical location in combination with the strong trade partnership between the United States and Canada helps facilitate Michigan food and agriculture exports to Canada.

There is a world of opportunity for those seeking to export their food and agriculture products, considering that more than 70% of the world’s purchasing power is located outside of the United States. By tapping into these new markets before your domestic competitors, you will reap the benefits of having little to no competition, while possibly offsetting slow growth in your home market with the new increase in your company’s sales and profitability. Additionally, an enlarged customer base, as the result of expanding into foreign markets, can lead to your business hiring more employees and create economies of scale in production. Furthermore, diversifying the markets you sell to will help to mitigate the risk that often comes with expansion. For example, if your product sales tend to fluctuate seasonally, exporting can help to counterbalance drops in demand. Fortunately for companies seeking to export, the United States’ reputation for sound business practices and high quality goods appeals to foreign markets.

Michigan’s economy is reinforced by the global export market, with food and agriculture exports creating a $3.2 billion industry and supporting over 20,000 jobs. Exports of consumer food products are growing three times faster than sales in the United States due to foreign consumers’ growing purchasing power and lower trade barriers. Exporting is an essential way for Michigan companies to increase sales and profits by tapping into a far greater consumer market.

There are many widely known benefits to exhibiting at a tradeshow. You are able to market your product, network and, ideally, generate new business for your company. Unfortunately, however, tradeshows are notorious for being costly. As Forbes contributor, Brent Gleeson, put it, “planning and goal setting is critical to generating a positive ROI from your tradeshow investment." Food Export – Midwest’s Food Show PLUS! program helps companies to do just that. Through its various services, Food Show PLUS! ensures that major international tradeshows are utilized to their full potential by assisting companies in the areas of research, preparation and translation. It is also possible for companies to apply for the Branded Program which offers up to a 50% reimbursement for several expenses related to exhibiting at international tradeshows. If you are considering introducing your products to foreign markets, Food Show PLUS! can give you the tools you need to find success.

As South America’s largest market, Brazil is becoming a global player with increasing consumer expenditure. Between 2007 and 2012, Brazilian consumer spending on food and non-alcoholic beverages increased 71.4% due to an expanding middle class, according to Euromonitor. American food and agriculture exporters have the potential to tap into this growing market.

The international marketplace offers great opportunities to Michigan food companies who wish to increase sales. Worldwide, consumer food product exports are growing three times faster than U.S. sales. Though exporting can seem intimidating, Michigan food and agriculture companies can look to upcoming export assistance programs that are happening nearby in Grand Rapids and Canada as a way to enter export markets.

The Michigan Department of Agriculture and Rural Development’s (MDARD) International Marketing Program annually recognizes a leading food and agriculture exporter through its ‘Michigan Ag Exporter of the Year’ award to a deserving Michigan food or agriculture company. This special honor can bring further success, signaling to international buyers a company’s quality and commitment to exporting.

The Michigan Department of Agriculture and Rural Development (MDARD) is offering Michigan food companies multiple opportunities to exhibit within Michigan Pavilions at the Food Marketing Institute (FMI) Show and the National Restaurant Association (NRA) Show. The shows offer businesses a unique, helpful, and affordable way to showcase products under the Michigan name, known globally for outstanding quality. In previous years, over $600,000 in actual sales were reported with $3 million in anticipated sales!

It’s not too early to start planning for 2014! The 2014 year holds an extensive list of Food Export Association activities, programs, and services to help exporters of Michigan food and agricultural products begin or expand their international sales. They provide educational programs, export promotions, customized export assistance, market entry support, and a cost-share funding program. The 2014 Food Export Activity Calendar includes the dates, locations, and other details about buyers’ missions, seminars, focused trade missions, and more!

The Director of the Michigan Department of Agriculture & Rural Development, Jamie Clover-Adams, and the International Marketing Program traveled with Governor Snyder on a ten-day trade mission to China and Japan in September.

