Kiwi companies urged to think globally

Bridget Liddell says exporters need a network in their market. Picture / Paul Estcourt

Shifting the focus from merely delivering goods to overseas markets to a more boots-and-all approach will bring companies the greatest gains, says a New York-based businesswoman.

Bridget Liddell, who is one of the Guardians of the NZ Super Fund and on the advisory board of NZTE's Beachheads programme, said taking a more structured approach to overseas expansion would deliver New Zealand companies greater shareholder value.

Liddell called it a global mindset - thinking about business in the largest sense and treating overseas markets in the same manner as local operations.

"When we build our businesses here we develop a network around the business of bankers, service providers, supply chain customers, media. We're known, we build up this infrastructure. Then when we go offshore we often think about it as only a single-dimensional activity, which is selling product."

She said not developing a global mindset undersold the opportunity businesses had to build long-term value and a resilient business in a foreign market.

It also left companies exposed to the ups and downs in the marketplace.

Liddell has witnessed at first hand companies that have come adrift after relying excessively on distributors in overseas markets.

"That's not the way we do business here. It's not the way people do business there. You can't abdicate your responsibility for doing all those other things.

"If you just want to sell product, that is a strategy but it won't generate long-term shareholder value for you, it won't get you a transaction with a major player that will generate value for the shareholders."

She gives the example of merino clothing maker Icebreaker.

"This was not about selling merino products to third parties in the US and that was it. It was about a long-term business in the US that actually has a presence of its own, building its brand, building its profile, a very comprehensive definition of what it was trying to do. It didn't do it in five minutes."

For smaller companies the expense and effort required to commit to such an overseas strategy might be daunting but there were cost-effective options available.

To lower the overheads of overseas expansion, Liddell suggested using the internet and social networks to connect with customers in foreign markets and having partnerships to share supply chain costs.

But managing a successful overseas expansion was not possible from New Zealand, she said.

"You definitely have to spend, if not physically remove yourself, be there enough to be able to make those calls to action and adjust to the circumstances. Employing a salesperson and putting them up with no support is not a long-term strategy."

She said the leap to successful overseas expansion was on a par with the step of turning an idea into a business.

Liddell is involved in raising US$150 million ($191 million) for a venture capital fund focused on investments in the food and beverage sector.

She says the food industry is migrating to healthier products, which is opening up opportunities for New Zealand producers.

A portion of the fund has been earmarked for investments in New Zealand food and beverage companies.