The Business Opportunities for SMEs in the Global Era · Supporters: Small and Medium Enterprise...
Transcript of The Business Opportunities for SMEs in the Global Era · Supporters: Small and Medium Enterprise...
05-ERA
70I-012FC
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8th APEC SME Business Network Promotion Forum
The Business Opportunities for SMEs in the Global
Era
<Research Report>
Tuesday, December 13, 2005
Place: Takamatsu City
Organizer: Japan External Trade Organization (JETRO)
Co-Organizer: Kagawa Bloc Council, Japan Junior Chamber, Inc.
Supporters: Small and Medium Enterprise Agency, Kagawa Prefectural Government,
Takamatsu City, Takamatsu Chamber of Commerce and Industry, Shikoku Economic
Federation, Kagawa Association of Corporate Executives, Shikoku Small and Medium
Enterprises Entrepreneurs Association of Corporate Executives, Shikoku Branch of
Organization for Small and Medium Enterprises and Regional Innovation, Shikoku
Bureau of Economy, Trade & Industry,
March, 2006
Japan External Trade Organization (JETRO)
Forward
The APEC (Asia Pacific Economic Cooperation) forum was proposed by the
Japanese government at the 5th annual APEC SME Ministers Summit held in
September of 1998 in Kuala Lumpur and was officially approved as an APEC
contribution project of Japan. The 2005 forum is the 8th time the event has been held.
This forum aims for mutual understanding and the promotion of business exchange
between SMEs in APEC regions and hopes to create new business opportunities and
promote industry. Every year when the forum is held and survey is implemented in
APEC regions and compiled into a report.
The theme of this year’s survey is “The Business Opportunities for SMEs in
the Global Era” and was conducted in interview format to learn how SMEs were able to
expand their existing business and find new business opportunities amidst advancing
globalization and industrial exchange without getting caught up in conventional
corporate activities and operation/business methods.
We hope that SMEs in the APEC region will be able to acquire some ideas and
hints for new business opportunities through this report.
Lastly, we would like to sincerely thank everyone who was involved in the
making of this report for their cooperation.
March, 2006
Economic Research Department
Japan External Trade Organization (JETRO)
Table of Contents
Japan ....................................................................................................................................................5
Japan Ground water Development Co., Ltd. (Yamagata) ................................................................5
Watec Co., Ltd. (Yamagata) .............................................................................................................8
Sakamoto Urushi Manufacturing Co., Ltd. (Fukushima) .............................................................. 11
Kaken Geneqs Inc. (Chiba)............................................................................................................14
Tecnos Co., Ltd. (Nara City, Nara Prefecture)...............................................................................16
Laplace System Co., Ltd. (Yawata City, Kyoto Prefecture)...........................................................18
Riko Co., Ltd. (Tondabayashi, Osaka-fu) ......................................................................................21
Kaaz Corporation (Okayama) ........................................................................................................23
Iris Co., Ltd. (Tokushima)..............................................................................................................26
Nissan Tokiwa Co., Ltd. (Tokushima) ...........................................................................................29
Maruha Bussan Co., Ltd. (Tokushima) ..........................................................................................32
Swany Corporation (Kagawa)........................................................................................................35
Futec Inc. (Kagawa).......................................................................................................................38
Australia.............................................................................................................................................40
AUSTRADE (trade promotion agency).........................................................................................40
CIC Secure.....................................................................................................................................42
Canada ...............................................................................................................................................44
Business Development Bank of Canada(BDC).........................................................................47
Dalsa Corp. ....................................................................................................................................45
Chile...................................................................................................................................................47
Asociación de Exportadores de Manufacturas de Chile A.G. (ASEXMA)....................................47
COSMETICA NACIONAL...........................................................................................................49
TRAVERSO S.A............................................................................................................................51
China..................................................................................................................................................53
ZXQYS (national development/reform committee for SMEs)......................................................53
Oceans Sports & Entertainment Marketing Ltd.............................................................................55
Beijing Tianzheng Information Technologies Co., Ltd. ................................................................ 61
China/Hong Kong...............................................................................................................................63
Hong Kong Small and Medium Enterprises General Association(HKSMEGA)......................63
Trade and Industry Department, Hong Kong SAR Government....................................................64
Indonesia.............................................................................................................................................65
Ministry of Cooperative, SME........................................................................................................65
Java Dini Art....................................................................................................................................67
PT Putrabali Adyamulia...................................................................................................................68
Terracotta Indonesia.........................................................................................................................69
South Korea .......................................................................................................................................66
Small and Medium Business Administration.................................................................................66
Nobtech Co.,Ltd.............................................................................................................................71
Malaysia..............................................................................................................................................80
Small and Medium Industries Development Corporation(SMIDEC)........................................80
Zeito Plastic Components Sdn Bhd.................................................................................................82
Mexico.................................................................................................................................................84
Underministry for Small and Médium Enterprises/Ministry of Economy......................................84
Red Interamericana de Comercio (RISCA) ...................................................................................84
New Zealand........................................................................................................................................89
New Zealand Trade and Enterprise..................................................................................................89
Interactive Technologies Ltd(ITL)……………………………………………………………..92
New Zealand Pharmaceuticals(NZP)……………………………………………………….…. 94
Peru.................................................................................................................................................. ..93
PROMPYME (El Centro de Promoción de la Pequeña y Micro Empresa; small/mini
company promotion center) ...........................................................................................................93
Alpa Exportaciones (Alpa Export Company) ................................................................................95
Consorcio Artesanias MERINO S.A.C. (Merino).......................................................................96
Philippines.........................................................................................................................................101
Department of Trade and Industry-RegionXI................................................................................101
HUBPORT INTERACTIVE INC. ................................................................................................103
Lane Systems Inc...........................................................................................................................105
Russia...............................................................................................................................................104
OPORA (National Russian SME Association) ............................................................................104
Ministry for Economic Development and Trade of the Russian Federation................................106
Medpharmservice.........................................................................................................................108
Singapore...........................................................................................................................................114
International Enterprise Singapore................................................................................................114
Ya Kun International Private Limited............................................................................................119
Chinese Taipei.................................................................................................................................. 118
Industrial Development and Investment Centre, Ministry of Economic Affairs.......................... 118
Small and Medium Enterprise Association, Ministry of Economic Affairs.................................120
Taiwan External Trade Development Council (TAITRA) ...........................................................122
Moxa Technologies Co., Ltd........................................................................................................124
Triad International Corporation ...................................................................................................126
Thailand.............................................................................................................................................133
Office of Small and Medium Enterprises Promotion(OSMEP)...............................................133
SME Trade Promotion Co., Ltd. ...................................................................................................134
United States of America...................................................................................................................135
US Market Access Center(formerly known as International Business Incubator)...................135
GeoVector ....................................................................................................................................133
Vietnam............................................................................................................................................136
Agency for SME development-ASMED .....................................................................................136
Ha Tran joint Stock company(A-Design).................................................................................143
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Country: Japan - SME
Company Name Japan Ground water Development Co., Ltd. (Yamagata)
Industry Non-sprinkling snow removal, boring construction, soil/ groundwater
remediation
No. of employees 190(Including related companies)
Overseas offices None
Company URL http://www.jgd.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
JGD is proud to hold 50% of the market for the sale of non-sprinkling snow removal systems
for melting snow on roads, etc... While continuing this core business, JGD also formed a
collaborative business pact with Walsh in the US and introduced technology that has enabled us to
engage in the remediation of contaminated soil and ground water. Through long term training at
Walsh when the agreement was formed, annual employee training at Walsh, and the invitation of
Walsh employees to speak at lectures in Japan, JGD has obtained know-how and technology
related to the decontamination business, an industry that does not exist in Japan. As a result of
recent improvements environmental awareness and the establishment of environmental laws, etc...,
the number of requests JGD receives for decontamination work is steadily increasing. The
technology JGD introduced from Walsh received much praise at The 2005 Global Environmental
Protection: Soil and Ground Water Remediation Technology Expo held at Tokyo Big Site and was
have received business inquiries from end users who up until now we have not done direct
business with.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
JGD met Walsh in 1997. At the time, employees were dispatched to the JETRO Denver, CO
office, a sister city of Yamagata prefecture, and JGD had been looking into how they could
develop each others' business prospects. It was a time when environmental issues were starting
to gain attention in the prefecture and as a Yamagata Prefecture project, JGD was dispatched to
Denver and was introduced to several environment related companies. One of these companies
was Walsh.
The sale of non-sprinkling snow removal systems is largely dependent on public works.
Therefore at the time, JGD had been searching for a new industry in which they could make use of
their technology. Meanwhile, Walsh had been expanding overseas since 1992 and while they had
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succeeded in entering the Japanese market in the same year (a bio-soil remediation project with
The Japan Research Institute, Limited), they had been searching for way to gain a better foothold
in the market. Since it was deemed that cooperation between the two companies would be a good
thing, they signed a collaborative business agreement in 1998. The training that JGD (4
employees) received for six weeks at Walsh after the signing of agreement was extremely detailed
and was a large asset to them.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
The soil remediation technology using horizontal wells that JGD received from Walsh was not
being used in Japan. As a result, JGD had problems such as at times not being able to use the
machinery in confined spaces found often in Japan. In addition, since the soil remediation business
was a new area for JGD at the time there were not a lot of people who knew about it and we did not
get many business inquiries. However, JGD increased awareness by inviting Walsh to come speak
in Japan and its ground water remediation technology gradually got a good reputation as a result of
their competitiveness that was achieved through the technology obtained from Walsh. Furthermore,
the fact that JGD had this technology meant that the trust in their technology increased and they
experienced an indirect benefit of receiving more business inquiries in the other industries they are
engaged in.
However, it is common practice in Japan for a consulting company to be liable for the work that
they implement in regards to that consulting and since there are no clients who will not pay for just
consulting work Walsh's entrance into the Japanese market has not gone as they had hoped.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
At a time when environmental issues were gaining more and more attention, JGD focused their
attention on environmental technology before other companies and formed a relationship with a
foreign company that had such technology. After that, as a result of the enactment of the Soil
Remediation Law in 2003, it became a requirement to implement a soil survey in the case of
transferring land once used for factories that had used specific harmful substances, to the public.
After the enactment of this law JGD saw an increase in business inquiries from banks who had
acquired real estate as collateral and also from real estate companies who sell land, etc..., and they
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think they will continue to increase. When enacting this law, since the environmental ministry had
selected over 2000 companies as certified survey organizations, competition became quite fierce.
At present they are seeing companies that do not have good technology being gradually weeded out.
Since JGD’s technology is different from that of other companies, and since they have high
competitiveness from the standpoint of cost, they think that they will be able to survive this fierce
competition. In addition, in 2005 JGD linked technologies with a consulting company that has rich
know-how in the area of soil remediation measures, In Situ Solutions Co., Ltd., and are busy
improving their technology.
6. Future expansion of your business and your company's vision
The public works industry has been showing a tendency to shrink as of late and while JGD is
trying to strengthen their sales directed at the private sector, profits from non-sprinkling snow
removal systems are dropping. Presently, sales from non-sprinkling snow removal systems account
for about 80% of their total sales revenue which is 3.56 one billion yen (August, 2005), and hot
spring excavation and soil remediation business accounts for 20%. Annual sales revenue for their
solar remediation business is approximately 100 million yen, but what they aim to expand that to
300 million yen and make their sales ratio 7:3.
