As the energy transition gathers pace, the need to access the essential raw materials which underpin it is also accelerating.  Some basic statistics evidence this demand:

• An electric car needs six times more rare earth minerals than a conventional vehicle;
• An onshore wind plant needs nine times more materials than a comparable gas facility;
• Between 2017 and 2022, the energy sector drove a tripling of global demand for lithium, whilst demand for cobalt and nickel rose by 70% and 40% [i] respectively;
• Between three to 6.5 billion tonnes of transitional minerals will be needed over the next three decades if the world is to meet its climate goals[ii].

The current and future global demand for transitional metals and minerals offers a potentially huge economic opportunity[iii]. This is particularly the case for Africa, where more than 50% of the world’s cobalt and manganese, 92% of its platinum and significant quantities of lithium and copper are to be found. Almost all of the continent’s current output is presently shipped as ore for processing in third countries (primarily China), meaning the potential economic benefit of this enormous mineral wealth has not filtered through to the real economics in its African source countries[iv].  Africa exports roughly 75% of its crude oil, which is refined elsewhere and re-imported as (more expensive) petroleum products; and exports 45% of its natural gas, whilst 600 million Africans have no access to electricity (approximately 53% of the continent’s population)[v].

A number of African governments have expressed their determination to avoid repeating the ‘resource curse’ mistakes of the past, by using the continent’s natural resources to drive domestic economic growth, while creating meaningful domestic job opportunities, rather than exporting them and the consequent economic growth elsewhere.  This approach has led a number of African countries to impose export restrictions on raw minerals; promote domestic processing; and demand that agreements with third countries promote technology transfers and improve domestic processing capacities and workforce skills.

Whilst African countries are absolutely right to want to retain more of the commercial and economic benefit of their natural resources for the development of their own countries, rather than enriching third-party processor nations, the move to protect national resources in this manner has coincided with a global move towards protectionism and a rise in great-power competition which has made the race for the raw materials necessary to power the energy transition even more acute.  This competition can be seen in President Trump’s ‘interest’ in the natural resources of Greenland, Canada and Ukraine.  And in the tense negotiations which have played out in London over the past few days between the US and China over access to processed critical minerals. 

And as the Great Power competition heats up, there is a growing risk that Western extractives companies become collateral becoming leverage.  Russian influence in the Sahel Region of Africa has already been effective in pushing Western companies out and replacing them with Russian companies.  There is some evidence of Chinese government influence in other parts of Africa pursuing a similar path, using influence which ranges from disinformation campaigns aimed at damaging companies’ reputations and bottom-lines, to offers of ‘no-strings-attached’ mining contracts which are not subject to (Western-imposed) compliance and BHR requirements.

Sustainable use of transition minerals

But, leaving geopolitical machinations aside for a moment, and returning to equitable access to resources there is a story to also tell about how African governments are planning to avoid a new ‘Scramble for Africa’ and secure the benefits of the demand for critical raw materials and rare earth minerals for the development and economic progress of their own countries.

In February 2024 a Resolution to promote equitable benefit-sharing from extraction and calling for the sustainable use of transitional minerals was presented UN environmental assembly in Nairobi. The Resolution, which was supported by a group of mainly African countries including the DRC, Senegal, Burkina Faso, Cameroon and Chad, was described as being ‘crucial for African countries, the environment and the future of [African nations’] populations.”[vi] The UNSG in a press release[vii]  dated 26 April, 2024 noted and accepted the importance of using the energy transition and the race to secure the raw materials critical to its success to ‘create jobs, diversify economies, and dramatically boost revenues’ in resource-rich developing countries.

And (quite rightly) many African countries are not waiting for the West’s permission, but have already taken steps to protect their natural resources and move up the processing value chain[viii].   This trend is only likely to accelerate.

African Protection of Natural Resources

Tanzania

Under its 2017 The Natural Wealth and Resources (Permanent Sovereignty) Act[ix], every company extracting natural resources in Tanzania must give the Government a minimum of 16% free carried interest. The law also gives the government the right to acquire more shares based on the level of investment and strategic importance of the project — up to 50% or more in some cases.  The 16% share provision gives Tanzania a say in decision-making, board representation, and direct profit-sharing from the mining companies.  This legal provision was the basis for the formation in January 2021 of the Kabanga nickel-cobalt project joint venture ensuring domestic ownership in a major, strategic battery-metal mine.

Zambia 

In January 2021, the state-owned mining firm ZCCM-IH took control of Mopani Copper Mines (previously majority-owned by Glencore) paying $1.5 billion to effectively nationalise the copper-cobalt operation. This move was designed to keep the strategic asset in national hands and secure more revenue for Zambia.

Burundi

In July 2021, the government suspended the operations of several foreign mining companies – notably Rainbow Rare Earths’ Gakara mine – citing “unbalanced” contracts and arguing that the State was not getting its fair share. At the same time, Burundi also halted rare earth concentrate exports (Burundi operates the only rare-earth minerals mine in Africa) and demanded contract renegotiations so that more profits benefit the country.  The Mines Minister commented that “The State, which owns the soil and minerals, is not making a profit as it should,” and set out an intention to ‘[re]renegotiate…these agreements for the benefit of the people, because these minerals must be used to finance the development of the country.’

Nigeria

In July 2022[x], Nigeria banned the export of raw-ore to (in the words of its Natural Resources Minister) end the “plundering (of) the continent for raw materials” by incentivising local processing or refining before exporting and “…bring industry to Africa so that our people can be employed.”

Zimbabwe

In December 2022, in response to a global boom in lithium demand, Zimbabwe banned the export of raw lithium ore. The Mining Minister announced that no lithium-bearing ores or unbeneficiated lithium could be exported without written permission, in order ‘to spur domestic value addition and battery manufacturing in Zimbabwe’.

In January 2023, the government extended the lithium ore ban to all unprocessed base mineral ores (including nickel, chromium, manganese and tantalite). Companies with local processing facilities are exempted, reflecting a policy to retain more mineral value domestically.

