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Going Global
Doing business internationally isn't just for Fortune 500 companies anymore. Smart businesswomen know that the doors to success are located throughout the world. Here's how to open them.
September 12, 2007
Atlanta Woman magazine wanted to learn about the
challenges and rewards of doing business overseas. Here's an edited conversation among (L-R)
Cassandra Tennille, founder, president and CEO of Tennille & Co. (formerly The Plantation
Holdings Group); Diane Alleva Cáceres, founder and managing director of Market Access International
Inc., a company that works with small and mid-size businesses, as well as governments, to provide
expertise in international trade, investment and enterprise development; and Anisa Meriem Telwar,
president and CEO of Anisa International, Inc.
CÁCERES: As we've worked with companies as they go internationally or try to access international markets, we've seen that they really do it for three reasons. And those reasons are: One, you want to reduce costs and the source for what you need is cheaper overseas. Two: You need to expand into new markets. Three: a combination of both.
The international component is really, really important today, no matter what the size or industry segment. The question is how to do it and how to do it successfully.
ATLANTA WOMAN: Is there a certain size in terms of revenue or a certain stage in
the business cycle when a company should start expanding its focus overseas?
CÁCERES: It's hard to generalize. We've worked with a start-up company in Newfoundland whose first client was in Florida, so they had an international relationship from the start. Then there are the smaller firms who have done well domestically - say $3 million to $5 million in the States and did a little exporting, say from people who saw their Web site and ordered from them. But they have no export strategy in place and don't have people to focus on international trade. They don't have any idea how to do it since it wasn't something they planned from the beginning.
And then you have the large international companies that have been active internationally for years, but with consolidation they have new pressures to compete. But their issues are different from the small and medium-size firms.
But today, I think every company could - and should - have an international strategy.
TELWAR: My mother had an export business, so I was always aware of international trade and its importance for a business to survive. I was always aware of how it affected our markets. I've always purchased from Asia, but moving to the stage of opening my own factory in Asia was a totally different experience.
I never thought I'd have my own factory.
I started this in '87, and in '92 started traveling to Asia and in '93 really started doing a lot of business there, but we worked with agents who handled it. We first were in Japan, then Korea.Then Korea wasn't as economically viable so we went to China.We had Koreans handle China for us and did for years. They handled the financials, the paperwork, the culture, the language.
Then, through some adversity, it became apparent that it had to change. My customer base demanded I have my own factory. My customers demanded that they not have to go through agents. My customers wanted to make sure that our processes were in place and they wanted to deal directly with the factory.
I was working with an agent who wanted more of a margin, and he wasn't protecting me. I had all these customers and I couldn't deal with him, so I had a lot of factors to justify a factory.Then, I had all this business to give to my factory, but I had so much to do to get the factory ready, to get it in place. I would rather have worked with an agent all my life.
Now, we have so much opportunity. It's American quality control and social compliance but in China.We want to treat our people better and have a long-term point of view. The Chinese are so focused in the moment.
Eventually I will be able to sell
my products in China, Russia and India.
CÁCERES: What is the biggest surprise for you?
TELWAR:That we own it completely. You don't need 50-50 Chinese-American ownership anymore. Even my customers don't believe I own the factory.
AW: What else have you found?
TELWAR: The key for me is hiring good people. I've been lucky, blessed. I have a Korean who moved to China and works for me. I can handle the marketing, the customers. I can't handle China, and he does. I have an amazing team in China. We've been there since 2003, and we've come so far and we're expanding. I have 700 employees in China.
CÁCERES: What was the main challenge?
TELWAR:We had to change the workers' point of view. It takes a long time. They can make the brush. They didn't know how to document or understand why they needed to follow compliance. They didn't understand so many things - like what a trash can was.The workers would just throw their garbage on the floor.They would throw eggs on the floor after lunch and then want to start handling cosmetic brushes that people put on the face.We literally had to go out and buy trash cans, and it took a month for them to learn.This is what we had to do.
TENNILLE: We are so diversified - antiques, reproductions, lamps, accessories, children's clothes, jewelry. I used to have my reproductions made in England, but the value of the pound squeezed me, and there's only so much people will pay for reproductions. I would run out of product, and I wanted things that no one else had.
So for me, going internationally meant I had better costs and a nice quality product that I could bring in one time. It allowed me to develop my own products. Like with our children's clothing, I design it, pick the fabric and thread, and then manufacture and sell it.There was no middleman.
In each aspect of the business, we're taking it to the country where they're known for it. Like Peru has fantastic prima cotton, so we make our children's clothes there. There's a region of China known for its pottery, so we make our lamps there.
When I go to China, I go to an agent and say this is what I'm looking for on this trip. It's customizing my product to my store and to my customer.This is the way for us to have all new and exciting products and brand our store and name.
AW: Do you worry about intellectual property issues?
TENNILLE: You have to worry about conflicts, especially if you have products being manufactured in a factory that handles other business. You have to make sure the lines aren't similar. Once I put something up on my Web site, everyone can look at it and copy. I have to look for the next right thing all the time.
CÁCERES:You've mentioned all the differences between doing business overseas versus here. How do you manage through all the issues?
TELWAR: It's hard. Sometimes it comes down to time or efficiency. Training costs are high because you have to start at step one instead of step 10 in a lot of cases. My workers went on strike four days after we opened.They thought we would pay them more, and they got very aggressive. It was real hard for four months. We waited it out. We had someone talk to the workers. You do what you have to do in the moment. I don't think I slept. I wasn't able to be hands-on there, and I had to trust my management. It was the hardest thing I ever did. It was truly sink or swim. I had something to lose. My business was $10 million at that time, and I wanted to keep my business. It was win all or lose all.
TENNILLE: I think you just get in there and experience it. The more you are there, the more you get it. I have to go where they do it well. If you want Vidalia onions,you go to Vidalia. There is a region in China that paints porcelain beautifully. I give them pictures of what I want, and they do their craft.You have to be perceptive and listen. I do a lot of research on where I'm going and whom I'm meeting with. I have a great translator, and I send the pictures to her. She goes to the factory, and she tells them what I'm thinking. She knows what the inside of my store looks like. She's my eyes over there. She knows what I'm thinking. I've Americanized her to think like us. It saves a lot of time.
CÁCERES: Is it difficult being a woman and doing business there?
TELWAR:You will find in a Chinese factory strong women, and we are promoting them. The workers there are not used to that. You will find a lot of Koreans and Japanese are disrespectful to women in their own culture, but if you're a client, they are very gracious. I did have to have my managers tell my workers that I am in charge, I write their checks. They told them that they have to respect my decisions, and they do.
TENNILLE: They don't look at you directly, and I do. I do sometimes wonder what they think of me.
CÁCERES: How much is language an issue? In Korea, they are talking about instituting a law that if you come into the country to do business that you first must take a language class. I know of one company that left Korea and went to China because of that.
TENNILLE: I think they can write it better than they speak, but I think they understand more than they let on. I'll have them e-mail me, and then we talk.You have to be very clear about what you want. Our workers make porcelain lamps, and they did it perfectly. We wanted to have an age-old look, and it took months for them to understand. We basically had to sketch and mark exactly where we wanted it worn and show them examples of good, better, best. It took forever - a year and a half. But once they got it, they got it. I'm afraid to change my mind!
TELWAR: We started English classes in the factory. They didn't go over well.
AW: Did you consider learning Chinese?
TELWAR: I did, but then I think about what else I'd rather do. I can't do it all.