It is expected that the soil contamination survey/remediation market will greatly expanded the
future (according to estimates by the Soil Environment Center in the year 2000, a 13.2 trillion yen
latent market exists. However, these figures were calculated based on the number of latent
contaminated sites and also includes sites that are not required by law to be surveyed or remediated.),
and JGD expects that their business will expand accordingly.
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Country: Japan - SME
Company Name Watec Co., Ltd. (Yamagata)
Industry Manufacture/sale of ultra-small CCD cameras
No. of employees 58
Overseas offices US, Taiwan, China
Company URL http://www.watec.net(Overseas)
http://www.watec.co.jp (Domestic)
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Watec sells small CCD cameras to 60 countries all over the world and overseas sales accounts
for approximately 80% of their 1.2 billion yen in total annual sales. Their products are not only
widely used all over the world, but are also utilized for security in such places as banks, museums,
police stations, government agencies, department stores, etc..., and in many different fields, an
example of which is test use on rockets. At present, they do not sell our products through a
commercial establishment and have sales offices in the US and Taiwan, and a representative office in
Beijing.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Watec was established in 1987 by approximately 10 specialists including a president who had
worked in the camera related industry. At the time surveillance cameras used TV tubes and were
quite large. They succeeded in developing small CCD cameras by replacing TV tubes with CCD and
miniaturizing internal circuitry. Because of their small size these CCD cameras can be used not only
for surveillance but for many other purposes as well.
These small cameras were attached to the helmets of skydivers at the opening ceremony of the
Seoul Olympics and broadcasted images to the entire world. As a result Watec received many
business inquiries from overseas. Since at the time Watec only consisted of engineers, they engaged
in overseas sales through a corporate firm without knowing anything about sales methods. After this,
in an effort to strengthen their overseas sales, they established a subsidiary in the US with the help of
corporate firms in 1990. After breaking ground in the US, Watec actively engaged in expanding
overseas by establishing a subsidiary in Taiwan and a representative office in China. Furthermore, at
the time Watec had been engaged in OEM supply, but not anymore.
3. Problems you experienced around the time you started business and how you solved those
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problems (personnel deficiency, establishment of internal systems, deficiencies in information
gathering, capital procurement, language barriers, etc...)
Since Watec mainly targets overseas markets they have applied for patents overseas with regards
to fundamental technology, including patents related to miniaturized circuits for CCD cameras.
However, since they cannot establish a law department due to cost issues, it is difficult for Watec to
follow up on pirating countermeasures and they have suffered much damage from pirated products
in Taiwan, and Korea, etc... Recently they have heard that pirated products produced in China are
also in the market. Since pirated products cannot compare to our products in terms of quality they
continue to receive business inquiries from those users who understand our technology, but pirated
goods are still a problem.
Watec used to have our headquarters in Kawasaki City, but moved it to Tsuruoka, the birth place
of our current president, in 1995. Since they mainly deal with overseas clients they did not anticipate
that moving their headquarters to a more remote area would cause major problems. But, in reality
they did encounter many problems. Customs clearing and distribution is not convenient but their
biggest problem is a lack of personnel. Is very difficult for Watec to procure engineers that can
engage in creative development, personnel needed for overseas sales, and also personnel needed in
the creation of catalogs (designers, copywriters, translators, etc...). As a result of these problems,
they think that we may have no choice but to establish an office in Tokyo in the future.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Yamagata prefecture introduces Watec on their company PR homepage. In addition, in regards
to recruiting engineers, marketing, and development, etc..., Watec is deliberating gaining assistance
from the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN, Tohoku
(Sendai).
5. Reason for success of your aforementioned business
In the security related business, most leading corporations sell a whole security system that
includes cameras as one part of that system. As a result, there were no leading manufacturers that
were engaged in miniature CCD cameras. That is why at the time, Watec decided to focus their
energy on the new technology that was CCD and had the foresight to develop the world's first
ultra-miniature CCD camera. In contrast, systems are not sold as a whole overseas, and consulting
companies select cameras, etc..., depending on the circumstances, so as a company that specializes in
miniature CCD cameras, Watec became quite highly evaluated. The fact that they are very
meticulous in their development of miniaturized CCD cameras is the reason why their technology
became the “only one” in this field. Watec’s desire to “perfect technology” continues to this day, and
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they are developing CCD cameras to be installed in man-made satellites and hot air balloons that fly
at an altitude of 20 kilometers for university, etc..., experiments. While these developments do not
directly link themselves to the market, they do believe that the reliability of their products to
withstand extreme cold and the harsh environment of space will serve to heighten the reputation of
their technology.
6. Future expansion of your business and your company's vision
Watec desires to continue to expand their overseas business. They expanded their subsidiary in
New York and aim to locally incorporate their representative office in China. In Europe, especially
since the formation of the EU, since the market has become unified, the elimination and
consolidation of companies in each country that they had been entrusting their sales to continues,
and each sales company has taken it upon itself to engage in cross-border sales. With this type of
situation, it is not impossible that they may lose the trust of their users by entrusting their sales to
companies in each country in such a disordered fashion. Europe accounts for 25~30% of their
profits, and they plan to establish an office/subsidiary in Europe in the future that can collectively
handle their business.
In addition, in regards to manufacturing/development, Watec continues to examine how they can
increase their production efficiency in Japan, a country where employment costs are high. They have
no plans to move production overseas.
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Country: Japan - SME
Company Name Sakamoto Urushi Manufacturing Co., Ltd. (Fukushima)
Industry Manufacture/sale of Urushi and Urushi ware. Planning/sale of industrial
products that use Urushi.
No. of employees 30
Overseas offices None
Company URL http://www.eyes-japan.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
After starting business by offering lacquer processing services to the fountain pen manufacturer,
Parker, they were able to collaborate with many foreign corporations on products such as utensils
made by Crystal and the interiors of airplanes made by Boeing and have succeeded in applying
lacquering technologies to industrial products. Their lacquering technology is used for many
industrial products such as on the outside of note PCs, cameras, mobile telephones, CD players, and
lighters, and for car interiors, etc...
In addition, Sakamoto Urushi’s technology/design potential was international acclaimed when
their creation, “Happening”, an exhibit designed entirely out of lacquered cardboard and shown at
overseas trade shows, received the New York Museum of Modern Art’s Design Award and was
added to its permanent collection.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Sakamoto Urushi was originally a lacquer wholesaler, but when their current president inherited
the business 30 years ago he felt that it was necessary to produce something in order to aim for
stable business. Before WWII, since lacquer was economically controlled as a military substance, if
you look at industrial statistics you will see just how utilized it is. According to these statistics,
70~80% is used in industry, so he thought to apply lacquer to industrial products.
Sakamoto Urushi had not originally planned on marketing their product overseas, but Japanese
companies at the time could not grasp the concept of putting high added value on lacquer. Just
around that time, (1980’s) the fountain pen maker, Parker, was having trouble with pirated products
in China. In order to combat this, Parker aimed to increase the quality of their products, and this
thinking matched Sakamoto Urushi’s strategy and ideas at the time to use lacquer to increase added
value, so they engaged in co-development of a lacquered fountain pen. With the success of this
lacquered fountain pen, the reputation of Sakamoto Urushi’s technology spread by word of mouth
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and interest in lacquer work from overseas manufacturers started pouring in.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
The thinner added to lacquer can be procured virtually anywhere and in consideration of
transportation costs it is cheaper to procure it locally. Regardless however, high-quality product
manufacturers in Europe insisted on purchasing it from Sakamoto Urushi. At the time they were
perplexed as to why European companies were so particular in their traditions, and learned a lot.
However, exporting thinner turned out to be quite troublesome due to the restrictions involved.
When Sakamoto Urushi received a request to do the interiors of first class from a US airplane
manufacturer they encountered difficulties with the strict heat-resistance tests imposed by the US
Federal Aviation Administration. However, since these restrictions were so rigorous they did
encounter the benefits of having their technology highly praised and seeing entrance by other
companies fall to the wayside, so they can’t categorically say that harsh restrictions were a bad thing.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Sakamoto Urushi developed technology for melting metals such as aluminum which is quite fire
retardant and evenly spraying lacquer on the surface of FRP (fiber reinforced plastic) used in the first
class interiors of airplanes, however this industry became a certified industry of the SME Creative
Endeavors Promotion Act of 2002. This technology was chosen in 2005 as the recipient of the
“Japan Prize for Creativity” given by the Minister of Economy, Trade and Industry.
5. Reason for success of your aforementioned business
From the moment they started making things, Sakamoto Urushi decided that they “were not going
to make anything that could be made overseas” and aimed for high-added value through creation of
their own technology. This is because the current president traveled to Taiwan to undergo lacquer
training and felt that, “we will not succeeded if we are doing the same thing” when he came in
contact with the local artisans. This attitude remains unchanged and this unwavering ideal is one
reason why they have succeeded in becoming an internationally praised “only one corporation”.
In addition, always doing business with foreign companies through commercial firms led to their
success. By entrusting all other matters to others, they have been able to concentrate on the
development of their lacquering technology which is their main business. When negotiating with
foreign companies commercial firms act as a buffer which enables smooth transactions.
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6. Future expansion of your business and your company's vision
Through doing business with foreign companies, Sakamoto Urushi learned from traditional
European craft manufacturers that the secret to success is balancing industrial products and
traditional crafts. The successful European traditional craft manufacturers are the ones who have
retained a traditional craft as their core business and apply it to industrial products. Sakamoto Urushi
continues to secure profits by applying their technology to industrial products while pursuing the
“beauty” of traditional craft technology.
They do not limit their transactions to overseas, however when applying lacquering technology to
industrial products they do employ a collaborative strategy with leading manufacturers. This is
advantageous for them in order to put their energy into lacquering technology. In actuality, recently,
they have formed partnerships with Japanese leading appliance manufacturers and plan to exhibit
appliances in foreign trade shows. In addition, even if the collaboration is with a domestic
manufacturer, in the end these partnerships with leading companies target the entire world. In
addition, due to the nature of their products they are not considering entrance into any other foreign
markets except the present Europe and the United States.
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Country: Japan - SME
Company Name Kaken Geneqs Inc. (Chiba)
Industry Manufacture/sale of DNA microalley, etc.., chips and subcontracting service;
development/manufacture/sale of bio-devices, gas injection molding devices,
nitrogen generating devices, etc...
No. of employees 26
Overseas offices Sales through agents
Company URL http://www.kakengeneqs.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Geneqs develops/manufactures/sells bio-related devices such as gas injection molding devices
that inject high pressure nitrogen gas and maintain uniform pressure during the injection molding of
resin, and devices that manufacturer chips (microarray) that analyzed DNA and protein information
(microarrayer), etc....
In the beginning of 2004 they had their first order for a gas injection molding device from China.