Namibia

In June 2023, Namibia’s Cabinet approved a ban on exporting unprocessed critical minerals, including crushed lithium ore, cobalt, manganese, graphite, dysprosium and terbium – although, with special ministerial approval, it is still possible to export small quantities of these minerals. The government noted that, with high global demand for battery metals, Namibia was determined to ensure that it recouped some of the value by requiring such minerals to be at least partially processed in Namibia. This ban is of particular concern to the EU, coming just eight months after the EU signed an MoU with Namibia aimed at securing the bloc’s access to rare earth minerals.

Namibia is also one of the world’s top uranium producers, but the ban does not appear to extend to uranium.

Ghana

In July 2023, Ghana’s government adopted a “Green Minerals Policy” (aka Minerals of the Future policy) that prohibits the export of raw lithium and other green minerals[xi]. The cabinet decision (July 27, 2023) aims to “retain a significant proportion of the value chain” in-country by mandating local processing before export.

In February 2024, Ghana’s President announced a further series of measures to extract greater value from its natural resources, including:

• the construction of a refinery dedicated to processing locally-produced manganese;
• a prohibition on the export of raw bauxite[xii] (following Indonesia’s 2023 bauxite export ban) lithium and iron ore;
• the prioritization of Ghanaian investors in acquiring Newmont Corporation’s Akyem gold mine[xiii] and Atlantic Lithium’s Ewoyaa lithium project;
• the creation of a 400-kilogram capacity gold refinery.

Botswana

In July 2023, Botswana renegotiated its mining rights with De Beers to increase the share of rough stones it receives, create a dedicated diamond fund to be used for investment in “additional value to the Botswana economy”;[xiv] and require De Beers to invest in and develop the domestic diamond valule-chain.

The Sahel

Since 2020, there have been coups d’états in Sudan, Mali, Burkina Faso, Guinea, Niger, Chad and Gabon. These seven countries are important sources of gold[xv], uranium[xvi], bauxite[xvii], manganese[xviii] and iron ore.

Niger

After seizing power in July 2023, the Nigerien military junta imposed a moratorium on all State export contracts, with the intention of reviewing them to ‘improve their commercial fairness’ – a provision which includes pegging prices of exported minerals to trading prices quoted on international bourses. In December 2024, the State back control of a French-operated Uranium mine, after having refused to renew its licence in June 2024.

Guinea

Since mid-2023, the Guinean Government has revoked, repossessed or cancelled over 220 mining licences for raw materials including bauxite, gold, diamonds, graphite, and iron.  These interventions have mainly targeted smaller operators and (so far) have been focused on under-developed or underperforming licenses. The Government has explained its actions as aimed at “freeing unused resources for other investors’ by reissuing those areas to more serious developers.  The government has also exerted pressure on major bauxite exporters to commit to building local alumina refineries. 

The pressure on mining companies appears to be part of Guinea’s push to ensure mining assets are actively exploited and contributing to the economy, rather than held speculatively. So far, the Guinean government has avoided the major operators, but it may feel emboldened by the lack of market reaction to take more aggressive action against them in the future.

Mali

In August 2023, the ruling junta enacted a new Mining Code allowing the state to take up to 30% ownership in any new mining project (10% free equity plus an optional 20% purchase within two years). The code also eliminated certain tax exemptions for foreign mining firms. While Mali is a major gold producer, the reforms were driven mainly by new lithium projects coming on-line (with, at 14% of continental production, Mali set to become Africa’s second largest lithium producer). The government has explicitly stated its intention to ensure that the sale of its lithium accurately reflects the value of the product on international markets.

DRC

In February 2025, the Democratic Republic of Congo – source of 78% of the world’s cobalt – announced a four-month ban on cobalt exports due to an “overabundance of supply on the international market,” with authorities hinting at possible longer-term restrictions (quotas, tariffs or extending the ban). Similarly with other decisions taken by African Governments, the decision reflects the DRC’s increasing desire to ensure that the country gains a greater domestic benefit from its raw materials production.  The four-month period expires later this month – it is still not clear whether the DRC Government will allow unrestricted export of raw cobalt following the expiry of the ban.

What is Driving this Phenomenon?

a. Geopolitics

Political uncertainty often complicates operating conditions for international mining companies.  Foreign mining companies are often portrayed as agents of foreign states, which can create difficulty in renewing contracts or obtaining permits.

Russia regularly hosts Russia–Africa Summits, at which it contrasts its no-strings “sovereignty” and security deals to those offered by Western companies/governments. Russia has leveraged (possibly fomented) insecurity in the Sahel, exchanging military backing and security support for minerals and encouraging the expulsion of Western troops[xix]. Russia’s willingness to undertake such transactional deals is only likely to increase the importance of its role in Sahel countries, whilst the growing links between China, Russia and Iran present serious security issues for Western governments – for example with regards to access to Uranium[xx].  This in turn may increase the complexity of operating in those countries as greater Russia involvement in Africa brings with it increased political risk.

Evidence of Russian interference against Western mining and extractives companies is strongest in The Sahel Region:

• Mali. Since the 2021 coup, Mali’s junta (backed by Wagner) has strongly pressured Western gold miners. In 2024 it detained Barrick Gold and Resolute Mining staff over contract disputes and seized gold stockpiles, forcing Barrick to freeze operations and pay a reported $438 million to resume mining. Wagner-linked operators encouraged Malian officials to nationalize or renegotiate lucrative gold contracts in favor of Russian interests.
• Niger. After Niger’s 2023 coup, the military government acted against French nuclear mining firm Orano. In July 2024 Niger revoked Orano’s permit at one of its uranium mines (for allegedly failing to resume production after militant attacks). This coincided with Russian state group Rosatom negotiating to take over Niger’s uranium assets. By late 2024 Niger’s mining minister was publicly courting Russian companies for uranium exploration.
• Burkina Faso. Burkina’s 2022 military government has shifted decisively away from Western partners. In April 2025 it awarded a new industrial gold licence on the Kourweogo (Niou) deposit to Russia’s Nordgold. This move, amid high gold prices, “signals deepening economic ties between Russia and Burkina Faso” and a pivot to Moscow over traditional Western allies.

