Taking advantage of export opportunities

Taking Advantage of Export Opportunities

Kent Bank, President of Minneapolis Washer and Stamping, Inc., Minnesota, received his B.S. in marketing from the University of Colorado School of Business. He was an advertising executive who took over the family metal stamping business when his father became ill. He is active in the American Metal Stamping Association and was the second youngest executive to hold the position of Chairman of the Board in the 40-year history of the trade association.

From modest beginnings in 1934 as a small stamping company with only three presses, Minneapolis Washer & Stamping, Inc. recently celebrated its 50th anniversary as a preeminent washer specialist. The company produces stampings from .001 to 1/4-inch thickness in a variety of materials. In addition to ferrous and nonferrous metals, it fabricates materials such as nylon, polyethylene, rubber, fiber, teflon, polypropylene, phenolics, delrin and neoprene.

The company's introduction to exporting was unique and its domestic customers provided the opportunity. Several customers established offshore facilities to manufacture products that required the washers made by Minneapolis Washer & Stamping, Inc. The purchasing functions for the offshore facilities were retained by the domestic managers and they, of course, continued to use their established suppliers. As the supplier for customers with successful offshore facilities, its export sales increased as the foreign operations of its customers expanded in productivity and sales. The company started shipping to Canada and the Caribbean, followed quickly by Europe and the Pacific Basin. The initial results of the new export sales were impressive.

The problems associated with international marketing surfaced quickly. With the dramatic increase in offshore activities, foreign operations become more and more autonomous. The managers of the company soon found that they were not prepared to compete in the international marketplace. They realized that they had taken the export business for granted. They had enjoyed the business that resulted from the offshore expansion of customers, but had lost their initial advantage, having failed to establish a base in their foreign markets. They lost their advantage because they did not market their products with the international managers who eventually received authority to manage their own purchasing functions. In addition, the managers of the company did not develop new accounts in the countries where they already exported their products. Bank recalls, "since washers and small stampings are a relatively mature product in a highly competitive market, we soon found ourselves experiencing a decrease in business, as foreign vendors started competing for our share of the market.'

The company found itself in a position faced by many small firms in this country. Should it fight for a larger share of the domestic market or should it attempt to generate international business? The company's managers decided to do both. Since they felt they lacked the funds and experience to move forward, they decided to present their problem to the U.S. Department of Commerce. When Bank met with Commerce officials, he wanted to identify markets currently using his products and to determine the competitive pricing structure in those countries. In addition, he needed to identify distribution channels and sales representatives. He felt that answers to those questions would eliminate most of his concerns. Bank stated, "Many small businesses are concerned with the mechanical functions of exporting, such as preparation of documents, shipping and financing. We rely on our freight forwarders and bankers to handle these functions. It is our opinion that identifying markets and learning to sell internationally are our biggest problems.'

The Department of Commerce agreed to identify markets for some of the more discrete products manufactured and sold by small businesses. A pilot project was initiated, with statistical analysis to be provided by the Office of Trade Information Services and followed up with "comparison shopping' of the targeted country's pricing structure by the U.S. and Foreign Commercial Service posts. Bank is hopeful that the current pilot project will assist his sector of the manufacturing base in this country to compete internationally.

According to Bank, "The backbone of this country is a myriad of small business. Small businesses do not deal in huge quantities or millions of dollars on each sale. They do provide a variety of products and services to a vast array of customers, both large and small. They have become very adept at selling in the U.S. market and must learn to sell and compete internationally. A strong dollar is only one of many outside influences that may dictate a course of action. There are events that one must learn to orchestrate in international marketing. We look forward to developing a successful export policy by "design' rather than by "default.'

COPYRIGHT 1985 U.S. Government Printing Office
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