... And Fewer Still are Pleased with the Results they have Achieved

Respondents accorded themselves a lower relatively neutral 5.66 mean and 6 median ranking when asked to rate the success of their existing expansion efforts. This was notably lower than the answers given to both the first and second questions. In fact only 9% of respondents provided 9-10 rankings to Question 3 -- in comparison with 42% for Question 1 and 28% for Question 2. Additionally, 9% noted they were not sure, as opposed to only 5% and 4% to the first two questions respectively. As most respondents are likely inclined to give themselves the benefit of the doubt, one might imagine this view is even a bit higher than what might be expected with a more objective examination. Additionally, as respondents who had not yet initiated international expansion plans did not answer this question, it should not be surprising that only 132 participants gave a response. More notable, however, was the far lower deviation in responses when compared with questions 1&2, at 2.34. This was lower than the 2.7 average deviation recorded in the survey and indicates a relative uniformity in responses.

Perhaps the primary explanation for the less positive response was the more tangible nature of the question. As respondents were reflecting on their actual achievements, rather than the more abstract notion of whether international business expansion is important, they had a more definitive frame of reference. Given the problems inherent in implementing any new business venture, particularly one as complex as international expansion, it should not be surprising that respondents were more discerning and less positive in their impressions.

One East Coast Consultant to electronics manufacturers highlighted the difficulties of translating objectives into action, particularly in small to mid-sized businesses noting "We have high targets for exporting, but were not able to achieve them for several reasons." A West Coast Technology Executive further commented, "It is difficult to manage business long distance. Travel, cultures and languages are always major barriers". Another Executive noted, "Works better when we have time and resources to travel to distributor's country" and a Software Developer stated, "One project that was outsourced was not successful".

These issues, however, are not unique to smaller firms. For example, a Group Manager for a multi-billion dollar Design Automation and Services Firm commented, "Licensing issues in China are, and will continue to be, a problem. Lack of enforced copyright protections makes profitable expansion a challenge". As a result, firms of all sizes are reluctant to act, with one Midwest-based Semiconductor Engineering Executive stating, "It is a stretch to say we have concerted efforts to increase international sales. Most of the business we receive is because of our market niche. It isn't necessarily due to active marketing/sales." This sentiment was partially explained by a Texas-based Systems Developer, who noted "Takes a large investment effort to get foreign business and the capture probability is hard to determine due to all of the variables, including politics."

Logistics and travel are also a major problem, as is the need to absorb and understand new business practices. As one International Sales Manager stated, "How often can you make that trip? I just spent two weeks in Asia and I am dead. I go seven times a year and that is not enough. We need to supplement that with videoconferences and lots of communications. It is important to be there - especially with Asians - the handshake is the agreement and a contract is not sufficient."

Interestingly, even executives who proclaimed themselves satisfied with their efforts expressed less than totally positive sentiments. A New England-based Scientific Equipment Manufacturer for example stated, "Overall the outsource program is working. However, it takes a long time to get established and requires a LOT of patience." Another Manufacturer expressed a similar view, commenting "Our Company suffered losses from the South Korean economy collapse and the Tiananmen tragedy in 1989. On the whole, it is essential to take a longer view of developing technology in other nations."

Respondents' quotes

"Our firms unachieved global potential has been disappointing."

"Our company has found that the only thing that is less expensive in China is unskilled labor."

"Licensing issues in China are and will continue to be a problem. Lack of enforced copyright protections in China make profitable expansion in China a challenge."

"Our company has suffered losses from the South Korean economy collapse and the Tiananmen tragedy in 1989. On the whole, it is essential to take a longer view of the developing technology in other nations. The political aspects notwithstanding, South Korea is an excellent opportunity for expanding our corporate objectives."

"We are historically active in Europe, Taiwan, and China. The home market is the US. Due to the manufacturing shifts in Asia, we need to increase our activities to follow our customers."

"It is difficult to manage business long distance. Travel, cultures and languages are always major barriers."

"International activities work better when we have time and resources to travel to the distributor's country."

"Our company's one outsourced project was not successful."

"Most of the business we receive is because of our market niche. It isn't necessarily due to active marketing or sales."

"It takes a large investment effort to get foreign business. Capture probability is hard to determine due to all of the variables present, including politics."

"US pricing policies prevent us from getting the most from the current export market."

"Overall, all our company's outsourcing program is working. However, it takes a long time to get established and requires a lot of patience."

"The purchase of IC components in North America has dwindled to almost nothing. Only a few companies still design system level products in North America and that will soon move to Asia as well. It will be impossible for me to find work in electronic component sales in North American very soon."

"We are looking to either work with new representatives in the EU or to create a substitute to handle sales better."

"India Design Center is a perfect example of Quantity vs. Quality. The productivity for hardware and software group is 50% of US productivity due to lack of skilled and experienced resources."