But there is also evidence of growing Russian influence in resource nationalism decisions taken in other African countries:

• The Central African Republic.  Since 2018. Russian paramilitaries (the Wagner Group – now re-named the Africa Corps) have secured gold and diamond mining concessions in return for protecting CAR’s government in a form of State Capture where economic and political benefits flow to Russian-linked entities rather than the population.
• Sudan.  Since 2017, The Wagner Group have ‘protected’ gold, uranium, and diamond sites. Contracts, such as with “Meroe Gold,” grant Russian firms strategic mining access.
• Libya and Madagascar.  Russian paramilitary groups initially provided security and then subsequently acquired mineral assets — chromium in Madagascar and gold & diamonds in Libya.
• Mozambique. The Wagner Group (and subsequently the Africa Corps signed security agreements with the Governments, in return receiving mining and natural resource concessions (mainly in gold, diamonds, uranium, and rare earth minerals).
• Zimbabwe. The Government has been fairly explicit in replacing Western mining partners with Russian ones. In 2019 the government licensed only Russia’s state-controlled Alrosa (and China’s Anjin) to explore new diamond concessions, excluding firms like De Beers. The Mines Minister confirmed that De Beers and other Western companies were “not among those licensed” – a policy which effectively prevented renewal or extension of Western companies’ diamond licences and created space for Russian entrants.

b. African Solutions

However, in many other African countries where Governments have taken the decision to revoke, rescind or refuse licence renewal, the explication is domestic. African governments are keen to avoid the “resource curse” (by restricting or banning mineral exports) and move up the value chain (by boosting domestic processing) to increase domestic value extraction from mining and resource wealth.  From the perspective of the African government and society, this harder-nosed approach makes good sense in an era where, following agreement at COP28 to triple global renewables capacity and double energy efficiency, global demand for critical and rare earth minerals is only going to increase. Done right, it will ensure a better-educated and more economically-participative workforce, engaged in higher-value economic activities. And will avoid raw materials being exported for a low price and its processed final form being re-imported at a higher price (imposing both an unnecessary cost and loss to the local economy).

The approach is not without risk.  Foreign mining companies, whose expertise is arguably key to commercial success, will demand certainty about: political risk; the presence of mineral processing infrastructure (including freight and port facilities); a stable electrical supply; a battery value chain; reliable legal frameworks (including ESG protections); and sound financial management, ensuring effective use of tax revenues. Without those reassurances and the accompanying infrastructure, export bans could have a chilling effect on or divert foreign investment.  The DRC cobalt ban has already forced battery producers to intensify their research into alternative component materials.

International Support

The African Union is developing an African Green Minerals Strategy[xxi], which aims to improve mining regulation and institutions, and build a more attractive investment environment.   And some African countries have begun to cooperate across international borders to strengthen African collaboration in developing domestic processing expertise – in 2022 the DRC and Zambia signed an agreement to set up special economic zones in both nations for the development of EVs and batteries, backed by private and public funding in a bid to begin the shift from exporting to domestic processing.

A report[xxii] produced in August 2023 by the United Nations Conference on Trade and Development noted:

• the potential of African Nations’ mineral wealth to enable them to be key suppliers of automotive parts and components and encouraged them to make deals with automotive and battery producers to acquire technology and knowledge, while engaging in domestic processing to “… avoid being locked into the provision of ‘just’ raw materials, which results in very low-value integration into global supply chains.” 
• the importance of “equal terms of mining contracts and policies [in] catalysing lateral linkages between large-scale mining and local productive industrial development”;
• the important role of national incentives and regional cooperation in helping domestic companies gain competitive advantage in the mining sector.

In April 2024, the UNSG convened an international Pane[xxiii]l to address equity, sustainability and human rights across the value chains of critical energy transition minerals. The Panel was tasked with improving national management of mineral resources to ensure that increased demand for them does not ‘perpetuate commodity dependence, exacerbating geopolitical tensions’; and to help produce ‘globally agreed guidance to ensure responsible, fair and just value chains.’ The Panel’s Report, which was published in September 2024[xxiv] makes a series of recommendations for fairness, transparency, investment, sustainability and human rights, but along the entire minerals value chain, from refining and manufacturing to transport and end-of-use recycling.

The EU has begun to recognize it has an obligation (and a need) to act in this space to seek alternative mineral trade partners to China and Russia (and avoid a risk of supply disruption) and to help African countries benefit from their own raw materials.  In March 2023, the EU unveiled in its Critical Raw Materials Act, which aims to make the bloc less dependent on single suppliers by boosting EU mineral industries as well as offering African supply countries a more equal contractual footing through long-term raw materials and value chain partnerships.

Conclusion

Protectionism is on the rise around the world as the post-second world war political and economic consensus breaks down. Alongside this trend, the energy transition has unleashed a new scramble for green resources.  These two factors come together with particularly noticeable effect in Africa.  The collision of protectionism and the increasing need for access to green resources will impact most parts of the economy.  But it will affect mining companies most of all. The stakes are high, with the world’s major powers competing for resources and influence.  The outcome of this intense competition for resources will determine whether the energy transition is ultimately successful and the worst ravages of climate change can be avoided.  But to succeed, the energy transition must be a just transition – one from which African countries must benefit.    Resource nationalism without the necessary legal, financial and infrastructure investment could be counter-productive for African nations.  But done right, it could attract investment, training, jobs and infrastructure in a way which is genuinely beneficial for African nations and their populations.

The 10 Golden Rules for successful export

Preface

Over 27 years, I have successfully managed or advised international companies. Most of the companies became market leader within their industry and market. Several subsidiaries were successfully established under my leadership. I bought companies and integrated them into the root business.

Furthermore, I was lucky to work with open minded owners and managers, ready to listen to my suggestions. Some of the companies I was working with have been elected as references, by the US Senate, IBM and other organizations.

