Exporting Your Services
Choosing an Entry Strategy
Service exporters have a number of alternatives for market entry, ranging from supplying services to foreigners in Canada to establishing a local presence abroad. The following seven questions and answers provide tips for your decision making process:
What is the best way to enter a foreign market?
How can I export my services in Canada?
How can I enter a market virtually?
How can I use existing customers to open export markets?
How can I use subcontracting to open export markets?
How can I use staff to open export markets?
How can I maximize my profitability?
What is the best way to enter a foreign market?
You usually have several strategic choices as an exporter:
- Export initially to foreigners in Canada
One of the easiest ways to enter a new market is to sell your services to a respected foreigner doing business in Canada and get them to refer you to colleagues in the target market. - Export entirely through a “virtual” presence online
As doing business through internet becomes more widely accepted, you may find this option increasingly attractive. Some service exporters have met their customers exclusively through internet. - 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. - Establish a local office on your own
If you have a unique or well-known service, you may 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, or a subcontractor to, a well-known local firm.
How can I export my services in Canada?
By reviewing your current domestic customers, you may find that some of them are nationals of other countries. In this case, you are already exporting in Canada! Remember that exporting services involves sales to foreigners regardless of location. To develop export activity in Canada, you need to identify foreign-owned firms or individuals traveling to Canada that could become your customers. Or you may be able to develop a service (e.g., executive training) that attracts foreigners to your firm in Canada.
How can I enter a market virtually?
By establishing an online presence, you are automatically open for business to customers in foreign markets. But that doesn’t mean potential customers in a particular market are aware of your virtual presence. You will need to identify the best e-marketplaces in which to create a presence.
Even if you only have e-mail and no corporate website, you can participate in e-procurement opportunities online through appropriate e-marketplaces.
How can I use existing customers to open export markets?
Existing satisfied customers in Canada or in foreign markets can be helpful to your export efforts by providing:
- Referrals to persons they know in your target market.
- Testimonials regarding your services.
If they are familiar with your target market, they may also be able to give you ideas about how to customize your service in order to address cultural issues.
How can I use subcontracting to open export markets?
If you are new to exporting and want to gain experience and contacts, consider subcontracting to an experienced Canadian exporter. While this is not exactly exporting (since you are not being paid by a foreign customer), it can be valuable by providing you with access to a market and developing a network of contacts abroad.
Another good reason to subcontract is to assist you in getting involved in internationally-financed development projects. Acquiring such contracts typically involves a long bidding process and substantial resources. By associating yourself with an experienced and successful prime contractor, you can gain experience and visibility abroad as well as have opportunities to network with other donor agencies while doing paid work.
How can I use staff to open export markets?
One of the assets in the BC economy is our multi-cultural population. Take the time to inventory the networks of your current staff, and you may be pleasantly surprised at the wealth of connections you already have abroad. You can also deliberately recruit staff with connections in a particular target market. Depending on the skills and experience of the staff member, you may involve them only in planning and making contacts from Canada or also in traveling to the target market.
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 ensure you are positioned in a market in a way that allows you to charge enough to 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, it is least expensive if you can export a service without leaving your home base. In this case you have two options: (a) export “cross border” electronically, or (b) sell your services to foreigners who come to Canada.