July 26th, 2010

Exportation, Strategies

Strategic summer reading

Here is some suggesting summer reading on Québec’s and Canada’s performance in the international marketplace.

1)      Adapting to a strong Canadian dollar

EDC has just published a white paper titled Adapting to a Strong Canadian Dollar aimed at suggesting strategies that exporters can use to increase their international competitiveness despite a strong dollar.

While the Canadian dollar fell after the U.S. financial crisis and stayed below US85 cents between fall 2008 and spring 2009, it has since risen sharply and EDC expects that it will stay at around US90 cents until 2012. Even if the dollar were to remain below parity, providing Canadian exporters with a slight edge, the loonie’s rise since 2003 has eroded their competitiveness in U.S. and foreign markets.

In this regard, EDC presents the key strategies adopted by Canadian exporters in order to thrive despite the high Canadian dollar, namely, market diversification and innovation.

2)      2010-2103 Que?bec Research and Innovation Strategy (QRIS)

In the same vein, the ministère du Développement économique, de l’Innovation et de l’Exportation has just published its 2010-2013 Québec Research and Innovation Strategy, which places innovation at the forefront of Québec’s economic development. The QRIS focuses on four key areas of intervention:

More competitive research recognized internationally;
A more creative, enterprising population;
Enhanced productivity and competitiveness through innovation;
Major developmental projects.

The “enhanced productivity and competitiveness through innovation” component is of particular interest to us because it focuses on international commercialization. In fact, two new measures are being implemented, one devoted to low-carbon footprint products and the other to commercialization plans for technological innovation. Over 30 innovation commercialization projects are planned between and 2013. It will be interesting to see how these measures are implemented. Please consult the directory of financial assistance sources to stay informed about the different programs available to Laval exporters.

What’s also interesting is that measures pertaining to technical validation and technology showcases will be relaxed.  The technology showcase component of the Business Assistance Program (BAP) is especially relevant for businesses seeking to export a technology as it will now be easier for these innovators to penetrate international markets.

3)      Québec in the world

If you like statistics, the Institut de la Statistique du Québec has just published Le Québec dans le monde, available free of charge. It compiles the most current economic indicators on 235 countries and territories, broken down into four main sections:

A summary placing Québec in the world;
Tables comparing the 235 countries and territories based on 95 economic indicators;
235 profiles of countries and territories, providing economic profiles using these same 95 indicators;
Maps of countries by continent.

We hope you enjoy the readings!

Bruno Séguin

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July 8th, 2010

Exportation

EDC’S 2010 export forecast

Each spring, Export Development Canada (EDC) publishes its Global Export Forecast for the year ahead. EDC’s vice-president and chief economist, Peter G. Hall, then embarks on a nationwide tour, presenting the analysis at always well-attended luncheon conferences. This forecast has become a reference in Canadian international trade and a highly useful tool for those involved in international business development, helping them set priorities and plan their activities for the year.

The following are a few highlights that could be of interest to Laval SME leaders:

-         EDC predicts global growth of 3.7% in 2010, a huge improvement from the 1.1% recorded last year. Still, EDC refuses to call it a recovery given the many risks still threatening the world economy, for instance, the maturation of huge stimulus measures, instability on the financial and commodity markets, fear of inflation, and a potential new wave of protectionism.

-         Within NAFTA, Mexico is expected to post the strongest GDP growth, projected at 3.5% in 2010 and 4% in 2011. Globally, BRIC countries (Brazil, Russia, India China) will dominate, with China and India leading the way. Solid gains are also expected in Southeast Asia and Sub-Saharan Africa.

-         After a tough year in 2009, Canadian merchandise exports should rebound to the tune of 13% this year.  Québec exports are projected to increase 9% in 2010, placing it seventh among the Canadian provinces.

-         The EDC predicts a 22% jump in Canadian merchandise exports to Brazil, the sharpest growth among the principal trading countries. Last year, exports to Brazil represented a mere 0.4% all Canadian merchandise exports and had tumbled 41.4% from 2008. What this means is that Canadian companies would do well to establish stronger business ties with this now indispensable market.

-         U.S.-bound exports should also improve, picking up 14%. Given the relative importance of this market (75%) for Canadian exporters, this bit of news is encouraging.

-         As regards industries, exports will increase mostly in energy, commodities, and vehicles and auto parts. Aeronautics, the only sector where exports grew last year, and agrifood, will be the only two with negative growth in 2010.

After reading this analysis, I noticed that the activities we have planned for 2010 fit in well with these forecasts. In fact, we just recently returned from a very successful mission to Mexico and are in the process of organizing others for the fall, namely to China and Brazil. We will also be very proactive on the U.S. market, which is still the number one destination for most Laval exports. When you return from vacation, make sure to check out our fall program – it’s packed with activities!

You can read the Global Export Forecast on the EDC Web site.

