AZIGG
Arizona
International Growth Group
AZIGG News
Valley Small Businesses Look to Go Global
By Jane Larson, July 2nd
The Arizona Republic
http://www.azcentral.com/business/articles/2008/07/02/20080702biz-sr-smallbiz0703-ON.html
There is more than one way for Valley small businesses to go global.
For Kyocera Solar Inc., it's importing solar technology from its Japanese parent company, integrating it with solar panels made at its Mexico factory, and selling the units in California, Texas and markets around the world.
For the Center of Modern Design, going global means importing fine furniture from Denmark and Italy and selling it to Scottsdale area homeowners.
For Succeed Corp., it's building a workforce of software developers in Mesa and the Ukraine and selling their Web-site-building products in the United States and soon in Europe.
Those were the experiences shared this month by three global entrepreneurs at a joint meeting of the Scottsdale Area Chamber of Commerce's First Friday Airpark Breakfast and the Arizona International Growth Group (
www.azigg.com).No matter how a company incorporates an international component, the panelists agreed, doing so brings more resources and brainpower to the business.
"I've learned we're a great country, but we don't know everything," said Tom Dyer, senior vice president of marketing and government affairs for Kyocera Solar. "Those other countries are great to live in, but they don't know everything, either. We all have a lot to learn from each other."
Arizona exports up
And although some sectors of the Arizona economy struggled, Arizona businesses that sell overseas saw their exports rise 4.9 percent in 2007, to $19.2 billion from $18.3 billion the year before.
Of the more than 4,500 Arizona businesses exporting, 88 percent were small firms with fewer than 500 employees, the Arizona Commerce Department reported this spring.
There are rewards as well as risks to going global, the panelists said. Among the rewards:
• Finding talent in a tight
market.
When Succeed Corporation® (
• Discovering innovative
products.
When Chris Jorgensen and his
wife tired of high-tech
corporate life, they decided to
start an e-commerce business in
Park City, Utah, marketing
high-end furniture from their
native Denmark. Today, some 30
percent of House of Copenhagen's
sales come from the Far East,
and interest is strong from
Australia. When it came time to
add a bricks-and-mortar design
center offering similar goods,
the Jorgensens picked Scottsdale
over San Francisco for the
demographics and hot growth rate
and opened their Center of
Modern Design in the Airpark.
• Taking advantage of
overseas growth.
While the U.S. economy is slowing down, other parts of the world are not. Going global allows companies to tap into other markets' upturns even though their own regions are struggling.
Sometimes domestic markets are too small to support a business. Jorgensen found that out with his previous startups in Denmark, which has a population of just 5.5 million.
"It's so small you can't depend on your own market. You have to go outside," he said. And so his previous firms started with other parts of Scandinavia, then expanded to Europe and then to the United States.
International risks
The panelists don't deny that
there are risks to international
moves. Among them:
• Strong foreign currencies
can make your products more
expensive.
Kyocera Solar and Center of
Modern Design aren't helped by
today's weak dollar, because it
takes U.S. customers more
dollars to pay for the imported
products. Succeed is watching
the rise of the euro and trying
to balance its growth plans
around the euro-dollar exchange
rate.
• Cultural differences.
When Dyer lived in
Singapore, he was impressed by
how residents referred to
themselves as Singaporean
regardless of their part in the
multiracial culture. When he
moved to Japan, he learned what
it was like to be treated as a
minority but still found ways to
succeed in business.
• The supply chain is
critical.
Shippers who deliver
expertly and internationally are
a key ingredient for the
Jorgensens' businesses.
Strategic partners whom Succeed
can trust are key to its
expansion in other markets,
Sayed said.
• Other nations' instability.
Another country's political or economic instability can be introduced into your business.
• Different legal systems.
Legal frameworks may be
quite different from those in
the United States.
Despite the risks, going global
makes sense to many.
"The more I travel, I realize we are very much connected to the global machine," Sayed said. "And if we are such a part of it, then why limit it? . . . It's not just a one-way street.".