Hence, I could accumulate a lot of experience while I carried out my jobs. This expert file is written by a practitioner for practitioners. Follow these golden rules to avoid being hit by unexpected surprises. Your success will come faster and with less risk.

The expert file contains 3 chapters:

• Chapter 1: Why export is essential for companies
• Chapter 2: How companies get to export business
• Chapter 3: The 10 Golden Rules

If you follow these golden rules, you can become part of the successful exporting companies. Very in-depth fine tuning, product development and communication techniques are needed to make it to the Champions League. The techniques to make it to the Champions League are not subject of this short expert file.

Chapter 1

Why is Export essential for your company?

In the context of this expert file, export is not random selling abroad, but the development of a new foreign market for your company.

• When you export, you are less depending on the economic fluctuations of its home market.
• When you export, you are less vulnerable for competitor attacks. Working only in the domestic market, an international competitor with local price dumping can attack much easier.
• When you export, you create larger quantities, can produce more and thus are more productive.
• When you export, you refinance the structural and development costs through larger quantities.
• When you export, you learn from other markets. This leads to an increase of knowledge and thus you become more competitive on the know-how field. Your company shall be more competent and agile.
• Who can assert itself in tough markets is competitive. If you cannot succeed in export business your company might not be productive and competitive.
• If you provide technical products to OEM customers, you have to follow their clients, offer your service in their geographically active area. If you don’t, a competitor will take your role as a supplier.
• If you are already successfully established in a difficult export market, then this applies as a reference and another export is easier. You have successfully completed the learning process.
• The value of the company increases.
• You’re only successful, if you are clearly perceived by your competitors and your customers and if your customers repeatedly order from you.

Chapter 2

How companies get to export business

The export business by the principle of random

For small companies, often the export business starts that anyone from abroad applies to become dealer or agent. Sometimes, you are contacted directly by a customer. Logic, this is the reason why you are present on trade fares. Following this opportunity you are in the export business without having made any fundamental considerations. In the beginning, this usually goes well, first small result show up, however, you soon realize that it is somehow not running. Difficulties arise for which you are not prepared for.

The export business strategically planned – but wrongly planned – the way to disaster

If you are planning your export business, but forget to think about fundamental factors, you may enter into a high risk scenario without knowing it. These cases are real money-burning machines. I will give you one self-experienced example.

Initial situation

A Spanish stock hold company manufactures all kind of vending machines and payment systems. The company is extremely modern, features an extremely modern production and very competent development departments. The company is the undisputed market leader in Spain and Portugal. It is quite successful in markets such as the UK, Australia and South America. It is a company on the rise, with more than 1000 employees. Germany is the largest European market.

Hence, they wanted to succeed there and founded a sales company dedicated to sell the complete offering. Fully confident of the products, the competitiveness and the financial sources the management was sure that success is only a question of time. They knew the German market is extremely difficult, they knew it will take a long time and patience. The Board of Directors was extremely realistic.

The way to disaster

After the company was founded the homework was done properly. German catalogues, very good German instructions, committed sales people, who offered the products in all possible markets. In the first year, there were also many successes, because customers wanted to test the products. Everything went very well. Obviously at a loss, but this was budgeted for. Also, the well known international auditing company was surprised by these first successes.

In the second year disaster struck, because many customers sent back the purchased test machines. First complaints of customers that the machines are not ready for use, were not taken seriously. The Managing Director was under pressure to succeed, fired a sales person, made extreme price concessions and tried to succeed in all the different markets. The Managing Director dissipated his and the companies energy hopelessly in the different markets. He promised improvements towards the customers without holding the promises. The losses became a nightmare!

In the third year, it came to conflicts between the German Managing Director and the Spanish Export Director. The Managing Director was dismissed. The company was without any leadership. The accounting and general administration were getting worse. The auditing company made clear that the company needs to file for bankruptcy, soon. The losses amounted to several million.

They looked for a new Managing Director in order to turn around the disastrous situation. I took the challenge and we worked together. It took years, but finally we wrote a marvelous success story becoming market leader in two segments. This success story is hence another story and not part of this expert file.

But why did this disaster happen?

Some basic rules (golden rules) were not taken into account in the beginning.

Problem 1: The products were not suitable for the market. In Germany the requirements for the machines were slightly different compared to the countries where the company was already extremely successful. You think a machine selling cigarettes is the same in all countries? Far from. There was a small difference, and this one was fatal. In Spain, the machines belong to the innkeeper or to small operators handling some hundred machines, maximum.

The same fact holds thru for UK, South America, etc. The owner “knows” almost every machine. The time required to fill the machines is less important. Also, vandal security is not so important, because the installation places are known to the owners. In Germany, the ATM operator has many thousands of machines, up to 80.000 machines. The machines are filled by employed fillers getting paid by piece work and the vending machine are standing anonymously.

This has the consequence that vandalism safety and speed of the filling process are extremely important factors. To both factors was not paid attention. When the Managing Director mentioned this diplomatically, the Spanish Export Director did not take it seriously enough. He wanted to sell his standard products. He looked at the critical comments as an admission of incompetence.

The disaster was caused by the lack of market knowledge and consequently unsellable product characteristics plus the ignorance of the management.

Problem 2: Managing Director and Management. As in the Spanish company almost nobody spoke English or German they were looking for a Managing Director with sales experience and especially good knowledge of Spanish. It was decided to employ a Managing Director who could fluently chat in Spanish; unfortunately he was not prepared for a task with this complexity. His counterpart, the Spanish Export Director, was not capable to coach the chosen Managing Director in order to make him capable to run the company.

Problem 3: Dispersal, no priorities. The company had many different products dedicated to serve very different markets in the B2B business and in the OEM business. Some products were more electronic nature, others more mechanical nature, and always questions of software occurred. In short, the product portfolio and the portfolio of customers were extremely complex.

