How important a priority is expanding your international business operations in the near future?

... Though Significantly Less Consider it a Short-Term Priority ...

While still clearly positive and possessing a similar level of deviation, respondents generally acknowledge it is more difficult to define and implement an international expansion plan than to accept its general value.

While still clearly positive the response to the second question was notably lower, with a mean ranking of 6.31 and median of 7. This lower enthusiasm was also evident in the fact that only 28% of respondents provided a maximum 9-10 ranking when asked about the immediacy of international expansion as a priority – as opposed to the 42% of respondents who accorded the same ranking when asked about the general importance of international expansion in the first question. At the same time, the deviation, while slightly lower than the first question, was still extremely high at 3.04, indicating a wide divergence of opinion.

Part of the reason behind this lower ranking might be it is far harder to define and implement an international expansion strategy than to acknowledge its general value. A President of a Small Electronics Company defined the issue, stating "We have plenty of market left in the US to keep us busy for quite some time. However, making a dent globally sooner rather than later is very important to us as well." This sentiment was reinforced by a Semiconductor Executive who noted, "… it would be nice to stick to domestic services, but that isn't a practical solution given current market trends. I have to feed my family". At the same time, a Product Manager for a $10M+ telecom firm described the difficulty many firms face in this area commenting, "In my view, current company priorities and limited manpower resources typically tend to delay the level of effort and support required in this area."

This lack of follow though led one Design Consultant to describe it as similar to a parent talking to a child. He stated, "Parents frequently ask their children why don't you study more and be a good child? They just nod their head and say yes but don't follow. That is the same thing here. People talk but do nothing."

As a result, respondents ranged from a Scientific Tool Manufacturer who emphasized, "It is essential to maintain an international presence to be profitable and competitive", to a Sr. VP for Software Development who opportunistically concluded, "If a good opportunity arises, we will pursue it."

An International Sales Manager active in the telecom sector, however, highlighted both the urgency and problems of doing business overseas commenting, "International business is more difficult if you are a US firm. Logistics, cultural barriers, and duties, are just a few of the concerns. You can drive to NJ and come back the next day, but that is not possible overseas. In addition, you have to understand different requirements. Large domestic companies are sometimes easier to deal with than foreign entities, but these days they are international as well. I just called on three Intel locations overseas. You can deal with Motorola Japan and the business goes back through Texas. It is not easy though getting our organization to understand and have the patience to deal with international. It usually is not as immediate, huge or easy an opportunity as many we see here. The internal sell is most difficult. After that, the customer is easy."

A VP/GM for a Large Consumer Electronics Components Manufacturer expressed similar thoughts, but from the opposite direction. He noted, "A majority of the business we do in Asia and Europe is sourced in the US. Nokia and Motorola make their decisions in Finland and Chicago, so the sale is in Asia but the decision made elsewhere. International business is critical -- but not expansion as the decision is made here. Expansion is important but on manufacturing side. It is more about being competitive. This d means making it in China. We want to do more but think sometimes we are limited as we do all the design work in US. We would like to do more but can't find the talent. We have successfully moved manufacturing overseas but haven't been as successful moving design there. You have this issue relative to the fact you need to be cost competitive to Asian suppliers, as they are good at copying them. Ultimately we will have to be more innovative as well as cost competitive. The real innovation takes place here but the incremental product development take place there."

Respondents' quotes

"In my view, current company priorities and limited manpower resources typically tend to delay the level of effort and support required in this area."

"We will be closing my current US location within the next year and about 30 percent of our business is relocating out of the US."

"It is essential to maintain an international presence in order to be profitable and competitive. It is dangerous to undertake manufacturing exclusively on foreign soil, and it is essential to understand the laws of the land wherever a business venture is established. The laws can only protect those who know how to establish protection a priority."

"My employer has invested heavily in China and Taiwan for the last several years and that has proven to be the right business move."

"We have plenty of market left in the US to keep us busy for quite some time. However, making a dent globally sooner rather than later is very important to us as well."

"The largest value of our business for the customers is to introduce high technologies from other countries."

"It would be nice to stick to domestic services, but that isn't a practical solution given current market trends. I have to feed my family."

"We have offices and plants in the UK and China as well as our main facility in Pennsylvania."

"Our company primarily serves US customers, the only time we need foreign presence is when the CMs are overseas."

"I'm not sure what you mean by ‘business operations'; our company does not expect international sales to be important to our company, but we will be probably be looking to Asia for at least connectors, and possibly circuit boards."

"Our firm has assembled a sufficient business structure to support significant revenue without necessitating foreign expansion."

"We view China as a large future market."

"Other countries are far more conscious of day to day security needs than the US which appears only to react to crises in the security markets.

"I honestly don't trust foreign companies. Most don't have the capabilities that the engineers have in the US. However, they are very good at copying."

"If a good opportunity arises overseas, we will pursue it."