In only two years since then exports have expanded rapidly and at present one third of their sales of
gas injection molding machines comes from overseas.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Since the domestic sale of the same devices has dropped with the moving into far markets of
automobile, appliance, and OA device manufacturers, Geneqs’ principal clients for injection molding
devices which is their main product, the company decided that they could not survive by only doing
business domestically and started entering foreign markets in 2003. After gathering information on
firstly China, and ASEAN countries, they fixed their sights on clients who they felt had a demand for
gas injection molding devices from amongst Japanese based companies in foreign markets and the
president and sales manager traveled to each country to actively engage in sales activities.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
The company had no information and faced language, legal, and cultural barriers. They became
painfully aware that offering after service maintenance when selling machinery and overseas is the
largest need of the customer, but had much trouble in finding an agent that could perform the
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maintenance.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
They participated in JETRO seminars and conventions and gathered overseas information on
China and the ASEAN countries, etc....
When traveling on business trip to China, a current JETRO adviser fluent in Chinese accompanied them as a specialist, as part of support from the Chiba Prefecture Industrial Promotion Center, in order to provide help with negotiations.
5. Reason for success of your aforementioned business
Their overseas sales performance up to now is the result of the sale of gas injection molding
devices to Japanese corporations and is viewed as domestic performance.
6. Future expansion of your business and your company's vision
Their future goals include entrance into foreign bio fields and the expansion of sales channels by
reaching out to local customers. They would like to sell state-of-the-art bio devices to research
institutions in Singapore, China, and Korea, etc.
With sales through an agent, the agent is not going to always be putting energy into just our work,
so ideally it would be best to engage in direct sales. While we search for agents in each country
that we can continue to trust, we also continue to deliberate on how we enter foreign markets.
Our president's motto is, “unleash unlimited knowledge and continue to create corporate profit.”
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Country: Japan - SME
Company Name TECNOS Co., Ltd. (Nara City, Nara Prefecture)
Industry Development/manufacture, etc... of liquid crystal evaluation devices
No. of employees 43
Overseas offices None
Company URL http://www.tecnos-netc.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Established in 1990. 60 million yen in capital, 900 million yen in sales. Developed a liquid
crystal optical characteristic evaluation device that can measure the view angle, brightness, and
response speed, etc., of liquid crystal displays in 1993. Samples were highly praised by leading
liquid crystal manufacturers and they succeeded in deliveries to leading manufacturers in the same
industry thereby solidifying their business foundation. Developed a liquid crystal integrity testing
device used to evaluate defective lighting and liquid crystal displays, etc., in 1997 continue the
development and production of liquid crystal related testing devices such as a liquid crystal film
thickness Mura testing device, etc. during the year from 2000 to 2001. In 2001 they established
their own research center within Kumamoto University, one of their research partners, and is
presently considered a leader in the world of partnering industry with the world of academia.
Overseas transactions began with the sale of an optical characteristic evaluation device to a
Taiwanese corporation a few years ago. They formed sales agent contracts in Taiwan, Korea, and
China. They also plan to establish their own office in Taiwan and Korea in the future. Out of 10
liquid crystal manufacturers that used to exist domestically, all but one have moved their production
overseas in recent years. Their foreign sales share is presently approximately 60%, and they aim to
make that approximately 80% in the future.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
President Yaedzu was in charge of the AV business at a leading electronics manufacturer when he
started to question the future of that business and suggested entering the new field of scanners. But
when his proposal was rejected, that rejection was one of the factors that led him to retire from the
same company at age 46 and go independent. Using experience and connections he had at the time,
he started excepting research work from leading manufacturers. In 1992 he succeeded in
developing a full color scanner which led to the establishment of his business. After that, he
entered the field of liquid crystals which was forecast to be a rapidly growing industry in the future
17
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
The full color scanner developed in 1992 employed state-of-the-art technology at the time, and
commercialization was abandoned when it was determined that one billion yen of investment was
necessary. They were forced to sell the technology to a leading manufacturer. After that, the
company put as much of their energy as possible into employing a product development strategy that
put emphasis on the needs of the customer.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
1996: Business Certified by Ministry of International Trade and Industry in accordance with the
SME Creative Endeavors Activities Act
2001: Certification of new business field development implementation plan by Ministry of the
Economy, Trade, and Industry in accordance with New Business Creation Promotion Act.
5. Reason for success of your aforementioned business
Their outstanding technological power through collaboration with universities, and there sales
position which meticulous responds to the needs of the consumer has led to high praise from
customers.
6. Future expansion of your business and your company's vision
With the recent explosive expansion of the liquid crystal market, and increasing size and
resolution of liquid crystal displays, the expectation for products from this company that aims for
original and precise technological development that leading companies cannot do, is high. In
addition, through his experience as a special lecture at universities, etc., president Yaedzu has great
interest in the nurturing of young engineers. Concerned with how students must put so much
energy into part-time jobs, he aims to convey to students the importance of research and
development through collaborative research with universities, etc.
18
Country: Japan - SME
Company Name Laplace System Co., Ltd. (Yawata City, Kyoto Prefecture)
Industry Development, etc... of solar energy measuring and simulation software
No. of employees 26
Overseas offices Germany (Freiburg), US (Silicon Valley)
Company URL http://www.lapsys.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Established in 1990. 22 million yen in capital. Main business includes the development/sale of
measurement systems, simulation software, and display systems, etc., related to recyclable natural
energy reduction such as solar energy, etc. Pioneered a new market in 1997 with the development
of solar energy measurement software called “Solar Link”, and solar energy output simulation
software called “Solar Pro”. Sell to various clients such as domestic mainstream solar energy
module manufacturers, House manufacturers, construction companies, and government agencies,
etc., and the number of units of “Solar Link” that have been established as expanded to
approximately 600 places (domestically). As a result of having “Solar Pro” receive high acclaim in a
trade magazine that introduces new German energy technology, as the only software that can do
advanced three-dimensional shadow analysis in January 2001, in 2003 Laplace Systems exhibited
their technology at an international solar energy exhibit called “Intersolar” held in Freiburg. They
established an office in Freiburg in 2004 and are working to pioneer the European market. In 2005
they opened another office in Silicon Valley in the United States. They also have sales agents in
Korea, Taiwan, Thailand, and Italy.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
When the company was first established it was involved in undertaking science and technology
related measuring software work such as construction and textiles related work, but as concerned for
the environment grew the started receiving more requests to do measurement software work related
to solar energy from around 1995 and felt that if they were to standardize and sell their own
independent software that the market would have more than enough potential to grow. President
and founder, Mr. Horii, specialized in mechanical engineering and before going independent
developed software for videogame manufacturers. He has a unique presence in the new field of
fusing science and technology related to accurate measuring software with easy-to-understand
software that emphasizes visuals.
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3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Entrance into the German market was the result of active enticement from Freiburg city and a
move to the city was preempted by much buzz. Market research, the fostering of sales
representatives, study of Europe's distinctive distribution channels (in particular Germany), and how
to go about doing business at exhibitions are future issues to consider.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
2001: Certification of business by Ministry of the Economy, Trade, and Industry in accordance with
New Business Creation Promotion Act.
2002: Was certified to receive creative technology research development subsidiaries from Kyoto
prefecture.
2003: Adopted as SME General Business Group R&D consignment theme
2005: Adopted as Japan External Trade Organization (JETRO) “Venture Incubation in USA”
project.
5. Reason for success of your aforementioned business
As concern for environmental issues grew, from the middle of the 1990s solar energy started to
gain attention as a renewable energy source and the solar energy market for government agencies
and homes grew. Software for simulating and predicting the amount of solar energy output and the
software that actually measures the performance of power generation systems actually installed adds
3-D animation to the companies unique accurate data measurement performance and is characterized
by display functions that are easy to understand just by looking and have received high acclaim in
niche fields in the measurement software market.
6. Future expansion of your business and your company's vision
Domestically, since the market for environmental education is expected to grow, Laplace Systems
is engaged in developing teaching materials for schools that uses their characteristic technology that
is “easy-to-understand by looking”, and also in the information transmission station field. Overseas,
the US market is their next target and there presently pioneering that market with an emphasis on
California State. In the United States, awareness about environmental issues exceeded the
company's predictions and in addition to a strong demand to avoid risk in the wake of last year's
soaring oil prices and the energy crisis that occurred a few years prior, the fact that a support system
20
for venture companies like Laplace Systems is in place will give them the push from behind that is
needed.
21
Country: Japan - SME
Company Name Riko Co., Ltd. (Tondabayashi, Osaka-fu)
Industry Manufacture/sale of industrial floats and level switches
No. of employees 130
Overseas offices None
Company URL http://www.riko.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Riko is the world's second-largest dedicated manufacturer of industrial floats and produces
approximately 36 million units annually. 60 million yen of capital, and this term is sales revenue is
expected to be approximately 1.2 billion yen. Products are widely used in many things from
automobiles, motorcycles, ships, airplanes, and industrial machines, etc., to personal fan heaters, etc.,
to devices that measure amounts of remaining fuel, and in FA automated lines, etc. Products are
sold overseas in 30 countries/200 companies, and exports account for approximately 30% of sales
revenue. Overseas sales are done directly with Germany, France, Czechoslovakia, the US, and
India, etc. Whereas they deliberated overseas production in China and Vietnam about three to four
years ago, since the risks associated with building a factory were to great, they decided to expand
their present factory at headquarters. Whereas production in developing nations is attractive from
the point of view of using local personnel in labor intensive processes such as product inspections,
and inspections, it was judged that the risk was too great due to the large amount of facilities
investment needed for float production. However, they have left themselves room to examine
technological partnerships and mergers with corporations in developing nations in the future.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
President Umezu, who had been working for a synthetic rubber manufacturer, went independent in
1965 and established Riko. At the time the company was selling products from other companies, but
after learning about the product called “floats” in-house production was started two years after
establishment. They succeeded in developing a high-quality float called the “rigid closed-cell foam
float“ made from mostly NBR (synthetic rubber) that is superior in endurance, oil resistance and
processing and entered the market. In 1970 their product was adopted in the oil stove market and
their sales share increased. As a result of demand from markets with small lots and many varieties,
Riko was able to accumulate know-how and gradually improve their technological ability.
Currently, approximately 20 to 25% of the automobiles produced in the world (approximately 64
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million cars) use Riko floats.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
When Riko entered the market there were about 15 competitors and since it was not easy to
increase sales as a generic manufacturer, they searched for a way into foreign markets and started
exporting to Europe and United States in 1983. In addition, since floats are low in unit price and
have thin margins, Riko entered the level switch market that uses floats at the same time and
increased added value.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
Currently they have only one domestic competitor and that company has moved production to a
developing nation. While other companies in the same industry handle a wide variety of synthetic
rubber products, Riko’s main reasons for success are that they specialized full production by
concentrating capital, personnel, and technological ability, quickly entered foreign markets and
expanded sales channels, actively increased added value by developing products that could be used
in level switches, internally developed an automated lines for their own factory, etc., and engaged in
efficient investment, etc.
6. Future expansion of your business and your company's vision
Compared with 20 years ago, the unit price of a float for measuring fuel in an automobile is
approximately half the price, and the market is demanding a further reduction in prices. Their
future strategies include increasing efficiency, expanding the level switch field, and pioneering the
North American market and the Chinese/Southeast Asian/Indian markets that are showing
remarkable growth.