It was impossible to operate immediately in all these markets. They did not select one or 2 markets (with the associated products) to be served first. They did not focus the marketing, the sales efforts and necessary product development on one or 2 markets. The result was an accumulation of different problems which were no longer manageable neither for the subsidiary nor for the headquarter. In the eyes of the Spanish parent company, the German branch was a single Bedlam announcing negative news, only.

Conclusion

A few errors are enough to doom a successful company in the export business. Million € have been burnt and years have been waste. In Germany, the company became well known, however associated with an extremely bad image. They were further away from success than at the beginning.

Chapter 3

The 10 Golden Rules for successful export

In the following, the fundamental questions are listed which you need to ask yourself, prior to entering into a greater commitment. It is not a marketing plan, but the clarification, whether or not you may have a chance to be successful. In the following, the word product stands for your offering, whether you sell products, services or technology.

Rule 1: Which Market you are aiming for? Selection of the country or region

Distinguish between export markets that are similar to your home market and those which differ from your home market. Export markets that are similar to your home market can be characterized, as:

• You can communicate with your native language
• Competitors are almost the same than those of your home market
• The customers are almost the same or have the same requirements on your products.

The more these three points are distinct, the easier your project and the lower the risk. Examples:

For French companies this holds thru for countries such as Morocco, Tunisia, partially Belgium.

For German companies, this applies to Austria, Switzerland, and Netherlands with some lower expression of Poland, Czechia, Slovakia, Denmark and Sweden.

For US companies this applies to countries such as Ireland, United Kingdom, and depending on the product Germany, Mexico, Australia.

More complex and challenging are all markets which differ linguistically, culturally and by their market structure from your home market. In these cases, you must proceed more prudently and very self-critical. Think about which markets you want to export to. Enumerate what you know about each one of these markets, like:

• Size of the market and its composition
  • Which market exists for each of my products?
• Competitors
  • Which companies
  • From which countries
  • Who is successful
  • Who is less successful
  • If you know, why
• Customers
  • Who are the potential A, B, C customers
  • What do you know of these customers, how do they work
• Standards and industry standards
  • Do you meet all norms and standards? Do not forget the standards of the branch. Not only legal standards.
• Mentality
  • Is the mentality similar to your home country?
  • How do you see the mentality of the people of this market and their expectations to a supplier?
  • This is very important because ultimately you sell your products to people and they have expectations on business partners.
• Language
  • Do you meet the linguistic requirements within your company to communicate with this market?
• Why do you want to export to this market?
  • How important is a market to you and why?
  • This issue prevents wrong priorities.

If you are asking these questions and recording the answers in a matrix, then you will quickly have an initial overview about your knowledge of the markets. You might still want to classify a market as top priority, even though you know little about it. Why can this be useful? It is a big market or a key market. At least you know that your knowledge is not sufficient and you need to work on it.

It is a rule: never enter into a market if your knowledge is little.

Rule 2: Your products – critical backlighting of your offer. Are my products appropriate for this market?

Even if you sell your products very successfully in some countries, it can be that in other countries these products are virtually unsellable. This can have many reasons and that is why this question is extremely complex. Often, major misjudgments are made here.

Standards: I presume that you checked that your products fulfill all legal standards. This is a basic requirement.

Industry standards: The question, whether your products comply with industry standards is much more difficult. Sometimes these standards are not filed, they are born by habits. These can be informal standards. Imagine, your products are supposed to communicate with peripheral devices. Then check, if your products can communicate with the devices used in this specific market. The software or hardware being used may be different to those you know. Talk to the relevant associations and potential large customers.

Country-specific handling of the products provoke different criteria for the product assessment.

The way the customers handle your products can be different compared to your domestic market. These small differences can have immense impacts. Some variations are easy to recognize other differences are very subtle. The problem is, you often recognize these differences only, if you are already active in the market. Another problem is that the customers will not draw your attention to this problem. He does not know the differences. However, there is a method that is simple and effective.

Enumerate what the customer is doing with your products. How he uses it. Who works with the product; how is the maintenance done. What training levels do have the technicians, etc.? Recognize differences to your own market; consider whether this could have an impact. Discuss the discovered differences with potential customers.

The appearance of a product can be very important, even if it is a technical product. If appearance is relevant, then everything around the product is relevant, as packaging etc. What are the habits and perceptions of the market with regard to the aesthetics. Warning, aesthetics may be extremely important for pure technical products. The shapes and color language of technical products can cause subliminally much positive and negative response.

You want to export – you need to recognize such differences and you need to find solutions.

Exception: with your products, you set completely new standards.

Example: Offer a car that runs without fuel and electricity for a low price and you can sell it in the UK, even though it comes with a left handed steering wheel.

Rule 3: Are your prices competitive? The market has its asking price for your products

I advise you to backlight this question in detail. Of course this depends on the nature of the products.

Should there already be similar products in the market, which is almost always the case, then the market has a perceived value. This is a given fact. Forget arguments as my products are beautiful, better, last longer, etc. The market does not know these arguments, because he does not know your products. Your customers will compare always their own price experience with your offer.

What is the current market price? I mean not the list price of the competitors. I mean the real fare, which is assisted by the payment and Incoterms. Do not forget market entry fees.

What prizes are in the market for?

• Small customers
• Wholesale
• OEM
• Dealer
• Other market participants

Can you keep up with these prices? Where is your lowest price limit in case of a price war? Also keep in mind that your importer, agent or your subsidiary needs sufficient margins. Keep in mind that selling products costs money.

Example: A German company has been manufacturing technical products and sells them within Germany with own sales staff. Its competitors are American, French and Italian companies. The company writes good profits. The company wants to export within Europe. This will require dealers, such as in France. The price of such products is nearly identical in Germany and France.

Many years ago the American competitor has established a European price level. The company finds a dealer in France. He should take care of the French market, inclusive after sales service. Consequently, the dealer has costs and needs a good margin. Quickly it turns out, that the German company does no more earn money, if they export to the required prices.

