International Business Development - a role for industry associations

Ed Marsh | Jun 18, 2012

Tradition and Success

Everyone's got a couple of those "Geez, I really wonder why?" questions.  I have mine - and one which has had me stewing is why American agriculture seems to be so much more successful exporting than its manufacturing and service counterparts.  I figured that if it was possible to understand the factors which contribute to that success, then perhaps those could be applied in support of international business development for various industries.

Now I'm not saying "If they can figure it out, anyone can."  I recognize fully the incredible technical complexity of large scale agriculture, and the amazing science which mixes with business acumen to create success from the soil - and to feed the world.

Sell it before it rots

My simplistic assumption had been that necessity contributed to the success.  Unlike widgets which must be manufactured, and have some shelf-life prior to obsolescence, once a crop is planted it must be harvested and sold, or wasted.

Certainly that's a pretty powerful incentive to ensure that you are selling every bit that you can produce.  And the price sensitivity and fluctuations contribute to the urgency and need to forecast properly.

Maybe we can somehow simulate that urgency among manufacturers.

But that can't be the only explanation...

Trade organizations

I asked a former USDA Foreign Agriculture Service employee during a recent conversation.  His take?  Trade organizations in the agriculture sector have taken the lead in developing export and supporting the efforts of their members.  Overseas offices, grant programs and marketing/outreach (to farmers and to overseas markets) are often undertaken by the groups.  The farmers aren't just told to go find buyers.  trade organizations can help drive international business development for american industry

There is strong support (one great example - Western US Agricultural Trade Association (WUSATA.org) offers a "Branded Program" which reimburses up to 50% of export marketing activities) and a long-term commitment (an interesting example of one very small niche - 10 years of negotiations recently opened up the Western Australian market for American cherries.  (worth clicking the link just to see the photo!))

Lessons to learn?

What can industrial and service sector trade organizations replicate in support of their constituents' international sales?  The bottom line is a robust support infrastructure - rather than just periodic mentions.

One worthwhile example is the Packaging Machinery Manufacturers' Institute.  A vibrant program which has been in place for a number of years, with dedicated staff domestically and overseas, and various resources and research has paid dividends.  Through the efforts of @pmmiorg US packaging machine exports grew by 11% in 2011, and include some notable successes like Delkor which grew from 26% international sales in '10 to approximately 50% in '11!

Let's go

Certainly PMMI isn't alone.  There are lots of robust industry efforts.  But are industrial trade organizations as effective as agriculture?  The numbers seem to indicate not.  Let's get more effective.

If you are a manufacturer interested in seeing a more robust program from your trade organization(s) contact us and introduce us.  Consilium Global Business Advisors can help you with your international business development, but also help your organization structure a strong program.

Interested in learning more about other aspects of exporting?  Have you considered the importance of demographics or government relations?  Download our free eBooks to learn more.

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