23
Country: Japan - SME
Company Name Kaaz Corporation (Okayama)
Industry Lawn mowers, cutters, automobile tuning parts, golf clubs
No. of employees 101
Overseas offices Taiwan
Company URL http://www.kaaz.co.jp/
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Currently, overseas sales accounts for approximately 80% (of that, 60% is sold to Europe) of the
total 9 billion yen in sales from cutters and lawn mowers which are Kaaz’s main products. As a
result, they are always aware of sales overseas when developing products, have obtained
international safety/environmental standards such as the EU’s “CE Marking” and the US’s “ANSI”
and as a result of their dedication to quality and their sales initiative, the “KAAZ brand has received
extremely high praise overseas being chosen “Performance #1” by a trade publication survey in the
UK and the US, and “Recognition No. 3” by a French trade publication.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Kaaz Corporation was founded in 1922 by the father of the current president, Mr. Kazunari
Katsuya, and manufactured engines for agricultural use under the name “Doi Industries” and was
one of the leading domestic manufacturers in that industry. When president Katsuya joined the
company in the 1960’s the agricultural engine industry was in trouble as a result of large companies
taking control, so Kaaz started a new business in the field of cutters and lawnmowers, their present
main products. President Katsuya says even today that, “instead of engaging in low profits and high
turnover by being a subcontractor for larger companies, it is important for an SME to engage in
development, manufacturing and sales and to be competitive by producing a product under your own
brand that has high added value”. When he first visited Europe, President Katsuya got a lot of ideas
from overseas brand cutters and lawnmowers he saw on the market, developed his own product
through trial and error and entered the same market in Japan, which was a niche market, with his
own quality brand product.
However, in Europe and the US there are a lot of houses with yards that need daily upkeep and
cutters and lawnmowers gained popularity to the point where every household had at least one,
whereas in Japan, where there are not many houses with yards, the demand was limited. Impressed
with the designs and colors of products he saw in Europe, President Katsuya became infatuated with
24
overseas markets and when becoming president in 1970 immediately turned his eye to the foreign
market, single-handedly researched sales channels in every country in Europe, busily engaged in
sales to agents and eagerly sought to gain demand for his products through exhibitions at overseas
trade shows.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
In the 1970s when Kaaz entered the cutter and lawn mower market, the Japanese government had
just started to earnestly promote exports and it was not easy for SMEs to pioneer overseas sales
channels. However, as represented by its highly durable body, Kaaz’s products were from 20 to
30% more expensive then products from European and US manufacturers as a result of Kaaz’s
pursuit of high-quality, and it took time and a lot of perseverance to get overseas markets to
understand just how good they are.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
President Katsuya says, “It takes at least five years to develop a new product and get it selling
well. Therefore, during their time at the company each employee may only be involved in about
five to six projects of which if only half succeed would be a good thing. That is why employees
must not be afraid to fail, and must engage in their work with passion.” He also states, “you can start
anything if you always do work at your desk. You always have to be looking at new things and
hearing the opinions of the user and have the awareness to be able to use that in future work,” which
is why the president and employees spend much time and cost to go to domestic and international
exhibitions and sales clients.
The success of overseas sales of Kaaz can be mainly attributed to a strong passion for quality
and for their own products, constant movement, and the fact that president Katsuya’s belief of
always having to try new things is conveyed to the employees.
6. Future expansion of your business and your company's vision
Kaaz is also actively challenging itself in new fields in addition to its main force cutters and
lawnmowers. The transmission for Kaaz’s lawnmowers is supplied to lawnmower manufacturers
in Europe and United States, and it is number one in terms of share in the world in that field. In
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addition, Kaaz is leveraging the technology gained from their lawnmower transmissions and has
entered the fields of differential gears for racing cars, etc., and tuning parts with the eldest son and
Executive Director Masakazu Katsuya leading the way. Currently, sales revenue from these fields
is only about 5% of total sales revenue, however Kaaz has exhibited at the world's largest
automobile parts trade shows, “EQUIP AUTO 2003” (Paris, France, 2003), and “Automechanika
2004” (Frankfurt, Germany, 2004) (JETRO, Okayama prefecture, and Okayama Prefecture Industrial
Promotion Foundation had a joint booth), is excavating agents in Europe through these trade shows
and gradually increasing their sales in foreign markets in these fields. In addition, recently they have
also entered the golf club market.
26
Country: Japan - SME
Company Name Iris Co., Ltd. (Tokushima)
Industry Manufacture/sale of women’s undergarments
No. of employees 24, Domestically
Overseas offices China (Shanghai, Xian) (7 companies in all)
Company URL http://www.jp-iris.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Iris, an undergarment manufacturer whose main products are women's shorts, and brassieres, etc.,
led other undergarment manufacturers in 1991 and entered the Chinese market. In the end of 2002
they finished transferring their production function to China and kept only their headquarters,
planning/development, and sales departments in Japan. OEM (original equipment manufacturing)
supply to domestic leading undergarment manufacturers accounts for 70% of products, and
approximately 30% of Iris’s products are sold in the Chinese market. They pioneered the Chinese
market early on and have 140 direct sales offices in apartment stores in every region such as
Shanghai, Tianjin and Beijing, etc. In China, in addition to their main business they also are
engaged in the car-rental and repair business, taxi business, real estate development, and livestock
pharmaceutical manufacturing with a group corporation of seven companies being run in Shanghai
and Xian. Annual sales revenue for August 2004 was approximately 2.2 billion yen.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Located in a rural area with a small market, Iris desired to engage in OEM supply to large
manufacturers from the time of its establishment, and acquired orders from Gunze and Wacoal by
brining in independently developed undergarments.
However, when there price competitiveness in the domestic sewing industry dropped upon
entering the 1980s, Iris began deliberating on moving their production overseas. In 1984 they started
entrusting manufacturing to Korea and Thailand and shifted production to China which became low
cost after the rapidly appreciating Yen, and then to Shanghai, Guangdong and Tianjin from 1988.
Based on this experience, Iris established there 100% subsidiary Shanghai Iris Clothing Co., Ltd. in
1991 and started production in 1992. The entrance into Shanghai was due to confidence in the
expansion of development plans for the Pudong region announced in 1990. Entrance by Iris was
greatly welcomed by the city of Shanghai since it was a time when foreign investment and activities
had dropped dramatically due to repercussions from the 1989 Tiananmen Square incident and
27
running of the business was quite smooth.
They started local sales in 1993 and opened up direct sales stores in Isetan. Since investment
was approved under the conditions that it be over 70% in exports, and under 30% in domestic sales,
Iris had from the very beginning been thinking about local sales. They opened up direct sales
stores in department stores in areas such as Tianjin, Beijing, Wuhan, Halpin and Changsha and grew
to have 140 stores nationally.
In China, in parallel with their main business, they engaged in other fields as mentioned earlier. In
every field they took ideas from local partners and started business by merging with those partners.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
While Iris’s business in China is diversified it is also being constantly organized at the same time
and six companies have already been closed. There are times when companies must be closed as a
result of certain circumstances involving the partner, but the main reason is change in the market
environment. For example, a foreign consulting firm that was the first start business in 1993 and
helped a total of 37 companies enter the Chinese market closed in 2002. The reason for the close was
that due to a rapid influx of domestic and foreign capital into the Chinese market, the
investment/operation environment changed dramatically and entrance into the Chinese market was
not being recommended. They said that, “if you are trying to bring technology that is applicable all
over the world that’s one thing, but if you want to enter the Chinese market just to cut costs you
should reconsider.” President Sasaki feels that, “the key to business in China is (1) taking and
managing risks, (2) fighting with an invisible enemy and (3) having the strength to do so, and being
able to handle unforeseen troubles. In particular, risk is increased in recent years and you need to do
market research.”
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
What is the secret to Iris’s business success in China? According to president Sasaki it’s, (1)
entering the market early when there is less competition, and (2) specializing in differentiated
products and higher-priced products that are difficult for other companies to copy. In addition,
building a system geared for the domestic market, the Chinese market, that can deal with demands
for small lots and large variety, (3) constructing a direct sales network for the Chinese market, and
28
investing an amount approximate to 10% of annual sales into advertising along with doing detailed
research, (4) leading factory management and production to the Chinese, and building an
autonomous operation system. Production is done totally at the local level, and the work on the
Japan side is limited to headquarter functions, planning/development, and business operations.
6. Future expansion of your business and your company's vision
Iris is now considering drastic changes in the field of women's undergarments. Present annual
production volumes are: first run 1.5 million women's shorts, and 600,000 brassieres. Out of second
run: warm underwear, 280,000 “Danren”, and 15,000 “Danren X” are produced and indigenous
varieties are still core. However, a lot of foreign investment and Chinese capital is being poured into
the indigenous varieties area and competition is growing fierce. Among these are large companies
that have large stocks and regualry announce new products, which is putting a huge burden on SMEs
trying to survive. That’s why Iris is going to shift to “Danren” and “Danren X” that can keep
products more expensive, diversified, enable lower production volumes of more varieties and take
advantage of short cycles, and they may have to consider abandoning indigenous varieties all
together. Furthermore, they also have a plan to strengthen commercial firm function and enhance
their lineup at “Aireiito” direct sales stores. They are going to establish a trade company in
Shanghai's Waigaoqiao Free Trade Zone and import/sell foreign products other than women's
undergarments.
In 2002 Iris developed warm underwear using Toyobo’s patented fiber eks (heat generating fiber).
Targeting local needs that demand thin and warm underwear, it is sold under the brand “Danren X”,
and it has been praised as fitting good and being fashionable. They have plans to develop new
products that will follow “Danren” and are putting a lot of energy into promotion such as holding
fashion shows in Beijing, Shanghai, Tianjin, and Wuhan in October 2003.
29
Country: Japan - SME
Company Name Nissan Tokiwa Co., Ltd. (Tokushima)
Industry Clothing manufacturer and staffing outsourcer
No. of employees 310 (Domestically, 280; Overseas, 30)
Overseas offices Shanghai(FUNCTION Co., Ltd.)
Company URL http://www.nissantokiwa.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Nissan Tokiwa, a sportswear, women's clothing manufacturer that mainly deals in the OEM
supply of famous women's clothing brands and is a certified producer of famous brand sportswear,
has started dispatching people who have completed training domestically as technical advisers to
Japanese based manufacturers and factories of business firms that have been relocated to China, and
established an outplacement service company in Shanghai in January 2004. After establishment,
the business got off to good start and has already shown good placement performance. This
business dispatches Chinese trainees who have passed the second level technical skill test on the
fundamentals of manufacturing women's and children’s clothing implemented by the Japan Textile
Products Quality and Technology Center (QTEC) as technical supervisors on a contract basis to
mainly Japanese based manufacturers and local factories affiliated with business firms after they
have finished training at the main Nissan Tokiwa factory, and according to the Nissan Tokiwa, “we
have reservations for placement contracts to take us through the rest of the year”.
At present there are 30 people are registered as being qualified to take part in this program, and
they make up nine teams consisting of three people each (three people are on reserve). One team is
out placed at a time and they provide guidance for (1) factory evaluations, (2) sample quality
confirmation, (3) part process quality confirmation, (4) mid-point manufacturing quality inspections,
and (5) finished product quality inspections, etc. the outplacement contract period is nine months and
a new team comes in every three months on rotation in order to prevent coziness between
outplacement staff and local employees.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
At the time Nissan Tokiwa was exporting women's slacks on an OEM basis to mainly American
manufacturers but as a result of a rapidly appreciating yen after the signing of the Plaza Accord in
1985 it was forced to switch from focusing on exports to the United States, halted exports in 1987,
and switched to OEM supply for domestic manufacturers. After this, while keeping in mind a
30
possible re-launch of exports to United States it started production overseas where labor costs are
cheaper. In 1993 it established a manufacturing processing facility in Guangdong, China, and
established a company to manage it in Hong Kong. In the following year in 1994, it established a
trade company in Hong Kong. In addition, since a volume restriction was put on the import of
Chinese products to the United States in accordance with the Multi-Fiber Arrangement, they started
to look to place their production in a country other than China, secured outsourcing processing
facilities in Qatar, Jordan, Indonesia, and Cambodia, entrusted production/processing and established
a low-cost mass supply system targeted at mainly the United States.