What happened? The answer is bitter but clear – the company is not competitive, internationally. Lacking productivity and probably suffering from too little manufacturing output (because it sold only in Germany). The company can now choose between:

• Giving up active export – in the long term the company disappears from the market. The original problems as lack of productivity and to low volumes still remain.
• Give the dealer good prices and support so that he is fully engaged. Objective: To gain market share, increase quantities, improve production processes, improve product design. In short, to get the company ready for the future.

Export is a reflection of your competitiveness. If you can be successful in your home market only, then you are condemned to die.

Rule 4: Why should the customer buy your product? What is justifying your existence in the market?

Even if all questions regarding prices, technology, and market can be answered positively, you need to find answers to this question. Depending on the type of product/service/technology you want to sell you need to give a irm answer to your customers. Bear in mind, to buy or even test your products means an effort to your customer in terms of time and money.

Examples of these efforts:

• Sampling
• Introducing the products into the existing system
• Training of technical personnel
• After sales service
• Logistics
• Etc.

When I ran a large company with a multi million budget for the technical purchasing, I got daily requests from suppliers to test their products. Every properly conducted product testing devours enormous sums of money and only makes sense, if there is a clear answer to the question: Why should my company be interested in this specific product/service/technology?

Or in other words, the 3 key questions of a purchaser are:

• What solution to the existing problems does this product offer?
• How can the product help me to become better than my competition?
• How can it help me to reduce my overall costs?

Each professional purchaser is asking these questions, directly or indirectly.

Develop sound arguments for your products and the reason why the customer should buy from you. Examples of argumentation:

• Technical advantages
• Price advantages
• Technological advantages
• Maintenance benefits
• Strategic advantages, such as worldwide service network
• Logistical advantages
• Aesthetic benefits
• The fact that another competitor is necessary because there is a supplier oligopoly
• The competition is slow and does not address the customer requirements
• Etc.

I have operated businesses which have changed the arguments in the course of time. So my reasoning was a price and strategic first (oligopoly of suppliers), because our products were not much better. Later, we had developed new product lines for the market, and our focus was placed on technical and logistical arguments.

Not having real arguments just having good products, with a comprehensible price, you still can export, even successfully. However, you depend on the incompetence of your competitors or you must be extremely sales- boosting.

At the end, a customer never buys a product/service or technology – a customer wants to buy a solution to his requirements.

• A doctor wants catheter tips holding to the guide wire
• A car manufacturer wants to reduce weight and price
• A producer wants more efficiency
• A designer looks for new aesthetics
• An organization looks for a CRM giving answers to their needs
• A manager wants to run his business trouble free and in a competitive way

Rule 5: Do not dissipate – define your offer. Be clear in your statements

Supposed your business has multiple product lines for different markets. Then you need to think about which product lines you are selling first to the export market. The decision is formed from a mix of your product expertise, margins, market size, the complexity of the market and the competition. Sometimes a reduced offer, professionally performed, is more successful than pure quantity. Learn to say no, even to yourself.

Examples: An American company which had over thousands of products and who was already successful in Europe wanted to introduce some new specific product lines in the European market. They overlooked that there were local Italian, German and French companies covering these applications better than the US companies. Even though everybody tried hard, the successes were marginal.

At the end, we bought the Italian competitor and incorporated its technology and expertise into the international distribution system. Everyone was happy. The Italians finally had access to desired markets and more volume, and the European sales network could boost business with a new market. The American headquarter had better products than their domestic US competition.

A German company wanted to gain a foothold in the United States. From the wide product range, we chose only those product lines having real advantages over the US competitors. Doing so, our market was less complex and our sales could concentrate on those sectors with a high sales chance. Result was a quick success, highly motivated sales force, little setbacks, and above all, we established a positive image within our US customers.

The product itself is only a part of your offering. The catalogues, documentation, the marketing, the communication and the behavior of your employees are part of your offer, too. This is an utmost important fact. In your domestic market you have a trained sales force and trained customers. In the export market you start at zero. Therefore, you must use great emphasis on the intelligibility of the catalogues, product descriptions, Web pages. Pure translation often isn’t enough, because a German thinks very different as a Spanish, Chinese or an American individual.

For products you are offering, the communication must be clear unequivocal and absolutely logical. Doing so, you are considered being competent and trustworthy by your new customers. Always think, you must be better than the established competition. An American entrepreneur who was my mentor always told me: “Freddy, never forget, make it easy for your customer to buy from you”.

Rule 6: Is your company ready for export – a matter of attitude and culture

Successful export means that your company is changing. You need a multilingual staff. You need an open-minded staff being open to other cultures and thoughts. Narrow-minded culture needs to disappear. You need a healthy mix of sensitivity and determination. Openness to people and companies who behave different must be given. You need patience and the ability to be self-critical. With these attitudes export will enrich your company.

It is clear:

• A French company which does not want to adapt to the German values and practices will never be successful. Punctuality, observance of commitments and precision are very basic requirements. A German customer may want to drink a beer with his supplier.
• A German company that does not want to respect and adapt to French customs has nothing to do in France. French virtues are flexibility, sense of improvisation and skepticism about changes. A French customer may want to dine with his supplier.
• Americans who do not want to accept that Europe is a pattern of different cultures, shall have a hard time in Europe. The American customer may like to play Golf with his supplier.

I could continue this list infinite.

A few years ago, I managed a South German company which was in the third or fourth generation of owners. Actually, the staff was convinced that export is useless and loomed against every innovation. It was hard work to eliminate these negative attitudes.

Consequently, ask yourself, at what stage of spiritual openness is my company today.

Rule 7: Is the Company willing to face the Consequences in the Long Term? Does the Company have the Long Term View?

In addition to the openness, you need consistency and staying power. Often, the starting process is done with much euphoria, then the first difficulties arise you lose power and conviction. Some companies believe that success starts after a few weeks.

You would rather start with less euphoria, make one step after the other and work in the long term, sustained on the project. Doing so, success is approaching. Entering new markets is a complex project, sometimes it goes faster, sometimes slower. Successful is the one who works hard, with conviction and who accepts the time it takes.

Rule 8: Your Management for your Export Business. You need experienced Management.