Exports continue to help grow and expand Michigan’s food and agriculture economy, while generating nearly $2.8 billion in economic activity with support from the nation’s second most diverse agriculture industry, strong public and private investment, and a diversified portfolio for food processing. Exports of consumer food products are growing three times faster than sales in the United States due to the foreign consumers’ growing purchasing power and lower trade barriers. Thus, exporting is vital to Michigan companies as an opportunity to increase sales and profits, as 95 percent of the world’s consumers live outside of the United States. Moreover, food and agriculture producers can reduce dependence on existing domestic markets, and off-set slow sales due to economic changes, demands, and cyclic fluctuations resulting in short and long-term security for Michigan.

The Director of the International Business Center at Michigan State University – Tomas Hult – just published the new version of the Total Global Strategy (TGS) book with George Yip. TGS has been the market leader both in multinational corporations’ board rooms and in executive MBA programs for years. From General Motors using the TGS framework to restructure their Asia operations to Michigan State University using it in its world-leading executive training programs in supply chain management to being rated as a top 30 business book previously, Total Global Strategy is the authority on practical and sophisticated global strategy development and implementation. TGS can be bought on Amazon and at all major booksellers.

Two weeks ago, the European Central Bank (ECB) raised its benchmark interest rate from 1 percent to 1.25 percent, putting it at odds with its counterparts in the United States and Britain. This move has sparked a debate as to whether the ECB jumped the gun with the interest rate hike.

When speaking with U.S. business leaders about global leadership and cultural intelligence, I’m often asked, “Is anyone talking to people in China and India about their need for this? After all, shouldn’t this be a two-way street?”

A best-kept secret is that domestic trade shows are great places to meet and sell to international buyers. U.S. businesses that have discovered this relatively low-cost channel for drumming up new sales claim that exhibiting at the “right” shows can fill their order books for the entire year.

The success of the National Export Initiative (NEI), which calls for the doubling of U.S. exports and adding millions of new jobs in 5 years, depends in part on the 265,000 plus U.S. exporters finding buyers in additional country markets. If an exporter is selling to Canada now, Mexico or Chile might be good places to expand. But how will the U.S. company know which market to choose?

China remains a robust destination for a gamut of businesses. The country offers a particular wealth of advantages for manufacturing companies. Often solely regarded as a region for inexpensive labor, China also offers an increasingly sophisticated range of manufacturers and workers. Today, China accommodates the entire span between high quality manufacturing needs and orders for manufactured commodity goods. For most global companies, perhaps the most important benefit of establishing a presence in China is the fuller access into the Chinese market that this provides. But what is the best way to navigate business operations in China?

First, is your Website ready for prime time?  Consider adding a section for international buyers which might contain a currency calculator, shipping options and prices, a statement about the buyer paying for customs duties and taxes, and even sample duty and tax calculations using your most common commodity classification codes (call 1-800-usa-trade for assistance with this).  This is purely good customer service and will reduce misunderstandings across the miles.

The plan, in addition to some reasonable sales projections and a statement of how your product or service is positioned for international buyers, should single out from three to five markets to focus on.  The markets can be selected by an analysis of secondary research information or by looking at where previous inquiries or sales have come from.

A recent Department of Commerce study of midsize and smaller U.S. manufacturing exporters made a surprising finding: the majority of the companies surveyed don’t have an export plan.  What’s more, they lack international financial goals and, in general, lack staff who are dedicated to growing the international side of the business.  In addition, exporters rely mainly on U.S.-based sales efforts to generate overseas customers, and fully one-third sit back passively and let the orders come to them.

Since 2000, I have studied how companies localize their web sites for the world's Internet users. In the early days, a company would have been content with half a dozen languages and little in the way of cultural or product-specific localization.

Today, however, web globalization is serious business. Companies such as Google, eBay, and HP generate more than half of their revenues outside of the United States and web globalization plays a fundamental role.