Internationalization. Why? How? What?
At the latest Morning Glory, Gregor Leitner, Head of Außenwirtschaft Tirol, talked about everything you need to know about internationalization. Read about the key learnings in this interview.
50% of the gross domestic product in Austria comes from the export industry and every other job is directly or indirectly associated with it. Could you sum up the most important numbers to illustrate this information?
Austria exported goods for € 150 billion worldwide in 2018. Austria ranks 7th in the global ranking of per-capita exports.
When would you speak of internationalization?
Internationalization means that a company conducts business activities (export, import, investment abroad) outside of Austria.
What are the main reasons for internationalization & when do entrepreneurs know that it is time to think about it?
There can be different reasons depending on the company situation. Very often, the main reason is that the domestic market is too small - especially if you offer a niche product / niche service. Internationalization does not necessarily mean that you have to go far to sell your products / services. A step into the direct neighborhood can already be interesting - for example, Bavaria is almost 20 times as big as Tyrol and can already be an interesting market because of its size. Other reasons for internationalization may include risk diversification or higher prices that can be achieved in a foreign market.
What are typical mistakes and challenges that you usually recognize in the internationalization process of young companies?
The main mistake often is that the internationalization is not or not well enough prepared. The appropriate planning helps to avoid unexpected costs and “empty kilometers”. The export business can be seen as an extreme case of a normal domestic business. The strategic approach and the professional planning of market development, which are basically necessary also in the domestic business, but are often replaced by the intuition of the entrepreneur, are inevitable in a new market. The greater number of unknown parameters and the resulting greater complexity in the unknown market make planning and strategic preparation necessary.
So it’s better to plan internationalization early. You talked about 7 simple questions - could you sum them up once again?
The 7 questions (what - where - who - with which - how - when - how much) help to structure the preparation for internationalization. Of course, you can also use other instruments. The overall aim is to fundamentally think about your own company situation and the goals and steps of internationalization.
Would you tell us more about the 7 questions?
- What: Which products / services should be sold? Do they have to be adapted for the new market? Are certain approvals necessary?
- Where: In which markets should products / services be sold? How do I define an interesting market?
- Who: Who is the target audience?
- With which: resources (financial resources, employees) should the internationalization be implemented?
- How: Which distribution channel is chosen?
- When: Within what time should the export goal be achieved?
- How much: Which volume should be sold?
(Further information can be found in the export manual of the Tiroler Wirtschaftskammer / Federal Economic Chamber of Tirol.)
The Federal Economic Chamber offers various programs and consultation in this contest. Who should a company address with those topics?
The Federal Economic Chamber is the first contact partner for all internationalization projects - regardless of whether it concerns a law topic, a business partner search abroad, a promotion of internationalization or export documents (certificates of origin, Carnet ATA). For inquiries that specifically concern a foreign market, we work very closely with the chambers of commerce (Austrian Foreign Trade Centers) in the respective countries. The Austrian Federal Economic Chamber has a worldwide network of more than 110 offices, which are service centers for the Austrian economy. These help Austrian companies, for example, when entering the market, doing business in a market, looking for suppliers, setting up a branch or even if a customer does not pay.
Support also exists in the form of funding. Which fundings can companies apply for and where can they find the details?
Through the nationwide internationalization program GO INTERNATIONAL, it will be possible to foster the development of new markets, the digitization of the foreign presence and the training and consulting costs for the international project business. There is also a TIROLER INTERNATIONALISIERUNGSFÖRDERUNG (Tyrolean internationalization funding) that supports Tyrolean companies in opening up new markets.