However, in regards to their main force which was the manufacturing of their own products in
Guangdong, due to such problems as (1) the factory was quite far from Hong Kong and
transportation costs rose, and (2) production facilities and factories became dilapidated, in 2003 they
closed the factory, pulled out from overseas, and specialized/concentrated on domestic production.
On the other end, the business experience in China late president Hiraishi to remember one thing.
Thinking that, “There is very little personnel in Chinese factories that can provide technical guidance
for products. In the future, I would like to contribute to the expansion of business between Japan and
China by teaching advanced sewing technology from Japan”, Nissan Tokiwa has opened a new path
for the future.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Nothing in particular.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
One of Nissan Tokiwa’s strengths is that it never became lax in the management/strengthening of
its domestic production system even while it searched to relocate production overseas. While Nissan
Tokiwa established/secured production facilities overseas, a continued OEM supply of sportswear
and expensive women's clothing to leading manufacturers with its headquarters in Tokushima and
factories in Naruto and Donari and maintained an employee system of approximately 300 people.
The fact that it devoted itself to the introduction of the latest facilities and systems from overseas,
and it never stopped pursuing production technology domestically, is what enabled it to start a new
business.
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In addition, since 1989 Nissan Tokiwa has invited 30 female Chinese trainees every year through
the Tokushima Prefecture Exported Sewing Products Trade Association and thoroughly teaches
trainees Japanese quality management methods and sewing technology during a three-year program
that consists of one year training and two years of practical experience. Those that finish the
program are required to take the second level proficiency test on the fundamentals of manufacturing
women's and children's clothing implemented by the Japan Textile Products Quality and Technology
Center (QTEC) and those who pass are awarded qualifications as quality instructors. These
training activities have given birth to a new business.
6. Future expansion of your business and your company's vision
Nissan Tokiwa requires that instructors renew their qualifications every year in order to maintain
the quality of their skills. Those women who have completed three years of training/practical
training and life in Japan, and who can speak Japanese, are used as liaisons between Japanese based
corporations and local factories. In the future there are plans to expand the service to include other
foreign-based companies entering China without being limited to Japanese based corporations. In
order to do this Nissan Tokiwa feels that it needs to put a lot of energy into the fostering of personnel.
In addition, since there is also a lack of people who can oversee the maintenance of production
facilities in China, in the future they are looking into accepting male trainees, and training them in
the technology/know-how of machinery maintenance to foster technical trainees.
32
Country: Japan - SME
Company Name Maruha Bussan Co., Ltd. (Tokushima)
Industry Import, manufacture, sale of processed agricultural food products;
manufacture, sale of canned food items
No. of employees Domestically, 80
Overseas offices Jiangsu province (independently financed), Dalian (merger)
Company URL http://www.maruha.org
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
As a manufacturer/seller of root vegetables/vegetables such as burdock, carrots, bamboo shoots,
mushrooms and wild vegetables, etc., whose main axis lies on processed lotus root products, Maruha
procures most of its ingredients from the provinces of Liaoning and Jiangsu in China and part from
Korea, and has a factory almost the same size as its Japanese counterpart in China. Maruha has
approximately 1,400 different types of products and sells to approximately 500 companies including
food general wholesalers, super markets, convenience stores and fine cuisine restaurants and has a
30~35% share of the domestic lotus root processed item, its main product, market.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Maruha expanded overseas quickly and started importing ingredients from Baoying County in
Jiangsu Province, known as the best producer of lotus root in China, in the late 1970’s. Faced with a
shortage of domestic agricultural labor, rising costs and unstable production due to unpredictable
weather, Maruha looked to overseas for stable procurement. Procurement on a local level was done
the same way as it was in Japan, by going around to local producers and buying from them directly.
This is because Maruha places emphasis on the safety and trust of the consumer and is particular
about procuring from people “whose face you can see”. In 1987 they secured cooperation from a
factory in the same region and became the first Japanese corporation to engage in local processing.
From 1994 they engaged in direct business and established the world’s largest lotus root
processing plant with a merger between local cooperating factories and local government. They
began primary processing of carrots and burdock, etc. With the low cost of production in China they
were able to think seriously about the stable procurement of ingredients and maintaining the
freshness of foodstuffs and moved local processing into high gear.
At the end of the 1990s they turned their eye to mushrooms and wild vegetables from Jiangsu and
after securing cooperation from a factory in 1997, established a manufacturing company for boiled
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mushrooms and processed wild vegetables through the merger with that cooperating factory in
Dalian city in 2000 thereby expanding their field of business and region of penetration.
In 2003 they reorganized the merger in Jiangsu and made it a 100% subsidiary. By making the
company a subsidiary they were able to organize operations and quality management and stabilize
production and delivery.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
When Maruha started doing business with a Chinese corporation they were burdened by many
cultural barriers such as business customs and living environment, etc. There are also many unstable
elements in Chinese society such as anti-Japan demonstrations. Due to these local circumstances
Maruha feels that doing business in China requires much consideration. In 2004 it established a sales
company in Shanghai and planned to start local sales, but in consideration of the numerous
complaints from the local community and complicated anti-Japan feelings, and the fact that it is
difficult to collect receivables, they switched to gradually selling through a corporation on the
Chinese side.
In addition, one of the largest concerns for not just food products, but any Japanese based
corporation entering the Chinese market is the difficulty associated with quality management which
is why Maruha does only primary processing, such as manufacturing of its “Boiled Series”, at a local
level, and does final processing like seasoning, etc., domestically. Of course they have established a
quality management system in factories in China and there are no problems. However, they do visit
the factories every so often to check on things.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
Nothing in particular.
5. Reason for success of your aforementioned business
The strong point of this company that believes in “loving the ingredients and providing good taste
and enjoyment” is that it has a passion for research and development, a provision system that is
strictly adhered to the region of production and consumption, and overseas expansion overflowing
with a pioneer mentality.
Maruha’s expansion began with the morning, noon and night pursuit of lotus root processing
technology by the original founder and president, and the tradition of research and development that
had continued since establishment was passed down in 1988 to President Kayako Hayashi when he
34
took the reigns. In 2001 a quality management/research and development department in headquarters
received feedback from the market in the form of the voices of consumers and in order to make use
of this feedback in research Maruha opened a Tokyo office with market research functionality.
Maruha entered the Chinese market during a comparatively early period. Competition is
growing fiercer but Maruha aims to further expand its business in China through aiming to advance
local production and increase added value.
6. Future expansion of your business and your company's vision
Maruha’s future strategy is threefold. (1) increasing added value and diversifying sites of overseas
business, (2) strengthening the consumer region/production region site system for domestic business,
and (3) strengthening cooperation with leading distributors for the entire group.
The important points for doing business in China are to increase processing at a local level and to
increase added value. This is necessary in order to survive the fierce competition and to meet the
desires of the local region. At the same time, escaping from a system that is exclusively devoted to
China, and diversifying business all over Asia, and further expanding/stabilizing production/supply
on a global level, are also issues. Vietnam, Thailand, and Indonesia are in Maruha’s sights. They
are powerful candidates from the standpoint of manpower and ingredient production. User
corporations (Japanese based manufacturers, distributors) are also demanding that they would like to
see products provided to them after being processed in the place they are produced.
Domestically, Maruha aims to further strengthen their production/provision system that is strictly
adhered to consumer and production regions. Even in the domestic market, but tastes of the Kanto
and Kansai markets differ greatly. Maruha will process/produce close to the consumption/production
regions and further clarify the fundamentals of providing “Safe, fresh and delicious food”.
Strengthening their partnership with leading distributors is considered to be more important than
the company itself. It is the trump card to comprehensively strengthening information gathering,
production plans, international distribution, and domestic sales.
While embracing complicated issues, the business environment in China has become more and
more difficult, and Maruha thinks that, “the reason why we have gotten to where we have is all
thanks to China. We aim to expand further with our foundation of procuring ingredients and
processing in China and we would like to raise our present 2.5 billion yen total group sales revenue
(May, 2005) to the midterm 5 billion yen mark.
35
Country: Japan - SME
Company Name Swany Corporation (Kagawa)
Industry Manufacturing industry (sports/winter gloves, walking bag, wheel chairs)
No. of employees 80
Overseas offices US, Europe, China
Company URL http://www.swany.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Swany’s main business is the manufacture of gloves. There reason for thinking about exporting
gloves was due to their peculiar employment situation. In other words, since gloves are only needed
when it is cold, a situation in which workers only worked nine months out of the year continued until
around the beginning of the 1950s. Swany felt that pioneering overseas markets was necessary to
free themselves from this situation and therefore put energy into pioneering the export market.
They started moving production overseas in the 1970s starting with Korea. After that in the
1980s they entered China and presently have all of their production facilities (four locally
incorporated companies established) in China. They have also established a locally incorporated
company in the US as a sales point.
In addition to gloves they also make wheelchairs and walking bags. This is because president
Miyoshi is a wheelchair user himself and is quite familiar with the problems associated with existing
wheelchairs. The business was started with the hope of providing a product that was better for the
user. In addition, there wheelchairs and walking bags are all produced in China.
Their ratio of domestic to international sales is 6 to 4. Meanwhile, in terms of product share of
sales, the ratio of wheelchairs to walking bags is about 8 to 2, but the wheelchair/walking bag market
is 10 times that of the glove market so this ratio is expected to reverse itself over the next five to six
years.
Swany does not engage in business with foreign-based companies and has not linked its business
with foreign corporations.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The manufacturing of gloves is a typical labor-intensive industry and production was moved
overseas not because of the prospect of success but because of necessity. In other words, they were
shocked into action by the low labor wages of Taiwan and Korea in the 1970s and decided to enter
the Korean market in 1972. After that, they caught eye of the fact that labor wages in China were
36
1/5 of that of Korea and in 1984 closed their Korean factory and move their production to China
where presently all of their products are produced.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
When they closed the Korean factory they experienced a 100 day labor dispute with Korean
employees who opposed the closure but after discussing the matter in good faith they got them to
understand why production was to be moved to China. In addition, as a result of not firing talented
Korean executives and having them work in China instead, at present the presidents of two out of the
four locally incorporated companies in China are two of those Korean executives.
It is difficult to recruit executives in China. In particular, since college graduates do not want to
work in factories, in order to secure talented personnel, along with visiting universities they work to
come to a mutual understanding with recruited personnel. In addition, whereas they do have people
quit, they feel that mutual understanding and equal treatment is vital.
Language was a large barrier to entering overseas markets, but they foster local executives so that
they could speak Japanese, and trained half of all Japanese sales reps to be a good to work in
Chinese.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
When they entered the Korean market they received financing from the local 114 Bank and from
what was formerly known as the Japan Development Bank. They again received financing from
the Japan Development Bank when they entered the Chinese market.