Bruno Séguin

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June 11th, 2010

Exportation

Doing business in Mexico requires an understanding of its cultural subtleties

Based on what I saw during our last trade mission to Mexico, here are a few tips to help you understand Mexican culture.

Meet your potential partner in Mexico, it’s worth the trip!

If you want to do business in Mexico, you have to understand that Mexicans only negotiate with people they trust. So you absolutely must meet your potential customer in person and win him over. For example, at a cocktail held at the Quebec House in Mexico City, one of the mission participants had a chance to talk to a potential customer before the next day’s meeting, allowing him to begin establishing trust. The next day, the participant was warmly received by the company and introduced to its employees. Negotiations will continue when the potential customer visits Quebec this month.

The challenge of confirming appointments in Mexico

Managing a successful business trip to Mexico is no small feat. Mexican entrepreneurs often wait until the very last minute to confirm a meeting. I therefore strongly recommend that you have someone in Mexico who can help you plan your stay and meetings.

First impressions are everything

In Mexico, as in many other Latin American countries, first impressions are very important. For example, formal business attire is a must. For more information, visit the Executive Planet Web site.

Punctuality

Punctuality is not always a priority in Mexican business culture. That said, a Mexican businessman will expect his future foreign partner to be on time. But when it comes to social events, arriving 30 minutes late is the norm. For example, during our mission, the general Quebec delegation organized a cocktail from 7:00 p.m. to 9:00 p.m. but most of the Mexican guests didn’t show up until 8:00 p.m.

The meaning of mañana

It’s important to understand the subtleties of the word mañana. Mexicans don’t like to disappoint by saying no. So instead, they will use the word mañana to mean later, in the near future, or simply no. But be careful, because “no” may mean “no” (to us) but it can also mean maybe or we’ll see. It’s therefore important for Quebecers not to take this word literally.

Finally, as they say, when in Rome, do as the Romans do. If you need advice on doing business in Mexico, please don’t hesitate to give us a call.

Caroline Bouchard

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June 10th, 2010

Exportation, Strategies

Have you done a follow-up?

I’ve been going on trade missions with Laval businesses for the past two years. Unfortunately, I’ve noticed that all too often companies either don’t follow up or do so too late. This means that the efforts made before and during the mission to identify the best potential customers will go largely unrewarded.

Here are a few tips to help you plan your follow-up.

Before leaving:

Set clear objectives about what you’re looking for in this market;
Do your homework on this market so you can ask pertinent questions;
Determine what information could be useful for you or a member of your organization;
Write this information down in an easy-to-refer format for your meetings;
Prepare a follow-up plan;
Plan free time during your stay for unscheduled meetings.

During the event:

Invite the most promising prospects to a second meeting or a business meal;
Take notes during and after each meeting;
Decide on the follow-up to do with potential customers using the document you prepared before leaving.

After the event:

Analyze all the data you collected, enter relevant information in your customer database, and do everything set out in your follow-up plan:

If you won’t be doing the follow-up yourself, send the necessary information to the person who will;
Within a week, send a personalized e-mail to all your prospects explaining the next step you will be taking;
Set a post follow-up schedule;
Within two weeks, prepare a summary of the event for your team, determine the benefits, and make recommendations regarding another mission;
Periodically review your event summary (ideally every six months) to make sure that everything is being done to achieve your objectives.

Lastly, feel free to contact us. We can help your prepare your business trips abroad to maximize your chances of success.

Caroline Bouchard

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June 4th, 2010

Supply chain

Are you conducting logistics and supply chain intelligence?

Not long ago I attended the Global Supply Chain Summit, a conference held during the international business convention for the aerospace industry (Aéromart). A number of speakers and managers of large aerospace firms talked about the emergence of a global supply and logistics chain and the importance of becoming a part of it.

Here are some interesting facts I picked up at this conference:

The phenomenal development of the Asian economy, and particularly, China, is simply a return of the pendulum.

By 2020, China will have built the equivalent of Canada:

More than 96 airports and 30,000 km of rail will be built, compared to 26 airports and 46,888 km currently in Canada;
There will be 220 cities with over 1 million inhabitants.

Nine out of ten manufacturers of mobile construction equipment already have a presence in China.

In 2020, there will be more cars in China (25 million) than in the U.S. (17 million).

Most intellectual property litigation is between Chinese companies and not between Chinese and foreign firms.

R&D spending has grown by 142% and the number of R&D centres has increased by 37%.

20% of Chinese living abroad are found in Canada.

A growing number of major order givers are setting up operations on Chinese soil. It is therefore essential to follow your customers in order to serve them properly and hold onto your market share.

Lastly, there are three main reasons why you should consider this market:

Relatively lower costs and increasingly advanced skills;
Market size;
Volume of public and private investment.

Business owners have a fiduciary responsibility to conduct supply chain intelligence. You must understand the issues and make sure to have a plan for adapting to the anticipated changes. The preceding list is an example of some of the things you should be considering in your reflection.

Samir Naoum

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