An inexperienced freshman has nothing to do in this business. You move to virtually unknown territory. You need an experienced guide. You never would dare to cross a crevasse with an inexperienced guide. I warn you explicitly, cheap and inexperienced comes to be expensive. Of course, you can put young people aside to an experienced manager. For this type of project, you need a bright brain. It succeeds or fails on the selection of this person. You must develop trust vis-à-vis this person. You need to have an open ear for the arising problems.

The other employees in the company are another important factor. It must be clear to all of them that this project is ambitious and difficult, and demands efforts from everybody. The resulting export unit should enjoy the status of a task force, which is supported by all sides. You must listen to the wishes of this task force and consider constructively. One single department that does not support the export can jeopardize the project.

Is it better to take a Manager from your sector (industry) or someone outside your sector? I took over companies as industry specialist, but also as an industry newcomer.

A manager, who knows the specific industry is faster operational, of course. He is affected by the industry, may be there since many years. A certain blindness may have developed. There is the great risk that he copies known best practices and pattern, although these may not fit to your company. An industry newcomer is initially slow, but he has the huge advantage that he is not sector blind. He brings experience from other industries. The creative potential is much greater.

Anyway, as newcomer, you need to be different from the established competition. You need to be better. You need someone who can develop lateral thinking. Therefore an industry newcomer often is better, provided your staff can teach him the essential know how.

Rule 9: Strategy, Marketing and especially Image

Depending on your circumstances and budget, you need to develop a strategy:

• Buy a competitor
• Establish a subsidiary
• Send sales people into the country
• Working with distributors
• Search agents
• And much more options available, depending on your specific case

No matter what you decide, you need to do it consistently. Strive for quality not for high speed. Your first steps are decisive in the long term. Think carefully about each option before you decide on a path.

Marketing and communication are just as important as your products, because they are completely unknown. Adapt your marketing and communication to the local market.

A major issue, seldom being thought about is image:

• A positive corporate image is like a life insurance policy in difficult times.
• A positive image helps to success.
• A bad image is like tar on the skin, to get rid of it, is very difficult.

I took over companies with a bad image, several times. I know how long it takes and how difficult it is to change it to a positive one. You start from zero, you have no image file – it’s up to you and your behavior which image you define for your business in the new market.

To my staff, I have always emphasized to behave and communicate in a way that the image never gets affected negatively. The goal was always to improve the image. No selling, no communication, no advertising that the image compromises, no statements or promises which are not respected. To comply with this and to hold out is difficult, because you must let pass “opportunities”, sometimes. Your behaviour versus customers and suppliers must meet the highest standards.

What do I mean, when talking about image? The feeling of my stake holders, that they deal with a respectable, professional company, meeting high quality and technical standards and on whose statements one can rely on. The end user needs to have a clear vision for what the company and its products stand for.

This is not a statement about pricing, nor does the company need to accept all wishes and requirements. But it does mean, that the company seriously deals (reflects) with the customer’s requirements. It also means that the company is respectable and only deals with respectable customers. For example, customers who pay invoices in time.

A small excursion to the car industry, concerning image. Actually, there are many talks, why the French car industry does no more sell enough quantities. Everybody talks about production costs, nobody talks about image. Most German car manufacturer have a certain image, as:

• Reliable
• Technically advanced
• Sportive
• High quality
• Save to drive with
• Etc.

For the successful manufacturers you can easily identify who stands for what, reflect on Audi, BMW, Mercedes or Volkswagen. For the less successful manufacturers, it is difficult to clearly identify it, think about Opel or Ford.

Make the same exercise for Renault, Peugeot or Citroen, and you may find out why many consumers desire to buy a car from another manufacturer, coming closer to the image they are looking for.

Successful corporations know that sales are generated by the combination of:

• Image
• Product (your offering, your problem solution)
• Competitiveness
• Approach to the customer

Rule 10: Make 2 Business Plans Black and White – optimistic and negative scenario based

Before you start, you establish two business plans: One with a realistically optimistic approach, and one with a negative approach. Both plans are important. The optimistic business plan is, of course, your motivation, your goal.

The negative business plan helps you to create a worst case scenario. It helps you to evaluate the risks. As I mentioned beforehand, we need a long-term strategy, we want success. This means, you even can suffer a worst case situation without having to completely change the long-term strategy or directly fall into panic.

If you follow this entire rule, then primarily you are covered from extremely negative unexpected impacts and the probability of success is much higher. Also, the total cost will be lower, because the project is well thought out. Potential hazards are known to you.

Rule 1 to 10: Not paying attention to each of the 10 Golden Rules can lead to failure

Outlook

You are starting to export. This brings you into the first League of smaller and medium-sized enterprises. The export successes raise your economic stability and give your company a mental push. This is a good achievement and all your team can be proud of. Do not fool yourself, the first export successes do not mean, that you belong to the Champions League. Companies belonging to the Champions League worked hard for many years and adapted with time and experience.

Members of the Champions League are trend setters, they are copied by their competitors and they set truly international product standards. Personally, two times, I was part of the managing team leading our companies to this category. The path is closely connected with product design, management style, mental adjustment and a lot of work with the international structure. Not to forget about organization, CRM, competitiveness, communication and the famous image.

Talking about this step is not goal of this specific expert file.

Closing remarks

Writing this expert file, I hope that I can familiarize the essentials for successful export, to some companies. As a German, living in France, who loves the country and its people, I hope that this country is mastering its export crisis. I want to thank all entrepreneurs and managers who shared their experiences with me. Only with these people’s confidence it was possible to bring their companies to the road of success. Finally, I want to thank my family who always supported me during my intensive work.

China is synonymous with strong and secure economic growth. Indeed, so entrenched is this sentiment that commentators talk of Chinese exceptionalism; i.e.; that the usual rules of economics do not apply. But rules are rules. And there’s concern that China’s rapid build up of credit has left it vulnerable to a sharp slowdown. A very fragile China are in deep trouble that will impact globally!

