Practical Insights Doing Business with the EU

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Practical Insights Doing Business with the EU

• Cheryl Holland Bridges
• Director
• Center for Retailing Studies, Texas AM University

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Bridges Professional Background

• Over 25 years as a senior executive in the
  Retailing Industry Federated Dept. Stores,
  BATUS, Rodier Paris, Hallmark, Ashford.com
• 18 years in merchandising/buying domestically and
  abroad
• 10 years in product development domestically and
  abroad
• 4 years at Texas AM Universitys Center for
  Retailing Studies

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Merchandising and Product Development
Experienced Abroad

• UK
• Belgium
• France
• Greece
• Italy
• Netherlands
• Portugal
• Switzerland
• Israel
• Hong Kong
• Japan
• Taiwan

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E.U. Countries Experienced

• Belgium
• France
• Greece
• Italy
• Portugal
• U.K.

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Unique Products Higher Margins
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Texas AM University Marketing Study Abroad 2006

• E.U. Countries Visited
• France
• Italy
• Netherlands
• U.K.

• E.U. Classes in France and U.K.
• Peter Viggers, MP
• Martin Phelan, Head Americas Section UK Trade and
  Investment
• John White, Consultant
• Graham L. Brown, Professor, IGS International

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Some Perspectives on the E.U. Given

• Complete history of the European Union
• Wimbleton-ization of England
• London, financial center of the world.
• (Joining) the E.U. is attractive to poorer
  countries.
• Brussels is the Center of the E.U.
• VAT pays for administration but a large part
  goes to farmers.
• France is most tax subsidized country in the
  civilized world.

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A Visit to G.E. in Italy

• Texas AM University Marketing Study Abroad 2006

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GE Nuovo Pignone S.p.A

• How an Aggressive American Multinational merged
  with a formerly Italian state-owned enterprise

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• Develop the business with Global Brains and
  Local Touch

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Cultural Differences Faced

• USA Business Culture
• Shareholder Value
• Limitless Growth
• Winner take all!
• Global Approach
• Fast Paced
• Company is a Business

• Italian Business Culture
• Stakeholder Value
• Sustainable Growth
• Social Responsibility
• Regional Approach
• Slow Paced
• Company is Family

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GE Leadership Imperatives

• NOT ONLY
• Discipline
• Deliver
• Execute
• Business Rigor
• Personal Productivity
• Communicate
• Play to Win
• Best People

• BUT ALSO
• Imagination
• Motivate
• Generate New Ideas
• Global Thinking
• Intellectual Curiosity
• Listen
• Hate to Lose
• High Performing Teams

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Conducting Business Abroad

• Understanding Differences and Commonalities

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Common Logistical Differences

• Time in the Various Markets
• Language
• Negotiations
• Terms of Payment
• Shipping
• Time Management

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Procuring Products Domestically and Abroad

• Domestic Markets
• One to ten trips per year
• 3-6 days in each market
• 3-6 month lead times for deliveries
• Terms of payment negotiable
• Allowances negotiable
• Uniformity of Sizes

• Foreign Markets
• One to three trips per year
• 10 days to 3 weeks in each market
• 6 18 months lead time for deliveries
• Terms of payment rarely negotiable
• Allowances rarely negotiable
• Sizes vary by country

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More Comparisons

• Domestic Markets
• Work one-to-one
• Product performance reports reviewed
• Price/Value may be Higher
• Little cultural differences/challenges

• Foreign Markets
• Middle men/agents
• Guides/interpreters
• Customs/shipping issues
• Price/Value may be Lower
• Multitude of cultural differences/challenges

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Personal Skills Necessary to do Business Abroad

• Know duty/custom rates, shipping, duty and
  payment terms, and current value
• Appreciate how other countries do business
• Learn polite terms in various languages
• Adapt to cultural environments
• Patience, Energy, and Enthusiasm

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Understanding Cultural Differences

• What are cultural differences?
• How do they impact business negotiations?

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Cultural Iceberg
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The Cultural Iceberg

• What is Visible
• Art
• Dress,
• Food
• Ceremonies
• Theater
• Literature
• Architecture

• What is Invisible
• Work ethic
• Team decision making
• Time management
• What is said and not said
• Attitude toward justice
• Communications between generations
• Gender Bias

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Example of a Stereotype

• French seen by Americans
• Arrogant
• Flamboyant
• Hierarchical
• Emotional

• Americans seen by French
• Naïve
• Aggressive
• Unprincipled
• Workaholics

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Benefits and Risks of Doing Business Abroad

• Benefits
• Higher margins
• Product exclusivity
• Product uniqueness
• Prestige
• Image
• Personal growth and experience
• Consumer wins

• Risks
• Manage hidden costs
• Import duties and taxes
• Travel time and expense
• Longer lead time
• Fluctuation in
• Few reorders
• Returns/allowances rare

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Why Do Business with the EU

• Transatlantic ties The EU shares USA values of
  democracy, human rights, and commerce
• EU countries invest in the USA and particularly
  in Texas
• Risks of doing business abroad are reduced
• Customer satisfaction prices, values, quality,
  image

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Questions?

• My contact information
• Cheryl Holland Bridges, Director
• Center for Retailing Studies, Texas AM
  University
• C-bridges_at_tamu.edu
• 979 845 0325