5. Reason for success of your aforementioned business
Factors for success can be narrowed down to disclosing operator level meeting minutes/president
business trip reports, etc., to the entire company, and mutual understanding and fair treatment. In
other words, in Swany’s case, none of the presidents of locally incorporated companies are Japanese,
they are all foreigners. In addition, stock gifts are given equally without differentiating between
Japanese and foreigners.
Language is an important key to mutual understanding and since foreign executives are all trained
to be able to speak Japanese, there is a large merit to be able to understand each other in Japanese.
Furthermore, management conferences with executives are held for times a year (one of the
meetings is held at headquarters).
37
6. Future expansion of your business and your company's vision
Swany plans to continue to produce in China. Recently, problems like the deterioration of
Japan-China relations and the valuing of the yuan, etc., have been pointed out, but from the point of
view of this company who has engaged in business in China for many years is, politics and
economics should be thought of as two different things, and even if political relationships deteriorate,
it is not necessarily the case that economic relationships will also deteriorate. There are risks
associated with the yuan issue, but it is not considered to be a large problem at this point in time.
Since gloves are among the most difficult sewn products to make it is of utmost importance to
secure talented labor. The largest merit of producing in China is not that labor wages are cheap but
personnel is talented. In other words, agricultural villages in China are a huge source of young,
talented female labor and it is hard to imagine that this type of personnel resource could exist
anywhere else than in China.
38
Country: Japan - SME
Company Name Futec Inc. (Kagawa)
Industry Manufacturing industry (detection devices, etc...)
No. of employees 168
Overseas offices London
Company URL http://www.futec.co.jp
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales
contracts, etc...), or expansion into foreign markets, etc...
Established in 1955 as Fuji Lubricants Co., Ltd. and engaged in the manufacturing and sale of
automobile lubricants. As a result, they first entered foreign markets when they exported automobile
lubricants in 1967 when Mitsubishi Electrics exported electric locomotives to Spain. However, this
industry was a niche industry and they had to search to switching to other industries when faced with
the problems of the uniqueness of the client and the lifecycle of the product, etc., and consequently
went independent as Futec in 1997 and started manufacturing and selling survey devices. If you
look at sales from the first quarter of that year you will see that lubricants only accounted for less
than 10% of sales revenue, and survey devices had become their main force.
Exporting under the name Futec started in 1977 with a film defect detection device to Taiwan and
a paper defect detection device exported to the United States. Then in 1989, they established a
locally incorporated company in the United States as a sales point and also established another
locally incorporated company in the UK as a sales point. However, they retreated from the US
market in 2000 and at present only have an overseas sales point in the UK, but there will be opening
a representative office in Shanghai in March of 2005.
The industry is very specialized and they do not do business with foreign based corporations or
have any business partnerships with foreign companies.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Production is done solely in Japan and oil exports come from Japan, but profits are steadily rising
and they have no plans at present to move production overseas.
Whereas they do face competition from lower-priced foreign products, due to the uniqueness of
the product, since the key to beating the competition is improvements in quality and service rather
than price, technical innovations are fast evolving, and it is more advantageous to have production in
Japan where manufacturers are constantly developing new products. In other words, getting your
wings in Japan is the secret to beating foreign competition.
39
During the peak of the bubble economy it was considered good to go into debt in order to expand
your business, but after the bubble collapsed, since it became of utmost importance to be financially
sound, the company has strived to maintain zero debt self-financed operation. Accordingly, risky
investment is done totally with self financing and they have no intention of the engaging in
large-scale investment that would exceed their limits of self-financing such as moving their
production overseas.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
In the case of this company, since entrance into overseas market refers to sales and not production,
they have no need to employ large numbers of local employees, and local staffing problems are the
sole problem of local operators and the basis of dealing with this problem is respect for autonomy.
In other words, they had been sending Japanese staff when launching a locally incorporated company,
but now they leave it all to local staff. The president of the English corporation is a Brit who lives
in France and who has been entrusted with all rights under the condition that if the company
continues to be deeply in the red that the office will be closed, etc.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
All capital is self-financed.
5. Reason for success of your aforementioned business
It was good to be fully aware of the uniqueness of the product we handle and the superiority of
craftsmanship in Japan, that we remembered that above the of “top of national niche” line lies the
“top of global niche” line, and that instead of moving our production overseas to cut costs, we put
our energy into making new products of high quality and providing better service.
6. Future expansion of your business and your company's vision
By aiming to be the top of a national niche, as a result they were in a position to strive to be at the
top of the global niche. However, they look to continue their basis of operation that is zero debt
self-financing at all costs.
Even though they aim to be the top of a national niche, it is vital to always be looking at what is
happening overseas and not to miss out on chances to become the top of the global niche. In this
respect Futec particularly focuses on the internationalization of personnel and plans to continue to
put importance on it.
40
Country: Australia- Institution
Organization AUSTRADE (trade promotion agency)
Organization format Government organization
Scale Budget: AUD335.8 million; no. of employees: 1,053 (budgeted for
FY2005/06)
Overseas offices 57 countries, 101 locations
URL www.austrade.gov.au
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
To support the development of SMEs by expanding exports, Austrade implements NEDP (a free
program aimed at entrepreneurs thinking of getting into new exports that provides support ranging
from responding to novice questions to successful exporting) and EMDG (a subsidy support type
program aimed at entrepreneurs wishing to expand existing export operations)
These programs have no limitations of industry type regarding qualifications to use the program.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
(1) NEDP(New Export Development Program)1:
Austrade (16 in Australia/101 offices overseas) supports new developments of SME overseas
markets in cooperation with TradeStart (50 offices in Australia) through NEDP. (TradeStart provides
information and expert advice to support the success of export businesses of Australian companies.)
Export advisors in Australia and Austrade overseas staff, etc. provide free of charge up to 20 hours
of coaching, guidance, focused workshops and advice concerning exporting with respect to
exportability inspections of products, preparing to enter a market and after finalizing an export
destination.
The qualifications for utilizing this program are as follows.
1) Acquired an ABN (Australia Business Number)
2) Main location of business in Australia.
3) Have not used NEDP, TradeStart programs or the Export Access program within the last three
years and have not accepted services for new exporters from Austrade.
4) Have not obtained export profits in the same market within the past three years.
1 http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID001-2_-3_-4_-5_-6_-7_,00.html
41
Fees for business trips and market research (fees other than the free services that Austrade
provides), resources and time to utilize the programs (funds, human resources, etc.) are borne by the
participant.
Over 5,000 companies have been supported since the program started in the term ended June 2003
(July 2002 – June 2003). (Budget is unknown.)
(2) EMDG(Export Market Development Grants)2:
The EMDG program is a financing support type program of the federal government aimed at
SMEs in Australia trying to expand their existing export business (development markets, etc.).
Companies receiving this support can receive free assistance up to 50% of the amount subtracted
from AUD15,000 from the expenses associated with export promotion.
The qualifications for utilizing the program are as follows.
1) Annual business below AUD30 million
2) Expenditures of at least AUD15,000 on export promotion (can be calculated for two years the
first time only)
3) The products or intellectual assets the company is trying to export are produced in Australia.
The EMDG support money for FY2004/05 was AUD123.9 million (3,277 recipients). The
amount of money sent has a fixed cap annually, however, as result of funds AUD30 million that
will be added over three years from FY2004/05, the amount for FY2005/06 has reached
AUD160.4 million for FY2005/06.
3. Future Outlook and Expectations
The Australian government is aiming to shift economic growth from domestic-based to
external-based. With measures being implemented such as 30 new offices appointed to be in charge
of promoting export at Austrade, NEDP and TradeStart improvement, and additional contributions to
EMDG, the organization is expected to strive to promote export moving forward with a focus on
SMEs.
2 http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID0021-2_-3_PWB1455002-4_-5_-6_-7_,00.html
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Country: Australia -SME
Company Name CIC Secure
Industry Manufacturing (security equipment)
No. of employees 15
Overseas offices New Zealand, Taiwan, Macao, Thailand, Malaysia, Singapore, Brunei (export
destinations)
Company URL http://www.cicsecure.com.au/
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of
production, sales contracts, etc...), or expansion into foreign markets, etc...
CIC Secure is engaged in the design and sale of goods for key safety management (boxes for
safely managing keys by using PIN entry, etc.) (manufacturing is outsourced); in addition to sales in
Austrailia, products are exported throughout Asia. (Domestic: export ratio: 9:1)
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Ms. Cooke, the founder of CIC Secure started a consultant business for sales and marketing at her
home office after gaining experience in the sales of medical products. She searched for revolutionary
products looking for sellers. The first large-scale agreement she obtained was the sale of security
equipment; hence the business become involved in discovering various security products, until she
eventually started a business of her own related to security equipment.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies
in information gathering, capital procurement, language barriers, etc...)
In starting up the business CIC Secure, the first issues it faced were insufficient funds to hire
needed employees and a lack of knowledge related to basic bookkeeping and legal know-how. To
resolve the former, the company introduced an internship program and secured talented students. For
the latter, it used state government consulting services for entrepreneurs.
Since the export potential was unclear when evaluating product exports, CIC Secure grasped such
potential through surveys run via the NEDP program.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
State government consulting services were utilized and obtained for knowledge relating to basic
43
bookkeeping and legal know-how.
As for the export business, it was launched as a result of learning about Austrade’s NEDP
program; plans for gradually starting an export business were successfully formulated with NEDP
free services, leading to success export operations. Funds were received via Austrade’s EMDG
program, however, EMDG’s fixed threshold of AUD15,000 is a bit high for an SME.
5. Reason for success of your aforementioned business
One factor in the company’s business success is that CIC Secure conducts training of basic sales
skills for all of its employees and proposes what has learned from methods in expanding sales at
major international companies.
Large contributions are being made and the importance of are increasing for Austrade’s
newsletters, Website and information from local employees in terms of obtaining knowledge related
to markets with an interest in the company’s products.
6. Future expansion of your business and your company’s vision
CIC Secure is evaluating the potential of product sales in the UK and Ireland and aims to expand
its export business while continuing to receive support from Austrade.
44
Country: Canada - Institution
Organization Name Business Development Bank of Canada (BDC)
Organization Type State agency, public institution or industry organization
Size Annual budget: C$2.3 billion (loans budget) Staff: 1400+
Overseas Network None
URL www.bdc.ca
1. Basic idea and policy of the agency, institution or organization to promote SMEs in the
globalization (including, evaluation of the globalization in overall SMEs policy, key areas
to promote (export, import, alliance with foreign companies, foreign investment, etc.), and
key industries)
The Business Development Bank of Canada (BDC) is a federal crown corporation (100%
government-owned) bank that offers financial services, loans, venture capital, and business
consulting services to small and medium size Canadian businesses and entrepreneurs. BDC
specializes in helping small businesses with start-up and growth financing, and with developing
business plans. They provide custom financial solutions to meet their clients’ needs. They focus
specifically on small business, because often, the large commercial banks are more reluctant to deal
with small businesses. BDC particularly specializes in companies in the high technology and
exporting sectors.