Dragon’s Debt. China’s solution to the economic and export fallout from the financial crisis was to invest more at home.So it’s been consuming a strong cocktail of excess investment fueled by large debt. It’s a heady brew that leaves the country’s banks sitting on a high level of bad loans, as signaled last week. And the strains are beginning to show. As China faces this problem/major issues globally while trying to reform its economy, the best outcome is that growth will slow substantially. But there’s still time to avoid the worst. China`s issues will impact on global economies and effect growth!

UK`s Two Directions. Although the number of mortgage approvals fell in April, the average value of each approval rose. The UK housing market is currently experiencing two opposing winds. One is new mortgage regulations, sensibly aimed at ensuring borrowers are better able to afford a future rise in mortgage rates. The other is rising demand, supported by Help to Buy. So far the scheme has helped over 27,000 households buy a home, most of who bought properties valued at £250k or less. Banks lending to many very high borrowing proposals for houses and many overseas buyers just buying for investment and not letting the houses!

A stitch in time. No member of the UK Monetary Policy Committee (MPC) has voted for a rate hike for almost three years (since July 2011). But it looks like that will change before too much longer. In an interview with the Financial Times, MPC member Martin Weale said that if you want to raise rates gradually, then you have to start sooner. He said “we can wait a bit longer” but the implication is he will be voting for a rate hike before the year is out, possibly as early as August. If markets are correct, it will be the first half of next year before a majority of the nine-person committee joins him. Major challenges on bank rate rises will see many house borrowers very worried for the future!

And I’m feeling good. UK firms and households are feeling chirpy. May’s GFK consumer confidence index rose to its highest level since 2005. Although consumers are particularly pleased with the UK’s economic performance, as well as hopeful about the future, they’ve yet to see a marked improvement in their own finances. Likewise, the CBI growth indicator reported that British firms are experiencing the strongest growth in orders and activity since the survey began in 2003. We already knew the UK economy has a spring in its step. But few of us mind being reminded of our good points all the same. Growth based on UK government and domestic borrowing THEREFORE TROUBLE AHEAD WHEN THE UK BANK RATE RISES!

Do not panic. US output shrank by 1.0% on an annual basis in the first quarter, enough in normal circumstances to have us reaching for the panic button. But there’s no need. Firms running down their stocks accounted for a large chunk of the fall and the icy grip of winter on construction activity for most of the rest. Growth of 3.1% in consumer spending was a more accurate reflection of the economy’s health. And with the Purchasing Managers’ Index hitting a four year high in May, Q1 looks like no more than a blip. Domestic and Government borrowing are very high, so there will be major trouble ahead!

Bubbling along. US house prices increased by 10.3%y/y in March according to Case Shiller. That’s a little slower than the 11%+ rates recorded in the second half of last year but not much. Incomes are rising at a fraction of that rate, so house prices are becoming less affordable by the day. Yet with US long-term interest rates falling to their lowest levels in almost a year and mortgage rates following them, a frothy housing market could be with us for some time yet. Many challenges ahead with a flat housing market in the future! Will we see the same problems as we did in 2008?

Cosy. We’re used to reading about the high price of houses. But less attention is paid to the wider costs. London’s meteoric house price growth is having an effect on how many people are living in a typical house. The share of households with six or more people rose by a third in the 10 years to 2011. Cosy, as estate agents might say. Estate agents making a fortune again on the back of very high selling prices!

Crossroads. India’s economy grew 4.6%y/y in Q1. Although that’s a decent pace of growth by western measures, its low for a country at India’s stage of development. India’s most powerful economic weapon is a functioning democracy. However, the country has just elected a proven reformist as prime minister with a strong parliamentary majority. India’s problems/issues are a mirror image of China’s. It’s underinvested in infrastructure. That may be about to change. India running into economic trouble the same as China, therefore the impact is a double whammy globally!

Very Fragile China/Very fragile India! Globally, there is trouble on its way `big time`!

About the author: Colin is a former successful Managing Director of Transactional/Print Manufacturing Plants, Document Management/Workflow Solutions companies and other organisations, Former Group Chairman of the Academy for Chief Executives, Non-Executive Director, Mentor -RFU Leadership Academy, Mentor -Coventry University, Mentor -The Chartered Institute of Personnel and Development, helping companies raise their `bottom-line` and `increase cash flow`. Plus, helping individuals to be successful in business and life in general. Author of several publications, research reports, guides, business and educational models on CD-ROM/Software/PDF and over 1000 articles published on business and educational subjects worldwide. Plus, International Speaker/Visiting University Professor.

View Colin’s short bio

Napoleon’s Big Mistake – and how you can avoid repeating it

Napoleon Bonaparte, Emperor of France and military genius, was one of the most brilliant leaders that the world has ever seen. And yet he failed in his goal, and was overthrown. Why?

There’s a story about the battle of Waterloo, where Napoleon’s army was finally defeated. The general found a guide, a local farmer, who knew the lay of the land where the battle was to be fought. He trusted this guide when making plans for battle.

What he didn’t know was that the farmer was secretly a royalist, an enemy of the revolution. And so when Napoleon proposed to charge his heavy cavalry down a slope and into the English lines, the farmer said it was a good idea.

What Napoleon couldn’t see was that a narrow road lay at the bottom of the slope, hidden in a ravine. The farmer knew about it, but he didn’t.

And so the cream of the French army charged full-speed into a ravine, where they were promptly slaughtered by the English forces. It was one of the turning points of the battle.

What’s the lesson here? It’s not just a military lesson, but a business one as well! And it is about picking the right project manager. No matter how brilliant you (or your product) is, you can be undone on unfamiliar ground if you don’t choose your guides well. You need someone who knows the territory. And who you can trust. Why not pick one of the most trusted names when it comes to managing projects abroad?

About the Author: Waseem Hussain is the Founder & CEO of a services company with a specialization on business with India. Before, he was the business manager of a globally operating outsourcing company, after heading a joint venture between a Swiss and an Indian software development company. His key strengths are quickly grasping the clients’ situation, crafting executable strategies and implementing steps towards success. View his short bio