Archive for December, 2010

December 20th, 2010

World Café – an effective consulting tool for public organizations and business

In September, we held our first World Café, an innovative approach designed to fuel thinking and creativity within companies.

While this type of more approach is more commonly used in technology companies, we decided to apply it to more conventional sectors, i.e. a para-municipal organization in search of new ideas from traditional industries. And to my pleasant surprise, it worked!

We invited manufacturing, life sciences and IT firms to get together to discuss four issues. To give you an idea of how you can get a discussion going, here are the questions that we asked:

  1. Do BRIC countries represent a threat or an opportunity? Why?
  2. According to your understanding of the global economy, how can companies succeed in the next two years?
  3. What support can the International Business Centre offer to help you increase your sales abroad?
  4. Would you like to benefit from the experience of other Laval firms active in the global market place?

The end result was that the companies involved liked the formula and enjoyed the discussion. For our part, we learned more about them so that we can now adapt our service offer to their changing reality.

So, if you’re looking to develop new ideas with your team and build closer ties with your customers and partners,  I strongly recommend that you try this approach. In today’s economy, companies and organizations like ours have no choice but to re-invent themselves.

Lastly thank you to Pyxis for having shared this approach with us!

Véronique Proulx

December 14th, 2010

Tips to do business with big box stores in the U. S.

For Quebec SMEs, doing business with big box stores buyers could be a dream and be synonymous with making money. Unfortunately, it can also be synonymous of bankruptcy if all the preliminary planning isn’t done before dealing with them. During the last year I accompanied some Laval representatives in their individual meetings with buyers from hardware stores in the U.S. You will find some of my observations and recommendations below.

Price strategy

The buyers work with providers from all over the world and their main criterion to select a new provider is cost. This is why some buy up to 50% of their supplies from China. It is really hard for Quebec companies to be price competitive especially for mass market products. I have seen many business meetings start with the question: What is the cost for your products delivered to our warehouse? If your price doesn’t fit within their price range, they will lose interest even if your products are of better quality.

When they do a product line review, for example, they will ask all the potential providers to exhibit in their showroom, then buyers walk around and ask you questions about pricing. So be prepared to answer and have competitive prices!

Delivery policies

When you negotiate a contract with them, they will give you a specific time schedule for delivery. If you don’t respect the lead time, expect to pay a penalty. This is why you should know how to file documentation in order to avoid any trouble at the U.S. border.

Buy-back policy

During the line review, the big box stores may decide to replace the actual product with yours. Some hardware stores don’t have a buy-back policy and may ask you to buy your competitor’s product in order for you to do business with them.

Defect product policy

When you negotiate your contract with big box stores be aware of the future consequences of the option you take for any defective products. It could result in diminishing your profit. Remember, when you do business with them, you will have to lower your profit margin, accepting to sell large quantities but loose on margins.

They will not sell your products for you!

Vendors don’t have time to sell your product so it must come with a marketing program in order to facilitate its penetration. Pay particular attention to your packaging as it should be clear and self-explanatory. I suggest that you come up with a selling strategy that will help them sell your product. Keep in mind that some stores don’t have vendor training available. So, they are ill-equipped to inform customers about your product. Be really creative with your selling strategy and allow your budget to include this necessary cost. It will pay in the long run.

In conclusion, doing business with those big box stores is not for all SMEs. You need to be well prepared for your first meeting, making sure you have the production capacity and the transport logistic for delivery in place. Should you need more information on how to do business with hardware stores in the U.S., do not hesitate to contact me.

Caroline Bouchard

December 13th, 2010

An update on the Canada-EU free trade talks

According to European Union (EU) statistics, the value of bilateral trade in goods and services amounted € 58.7 billion in 2009. While Canada imports more goods and services than it exports, the EU nonetheless is the second largest export market outside the U.S. for both Quebec and Canada. Still, besides the geographical distance, there are numerous tariff and non-tariff barriers curbing Canada-EU trade, which is still just a fraction of Canada’s trade volume with the U.S.

At a time when the U.S. recession and the strong dollar is causing Canadian entrepreneurs to increasingly look towards less traditional export markets, reinforcing trade with Europe can only be good for Quebec and Canada. For example, according to a Canada-EU joint study, the impact of removing readily-quantifiable factors affecting bilateral trade would create some C$12 billion in direct spinoffs for Canada.

During a conference organized on November 10 by IE Canada, the Canadian Association of Importers and Exporters, I had the chance to find out how the Canada-EU free trade talks are progressing. In fact, one of the keynote speakers was Me Pierre-Marc Johnson, head negotiator for the Quebec government in talks with the EU.

While several points are rather complex and sensitive, such as issues concerning product certification, labour mobility, supply management and agriculture, negotiations are moving quickly and easily. Both parties have submitted their requests and are working on reaching an amicable agreement on each point to avoid any surprises when their reciprocal offers are filed officially. In this sense,  90% of the tariffs have already been negotiated and all the parties agree that the talks are on track for completion by the end of 2011.

Quebec SMEs stand to benefit from the implementation of such an agreement over the next few years. In addition, since the agreement’s implementation will likely coincide with the European economic recovery, it will be that much easier for companies to tap into the resulting opportunities. Keep a close eye on Europe over the next few years and feel free to let us know about your projects. While barriers will ultimately be relaxed, Europe is still a huge, highly complex and diversified market where you need a lot of resources and a solid strategy to succeed. We would be most pleased to help you in this regard.

By Bruno Séguin

December 9th, 2010

The importance of intellectual property in the international marketplace

I recently attended an interesting presentation on the role of intellectual property when breaking into a new market. The talk was given by Me Neil Milton of Miltons IP, a law firm specializing in intellectual property. I’d like to share some of my takeaways with you.

Mr Milton began by saying that intellectual property should be looked at as a two-fold tool because it allows you to avoid losing money by preventing theft, copying and other violations and to generate income by facilitating exporting and the attainment of other business objectives. The second aspect is interesting because we sometimes overlook the fact that it gives a monetary value to an invention or know-how.

By registering a patent, trademark or copyright before breaking into a new market, you are protecting your intellectual property rights and therefore making sure no one uses them other than you. For example, if you neglect to register your trademark on a new market, you’re taking the chance that a competitor or even your distributor or local partner will do so locally. In so doing, they can then market your product under this trademark, preventing you from using it yourself or forcing you to work exclusively with them, in the case of a distributor.

Before venturing into a new market, it is vital that you conduct a thorough trademark, patent and copyright search to make sure your intellectual property does not already belong to someone else locally. A good place to start is the World Intellectual Property Organization site but since intellectual property is a local matter, the search needs to be done country by country.

While it’s important to legally register your intellectual property on a new market, Me Milton also says that in a new market, you absolutely must set up a control system without resorting to the courts. This should be done as soon as you decide to export. For instance, licensing and/or distribution agreements should be ironclad in order to give you legal recourse. Non-disclosure agreements must also be very detailed and contain unambiguous clauses on the procedure should negotiations stall before a genuine business relationship begins. You must also not hesitate to use non-contractual means to prevent a third party from holding on to or using intellectual property, even if the business relationship is severed. For example, it is sometimes preferable to give secure access to a server than to send critical information by e-mail.

To find out more, listen to Me Milton’s presentation on EDC. Registration is free. In his talk, Me Milton goes into detail about interesting topics such as intellectual property on the Internet and in China. I also strongly recommend consulting a lawyer with expertise in international law and intellectual property before exporting abroad because even a single mistake can be very costly. Feel free to contact us for referrals.

Bruno Séguin