2. Measures and budget (including financial support) to promote SMEs in the globalization
BDC’s main support for SMEs in globalization is providing business-consulting services and
financing solutions tailored to their specific needs. BDC has a portfolio of outstanding loans to small
business currently totaling about C$8.2 billion. In 2005, its authorized loan budget is approximately
C$2.3 billion.
It has also recently launched a Venture Capital Fund, which will make strategic investments in
Canadian companies with promising technology in the fields of life sciences, telecom, information
and other advanced technologies. In 2005, the Canadian Government provided an injection of C$250
million for BDC to establish this venture fund.
3. Outlook and prospects
BDC believes there will be continued growth in demand for its services. It projects its outstanding
loan portfolio to grow to C$8.8 billion in 2006. They also believe the Canadian Venture Capital
market is recovering several years of weakness. This recovery will allow BDC’s Venture Capital
Fund investments to increase.
45
Country: Canada - SME
Company Name Dalsa Corp.
Industry Design/development of semiconductors related to image processing
technology and related software development
No. of employees Approx. 1,000*
Overseas offices Has branch offices in the U.S., Netherlands, Germany, Japan and China and
agencies in 30 other countries
Company URL www.DALSA.com
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
Dalsa Corp. specializes in products related to digital imaging processing technology and related
services. In particular, its strengths are integrated circuits, electronics technology, software
development and wafer processing technology in the semiconductor manufacturing field. The
company’s technology is used in various sensor equipment, digital cameras, image processing
software, related semiconductor chips and the like.
The head office is located in Waterloo, Ontario. It has sales and service bases in the U.S.,
Netherlands, Germany, Japan and China. Dalsa is listed on the Toronto Securities Exchange and
including the group companies employs about 1,000 people worldwide.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
(Answered from the perspective business aimed at the Asia-Pacific region.)
The Asia-Pacific region continues to be a core base for not only in the field of manufacturing but
also technological innovation in the world. The company’s technology and products are used for
improving the quality of products produced in factories and particularly indispensable in
semiconductors; therefore demand has been determined to greatly increase in the future (with
semiconductor manufacturing bases concentrated in Asia). Given this, the strategy is to focus on the
Asia-Pacific region. Other promising fields are automobiles, printing, electronics, LCD displays and
pharmaceuticals.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
(Answered from the perspective business aimed at the Asia-Pacific region.)
46
Speaking from Dalsa’s experience, it is necessary for an SME to understand the culture of each
country and region before it enters the market in the same region. Sensitive issues will arise
occasional over similarities and differences in culture and customs of the respective countries. In the
initial stage it may be of great help to search for a partner or seller in the relevant country or region.
In terms of funds, it is important to start business from a small scale to reduce the risks.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
The Trade Commissioner system of the Canadian government (a officer placed in internal/external
diplomatic establishment according to industry and country/region) is a significant help. The
commissioner provides information on legal regulations in terms of local latent partners and
conducing business as well as information on the various regulations with respect to procuring funds.
Organizations such as JETRO (foreign-government related) indicate the direction operations should
take. Grasping an overview of the market in Japan was helpful.
5. Reason for success of your aforementioned business
More than anything, patience and endurance are important. Things do not move forward at a
speed we’re used to. The needs of the market in the relevant country/region must be firmly grasped
and the company’s products/services must be skillfully adapted to the characteristics of that market.
In other words, a wide perspective and flexibility are needed.
6. Future expansion of your business and your company’s vision
Our goal for the Asia-Pacific region is to increase sales by 50% within two years. We are planning
to build new R&D bases and innovation centers in the region. for areas in which experience, such as
knowledge and know-how in the relevant countries/regions, we will look to merging operations with
local partners.
*The interviewee is the CEO of DALSA Coreco, a group company of Dalsa. Coreco opened an
office in Japan in April 2004, becoming its first office outside North America. It was later bought by
Dalsa. While the number of Coreco employees at the time is unknown, the scale is very small.
47
Country: Chile - Institution
Organization Asociación de Exportadores de Manufacturas de Chile A.G. (ASEXMA)
Organization format Industry organization
Scale Estimated budget: 1.7 million dollars; No. of employees: 62
Overseas offices None
URL www.asexma.cl
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
For our association, giving exporting companies the ability to use FTA concluded or being
negotiated by Chile is extremely important. A natural index for measuring the utilization of business
chances offered by the FTA is the growth in exports of manufactured products.
As an association of exporters, Asexma provides assistance by ensuring the identity of export
companies and the launching of new technology and designs as well as support in approaching free
trade zone markets.
Asexma has been moving forward such that Chile becomes the industry platform for Latin
America based on the political and economic stability of Chile and favorable relationships with
neighboring countries and the rest of the world.
2. Specific policies, measures (including the financial side) and respective budgets
supporting responses to the globalization of SMEs.
Asexma has been focusing on providing training opportunities related to launching new
technologies so the supported export companies can compete in corporate activities, trade, logistics
management, marketing and globalization.
The organization is constantly providing immediate and appropriate support for SME
development in exporting. Major related activities comprise trade promotion activities such as
providing information on laws and regulations, the certificate system, statistics and the customs
system as well as market surveys, business schedules and trade missions.
As a non-profit industrial organization, Asexma does not have an independent budget with respect
to companies. However, its business center is an intermediary agent of various schemes of
Corporacion del Fomento de la Produccion (CORFO), which aims to improve the competitiveness of
SMEs. This includes Fondo de Asistencia Técnica (FAT), Proyecto Asociativo de Fomento (PROFO),
Programa de Desarrollo de Proveedores (PDP), Fondo Nacional de Desarrollo Tecnológico y
Productivo (FONTEC) and Programas Territoriales Integrados (PTI).
48
3. Future Outlook and Expectations
The globalization phenomenon of companies is one of Chile’s challenges. Today, when planning
to launch a given market, just providing the product is not enough; recently, one must act with a
modern perspective taking exports and competitiveness into consideration. To smoothly enter any
given market in the world, introduction of technology or design is necessary and global international
standards and requirements must be met.
Along with the aspects noted earlier, corporate responsibility to society is a prerequisite that
exporters and importers must satisfy. Doing so allows differentiation among similar products and
must be done lest we be left behind.
Given that, the activities of Asexma aim to support exporters, and focuses its efforts on various
companies constantly implementing technology using production processes, acquiring various
certificates and conducting job training for full-time employees as well as paying attention to
relationships with workers and the environment.
49
Country: Chile - SME
Company Name COSMETICA NACIONAL
Industry Production and sales of cosmetic products
No. of employees 260
Overseas offices None
Company URL www.cosmeticanacional.cl
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
Cosmetics export business.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
We had to consider growth, the market scale in Chile, and competition from multi-national
companies and aim to increase sales.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies
in information gathering, capital procurement, language barriers, etc...)
To date, growth through the company’s exports have been achieved using net assets, and outside
capital is probably only needed for rapid growth.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
The company receives public support in procuring funds etc. for raising capital for research and
development from grants for participation in overseas missions by PROFOS (a promotion project)
and FONTEC (a technology development fund) of CORFO (an industry promotion public company)
and by a guarantee by CORFO.
5. Reason for success of your aforementioned business
We obtain the latest technology that only a very few multi-national companies or the like in the
industry have been deploying.
6. Future expansion of your business and your company’s vision
In terms of the number of sales, we are the industry leader in cosmetics in Chile and do not expect
50
much growth in the domestic market alone. Moving forward we would like to see growth in exports.
Specifically, we will penetrate important markets such as the U.S. market and develop agencies in
Latin America with appropriate payment capabilities.
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Country: Chile‐‐‐‐SME
Company Name TRAVERSO S.A.
Industry Production of vinegars, lemon juice and sauces
No. of employees 200
Overseas offices None
Company URL www.traverso.cl
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
Traverso started out exporting its own products and now exports to Latin America, parts of the US,
and Israel. It is developing sales collaboration projects with foreign countries, one of which is
ANDREA MILANO, an Italian perfume producer. However, Traverso does not have any foreign
capital participation.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Traverso has a considerable portion of the market in Chile, which in turn drove its expansion into
markets overseas. Collaborations with overseas companies have been made to indirectly bring
Chilean-made high quality products not produced to date to overseas markets and to learn product
development processes of manufacturers known throughout the world.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Naturally language issues pose barriers in export destinations and various health related
regulations of the importing countries; thus new mixing methods and special analysis is needed to
clear these barriers.
Acquiring specific information on market, market share rates, margin standards and vendor
oligopoly rate in distribution, etc. was difficult. Normally, one must go to the country and meet with
the relevant persons to collect the data nearest to the actual situation.
Another issue is that mixing methods, etc. are different for our own products and those distributed
in foreign markets. This causes major problems in production processes and logistics.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
52
Public support is a mere formality, but there is support from ASEXMA (Asociación de
Exportadores de Manufacturas de Chile) and PROCHILE (the Chilean foreign trade commission)
5. Reason for success of your aforementioned business
(1) Being service minded.
(2) Being active and responsive
(3) Have business-related knowledge
(4) Have a tradition of carrying out your promises.
6. Future expansion of your business and your company’s vision
We have been extremely satisfied at the results achieved so far, with perseverance and hard work,
we must achieve still greater goals.
53
Country: ChinaCountry: ChinaCountry: ChinaCountry: China ---- InstituionInstituionInstituionInstituion
Organization ZXQYS (national development/reform committee for SMEs)
Organization
format
Government institution
Scale
Overseas offices
URL http://zxqys.ndrc.gov.cn/
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
In February 2005, the Chinese government (State Council) announced its “Some Opinions of the
State Council on Encouraging, Supporting and Guiding the Development of Private and Other
Non-Public Economic Sectors” and clarified its stance on supporting development of privately run
companies and the like. The relevant “Opinions” can be said to be the stance of the Chinese
government to support the development of SMEs.
The Opinions comprise 35 items; the 18th item describes thinking concerning the globalization of
SMEs.
The details are as follows.
(1) Support companies developing markets in China and abroad
(2) Move forward with information networking and provide information on domestic and overseas
markets to non-public owned companies
(3) Encouragement/expansion of expanding exports of non-public owned companies and overseas
investments
(4) With respect to overseas investments, financing exports and export credit insurance, such
companies shall enjoy same benefits as other companies
(5) Encourage non-public owned companies to apply for intellectual property rights overseas
(6) guide the role of intermediary organizations such as industry organizations and chambers of
commerce, use the country’s SME international market development fund and support
international market development of non-public owned companies
2. Specific policies, measures (including the financial side) and respective budgets
supporting responses to the globalization of SMEs.
The ZXQYS primarily promotes the following measures towards the globalization of SMEs as an
SME policy proposal/implementation institution.
54
(1) The China SME Expo has been held by the ZXQYS since 2004 on promoting international
exchange related to SMEs.
(2) With cooperation by the ZXQYS, the National Development Bank strengthened financing for
SMEs and in 2005, the amount of financing is expected to total 10.55 billion yuan. In particular,
financing is given to companies coinciding with the government’s industry policies in such
fields as science and technology, employment creation, general use of natural resources,
agricultural production and exporting, gaining foreign investments through exports, and those
offering social services.
(3) The 1st East Asia SME Development and Investment High Level Seminar was held on October
27. Vice Premier Zeng Peiyan attended.
(4) Conclude MOUs related to SME cooperation with countries and strengthen bilateral cooperation
(An MOU was concluded with Korea in March 2005 and with Croatia in May 2005.)
