Lost in translation – that’s where Paul D’Alberto found himself during a business trip to China. The director of International Development for The Vollrath Company thought a “bonded warehouse” would be a place where goods that require duty payments would be deposited until they were cleared for export. But no…
Training language-specialized employees and hiring interpreters for business meetings are just a few of the adjustments a New North business may need to make before entering international markets. However, businesses that choose to go international find that the benefits reaped from the expansion far outweigh the costs.
In D’Alberto’s case, differences in language that occurred during translation made communication difficult.
“The reality of what they meant was not known until we decided to try to make changes to product inside the warehouse, such as breaking case lots or modifying product,” D’Alberto says. “We suddenly found their meaning for familiar terms to us was quite different.”
Since 1985, the Sheboygan-based Vollrath, a food service equipment manufacturer and distributer, has been expanding internationally, starting in the United Kingdom and subsequently opening branches of operation in Latin America, France, China, and most recently in Rijen, Netherlands.
Not only can companies like Vollrath benefit from additional sales, but as Paul D’Alberto explains, “international expansion gives us an idea of what is transpiring globally.” From taking business into new markets, companies like Vollrath have been able to adapt to international trends in product design, and thereby better prepare themselves domestically to compete overseas.
To move divisions of the business or products internationally, companies must adjust to local markets. Trade restrictions are a big factor in determining whether a business can be set up. These restrictions vary, but can often include regulations on equipment imports as in Mexico, or the need for electrical certification of all equipment, such as in China.
For businesses working in manufacturing and product distribution, expanding the business internationally can often mean changing product offerings entirely. “Sometimes, the products need to be redesigned entirely to be operable in a market,” D’Alberto says.
When working in the European market, Vollrath found that the aluminum cookware the company sold in the United States would not sell in Europe. They had to create an entirely new line of stainless steel cookware, a product people would want to buy in that market.
When marketing a product overseas, companies must also be aware of language – the name of a product can have an impact on whether or not it will sell.
“I have seen a drink in Germany called Zit, diapers in Chile called Crappies, and the famous example of the Chevy Nova in Mexico (No va means does not go),” says D’Alberto.
In the United States, many companies get business because of their longstanding reputation for reliable products and services. However, when a company expands internationally, this relationship has to be built from the ground up.
Pierce Manufacturing, an Appleton-based fire truck manufacturer owned by Oshkosh Corp., has been exporting internationally for more than 35 years. Dawn Ruchala of Pierce suggests when entering new markets, “It’s about building a quality product, customer service and focusing on the end user.”
Pierce had support when working overseas; Oshkosh Corp. has offices around the world, including India, China, the UAE and Russia. To better their business strategy, however, Pierce modified its approach for working with international clientele. Pierce executives practiced increased cultural awareness and sensitivity and ensured they had employees with the ability to conduct business in a variety of languages and cultures.
When the Vollrath Company decided to expand to international markets, it began the process internally, hiring an export management company and bringing in new talent to manage the logistics of the business’ freight and documents.
But the most crucial piece, D’Alberto says, is investing in the location. Vollrath’s recent locations in the Netherlands, Mexico, and China provided not only financial gain, but also opportunities for job growth in those respective communities. Without this investment, “long-term, you can’t succeed; you can’t support the growth,” D’Alberto says.
Pierce, as an international exporter, believes in reaching out to its clients. In the United States, tools such as social networking, search engine optimization (SEO), and media-based advertisements help to boost a company’s visibility and sales. Pierce contends that this trend holds true internationally.
“You could argue even more so internationally with the heavy usage of website searching and the continuous growth of social networks,” Ruchala says. “We see a high percent of traffic on Piercemfg.com and our Facebook site coming from international audiences.”
Just last year, Pierce was contacted by BP’s Sullom Voe terminal in the Shetland Islands of Scotland. Workers at the Sullom Voe terminal needed fire trucks with robust pumping capacity, and after a quick Google search, they were linked with Pierce.
The success of Pierce’s and the Oshkosh Corp.’s international expansion is evident in the capital increases Oshkosh Corp. has seen. From 2010 to 2011, the company’s international sales grew from 10 percent to 17 percent. Oshkosh Corp. hopes for increased international ventures, setting a goal of 30 percent in international sales by the year 2016, which would provide them an estimated $1 billion in revenue.
Though operating internationally can be a challenge, for D’Alberto, “there’s no question if it’s worth it.”
Manitowoc delivers cranes to Tanzania
Recently, Manitowoc Cranes was dealt an interesting challenge: Deliver two Grove cranes to Zanzibar, Tanzania. Manitowoc received an order from the Zanzibar Port Corporation (ZPC) for a Grove YardBoss YB5518 industrial crane and a Grove RT880E rough-terrain crane, and was presented with the unique task of configuring shipping to unfamiliar territory.
The shipping process for a full-size crane alone can be difficult, and shipping them overseas, even more so. “In all, it took us three years to select the proper cranes, tender bids, establish financing and determine a suitable shipping route to bring the cranes to our port,” says Mustafa Jumbe, director general of ZPC.
Governmental regulations and the unique need of direct-to-port shipping made the process of delivering the cranes difficult. While configuring the delivery, Manitowoc was faced with some technical difficulties of doing business in Tanzania. A letter of credit from the local bank and fulfilling other government requirements took more than seven months for ZPC to acquire.
Furthermore, ZPC needed the cranes to be shipped directly to one of their ports. According to Jumbe, “The two cranes had to be shipped directly to Zanzibar’s port, bypassing mainland Tanzania. This made the whole process longer and more difficult.” But, says Jumbe, Manitowoc was prepared for the challenge. “Despite the unusual requirement, Manitowoc found a shipping route and delivered the cranes to us without a problem. … Manitowoc and TTD’99 (Manitowoc’s dealer in Tanzania) were with us every step of the way.”
Once regulations had been taken care of, the cranes took an 87-day journey from Baltimore to Zanzibar, finally reaching the main port on Unguja Island.
According to Manitowoc, ZPC plans to purchase more Grove cranes as its operations expand.
Making the connections
For companies that have little experience working internationally, the task of international expansion can be daunting. But resources are available at the state, national and international level that can aid businesses in this transition. At the state level, local departments of commerce have contacts in international markets, and contacts in Wisconsin companies that work internationally.
At the state and national level, involvement in trade associations is a valuable resource that provides information along with business contacts. Major trade groups such as the World Trade Center Wisconsin and the Northern Wisconsin International Trade Association include a number of successful Wisconsin-based companies working internationally.
And, at the international level, contacting the U.S. Embassy in a specific country can be a helpful resource. Cultural attachés in each embassy are available to send current market data on potential business locations. For more information:
U.S. Embassy Mexico:
Tel: 011 (52-55) 5080-2000
Email: [email protected]
U.S. Embassy China (Beijing):
Tel: 011 (86-10) 8531-3557
Email: [email protected]
Lakeshore International Networking & Knowledge exchange (LINKe)
Ms. Rebekah Kubista, Coordinator
Lakeshore Technical College
Tel: (920) 693-1651
Email: r[email protected]
Northern Wisconsin International Trade Association (NWITA)
University of Wisconsin-Eau Claire
Management And Marketing
Eau Claire WI 54702
Tel: (715) 836-3053
Email: [email protected]