Sarah Stuart: How to take a Kiwi company international

Photo / AP

Opinion

We were to spend 10 weeks working with a New Zealand company on a 100-page report and presentation that answered a single, clear, strategic question.

For my group of four it was: "what is the best way to enter the US market?"

Our client was a manufacturer so successful in this country, the owner choppered to work each day from his Coromandel beach house. He'd taken the "Beach, bach and BMW" success measurement that so many New Zealand business owners see as their end-goal, and raised it by a helicopter.

Now, a new voice in the company was keen to take the product to the US - and we were to advise on the best way. My first step? Googling what a "die-cast" was. Ahhh, so that's how you make stuff in a foundry.

Strategy has been my favourite subject of the MBA thus far. For one semester late last year, we learned how to apply a multitude of varying frameworks to the stickiest of issues: who is my competitor really? Where should I be focusing my efforts for the greatest return? Who really holds power in this industry and how can I use that? Who is my customer? What forces are shaping this industry into the future?

The lecturer, Professor Daniel Vidal, is an Argentinian-born management consultant who has worked for Deloitte among others and now runs his own consultancy. He abhors "gut feel" as strategy. He likes rigorous analysis. Real data. He loathes marketing-speak. He advocates choosing a framework - or several - for analysis, populating them with as much information as available, and then searching for the answers within.

For our business development project, this meant weeks of studying potential internationalisation methods, researching what the market was and where it is at, looking for networks that might get us there and seeking insights our client might otherwise take months or years to find.

For 10 weeks we lived and breathed the project. It was estimated it would take 300 hours to complete: we thought that was collective. We were wrong - tough for those juggling families and full-time work as well.

I spoke to several New Zealand manufacturers successfully exporting their goods to the US. Key lessons? Don't go for the big cities first. The second-tier cities will love you more.

Being a New Zealander will get you in the door for a meeting, but longer-term, Americans like dealing with Americans. Estimate the time and investment required to get there - then triple it. Whether you opt for direct export, a distribution partner or manufacture and sales in the US yourself, whatever money you don't spend upfront, you will spend later, taking back control of your sales and distribution channels.
I rang the direct competitors of our client, looking for information on their business and future plans. Americans, it seems, will tell you almost anything, especially if you have an accent.

A regional product manager told me exactly which projects and key staff he was targeting to grow their business. Another was happy to share the pitfalls of their own product. Receptionists are a font of knowledge. Sales managers love nothing more than telling you how they get their business and what they'll do next.

After 10 weeks we presented to a panel of experts: our client plus senior faculty and three entrepreneurs or business growth specialists. We were grilled on the findings and our financial models picked over and debated.

Result? I not only know what die-casts are, I have an informed opinion on how best the client should deploy them. That wasn't all I learned though.

Strategic analysis, combined with insightful research, connections and good financial modelling can help make better decisions on where and how a Kiwi company should internationalise.

That's one thing. Then you need time, money and persistence. Following through takes business balls bigger than most.