3. Future Outlook and Expectations
On the subject of promoting the globalization of SMEs, Vice Premier Zeng Peiyan presented
opinions on SME exchange in East Asian countries at the opening ceremony of the 1st East Asia
SME Development and Investment High Level Seminar on October 27. Below is a summary:
(1) Promoting exchange/dialogue
Promote exchange/dialogue in a variety of formats and regularly hold high-level seminars
concerning SMEs in East Asian countries. Resolve issues through dialogue and provide an
environment of fair market competition with respect to SMEs.
(2) Promoting deregulation and facilitation of trade and investment
Improve environment for trade investments and encourage multi-national investments and
businesses in SMEs. Also, with respect to SMEs, provide the necessary conditions for promoting
free movement of production elements such as people, products, capital, services and technology and
so on.
(3) Expanding support on the financial side:
Provide financial services for investments/trade cooperation of SMEs in the region through
financial institutions. Strengthen support in terms of lending, expand routes for direct financing and
set up a credit security system among other measures.
(4) Setting up a service structure for SMEs
Provide a service structure for SMEs with respect to sharing information, technological innovations,
protecting intellectual property and developing human resources, etc. Remove obstacles concerning
investing/trade and eliminate unreasonable regulations. Promote exchange between SMEs.
(Source: ZXQYS Website)
55
CountryCountryCountryCountry:::: ChinaChinaChinaChina ---- SMESMESMESME
Company Name Oceans Sports & Entertainment Marketing Ltd.
Industry Marketing related business concerning sports
No. of employees 10
Overseas offices Hong Kong
Company URL www.oceans-marketing.com
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
Through tie-ups with FIFA (Fédération Internationale de Football Association), Oceans Sports &
Entertainment Marketing, the only FIFA designated advisory company in China, provides the
following services:
(1) Creates marketing plans and carries out sponsorships and sales as a marketing agency for
various sports associations, clubs and athletes.
(2) Marketing and sales of sports content
(3) As a partner in the sports marketing field of advertising companies, develops clients who
support sports by cosponsorship.
(4) Operate various sports events and related promotional events guaranteeing the sponsor’s
interests to the fullest extent.
(5) Analysis and results off the effectiveness of event collaboration (in tie-up with media analysis
specialist companies)
Established a new company in Hong Kong in January 2005 for conducting business in
broadcasting rights.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
With four years experience in work in the J-League and as a responsible member of the FIFA
Beijing Office, the company decided to enter the sports related business in China through experience
gained in preparing to sponsor the women’s soccer World Championships held in Beijing in
September 2003.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
56
Not even two years have passed since operations began, and the company has been dealing with
problems such as 1) unstable revenue structure, 2) insufficient capital, and 3) business development
reliant on advertising companies.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
None in particular.
5. Reason for success of your aforementioned business
(1) Carrying out sports co-sponsorship business professionally
(2) Having strong ability to convert sports content into a valuable promotion tool
(3) Management experience locally and overseas in various sports events
(4) Understanding the corporate culture of the clients of different cultures and social backgrounds.
6. Future expansion of your business and your company’s vision
(1) In the short term, aim for success on the level of all accepted projects.
(2) In the medium-range term, aim to stabilize the revenue structure and stabilize management as
well as improve visibility of the company in the industry.
(3) In the long term set up a holdings company for managing sports property management
companies, media investment/affiliate companies and advertising agents.
(4) Finally, aim to develop the most respected and successful sports marketing company in China.
57
Country: China - SME
Company Name Beijing Tianzheng Information Technologies Co., Ltd.
Industry Market surveys, information provider, consulting
No. of employees 40
Overseas offices Tokyo
Company URL http://www.8681incubator.org.cn
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
Promotes exchange of private companies in Japan and China, mediation for business
developments, and business creation.
The main content of work is as follows:
(1) Market awareness stage: marketing research
(2) Market development stage: market creation, channel development
(3) Market advertising stage: market promotion support
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Through experience at working at major companies in Japan, the concept of the major Japanese
corporation is focused on commercial distribution and export (not being able to escape from an
export model of profound and huge), it was felt that in responding to business of cutting edge
technology sought by Chinese companies that initiatives for localization for business development in
China and business model structures were lacking. Hence we decided to start related operations for
disclosing impartial and public information on the situation of Chinese markets that Japanese
companies could use in entering China.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Upon startup, we ran into the problem of low interest with respect Japanese style business
proposals in China at the time. In contrast to what is said about China having low labor costs, it is
difficult to secure high level human resources and there were also problems in securing office space
and funds; however, this problem was resolved due to ongoing support from the Wangjing
Liuxuesheng Chuangye-yuan (Wangjing Students Abroad Association for Business) and the like with
58
respect to foreign student created companies.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
Upon established, the company received the following services from the Wangjing Liuxuesheng
Chuangye-yuan founded by the City of Beijing:
(1) Provision of offices at a low price
(2) Regarding companies founded by returning students from abroad, corporate income tax
exemption for three years after establishment.
(3) With respect to companies founded by returning students abroad, unsecured financing up to
100,000 yuan if applied for.
(4) While only a nominal amount, provision of bonuses to companies that did well.
5. Reason for success of your aforementioned business
(1) A gap exists between China and Japan in terms of information, regions, technology, business
scale and so on; however, the company is close to the China market and since it can provide
quick and accurate related services, it can provide appropriate services compared with other
companies in the same industry.
(2) Since the company provides its services in China, it can do so at low costs.
(3) China has many companies that provide survey/consulting services; however, few companies
offer a set of services ranging from surveys, business negotiation, company startup to promotion
support, and that is the company’s strengths. Setting up a business support platform gives many
of clients peace of mind.
6. Future expansion of your business and your company’s vision
(1) The company will expand its bases to Beijing, Shanghai, Shenzhen, Guangzhou, and Tokyo as
well expand its staff to 50 and strengthen the services structure offered to Japanese and Chinese
companies.
(2) Through managing the Sino-Japan Microelectronic Industry Center for Incubation founded with
the support of the Beijing city government, etc., expand business related to promoting business
alliances between semiconductor companies in China and Japan.
(3) From 2006, the company will tie-up with companies in the same industry that offer the same
services and aim to build partnerships.
59
Country/Region: China/Hong Kong – Institution
Organization Name Hong Kong Small and Medium Enterprises General Association
(HKSMEGA)
Organization Type Industry organization
Size 200 Members, Annual budget: Flexible, Staff: 5
Overseas Network Affiliated to China International Corporation Association of SMEs
URL www.hksmega.org
1. Basic idea and policy of the agency, institution or organization to promote SMEs in the
globalization (including, evaluation of the globalization in overall SMEs policy, key areas
to promote (export, import, alliance with foreign companies, foreign investment, etc.), and
key industries)
HKSMEGA is in place to promote investment, exhibitions and seminars across the border
between SMEs on both sides (China and HK). In the past few years, HKSMEGA hosted study
missions for our members to major cities in China, Canada and Australia, so that they could establish
business networking and explore business opportunities over the world. HKSMEGA also takes
advantage of CEPA to boost the China trade for our members.
2. Measures and budget (including financial support) to promote SMEs in the globalization
In 2003, HKSMEGA was given a grant of HK$1.70 million under SME Development Fund
(administered by Trade & Industry Department) to provide IT estimation advisory service to 100
SMEs in Hong Kong so that the beneficiary SMEs could have their IT-enabled technology upgraded
to compete more favorably against their global counterparts. The response was overwhelmingly
positive.
3. Outlook and prospects
SMEs have a very rosy future in the knowledge-based economy because they can accommodate
its characteristics, such as individualism, flexibility and speed. However, SMEs are, in general,
deficient in financing, human resources and corporate governance.
4. Please introduce any of the enterprises which is/are under your support.
HKSMEGA, as a non-profit organization does not specifically support any individual enterprise
but assist the industry at large.
60
Country/Region: China/Hong Kong – Institution
Organization Name Trade and Industry Department, Hong Kong SAR Government
Organization Type State agency, public institution or industry organization
Size Annual budget: Staff:
Overseas Network
URL www.tid.gov.hk
1. Basic idea and policy of the Hong Kong Trade and Industry Department to promote SMEs
in the globalization (including, evaluation of the globalization in overall SMEs policy, key
areas to promote ((export, import, alliance with foreign companies, foreign investment,
etc.)), and key industries)
We do not have specific policy on promoting SMEs in the globalization. However, the
Government of the HKSAR believes the key to the success to SMEs lies in the increase in
competitiveness through productivity enhancement, which covers both increasing operational
efficiency and increasing the value added to our products. Therefore, within the framework of a
free market economy, the Government of the HKSAR provides numerous services designed to help
enterprises to develop their potential. These services are provided by various Government
departments, quasi-government agencies and industrial and trade ogranisations and are offered to
businesses of all sectors in Hong Kong.
2. Measures and budget (including financial support) to promote SMEs in the globalization
Not Applicable.
3. Outlook and prospects
Not Applicable.
4. Please introduce any of the enterprises which is/are under your support.
Not Applicable.
61
Country: Indonesia - Institution
1. Basic Policy of the agency, to promote SMEs in the globalization (including evaluation of the globalization in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc), and key industries ① To facilitate SMEs to participate in overseas exhibition, and trade mission. ② To have bilateral cooperation with other countries. The Objectives is how to make
cooperation between SME in Indonesia and SME in other countries, to create marketing,
do strategic alliance partner, and to attract foreign companies to invest in Indonesia. ③ To promote in Domestic Market 2. Measures and budget (including financial support) to promote SMEs in the globalization ① Overseas promotion
Department of Cooperatives & SME has facilitated 447 SME’s Companies go abroad and joint
exhibition such as
- Saudi Arabia’s International Trade Fair 2004 at Jeddah
- Discover Indonesia Trade Fair at Kuala Lumpur, Malaysia
- The 14th International Middle East Furniture, Interior Design & Shop Fitting
Exhibition at Dubai
- Exhibition at Lima, Peru (products: handicraft, batik, garment, home decoration,
jewelry, bag, sandal, fashion accessories, and football)
- 2nd Indonesia Solo Exhibition at Sharjah, UEA
- 12th South Africa International Trade Exhibition, Johannesburg
- Import Shop, Berlin
- Vietnam International Trade Fair at Ho Chi Minh city, Vietnam
② Bilateral Cooperation
Indonesia has bilateral cooperation with Turkey, Algeria, Italy, Korea, Bulgaria, Jordanian, and
Romania. On next November, there is program to conduct trade mission to Italy. The objectives is to
make action plan of MoU. The product is Leather. There are 20 SME company will go to Italy and
have one and one meeting with SMEs company in Italy. The purpose of this cooperation is to attract
investment from Italy to produce leather in Indonesia and export to Italy.
Organization name Ministry of Cooperative, SME
Organization type State Agency
Size Annual Budget: 1.05 billion Rp (1USD = Rp 10,000)
Overseas Network
URL www.depkop.go.id
62
③ Domestic Promotion
In 2004, Department has already facilitated SME to joint in 5 promotion events such as:
- Inkowapi Bazaar, domestic product exhibition at Mangga Dua Trade Center
- Weaving exhibition at Hotel Sahid Jakarta
- Batam Expo 2004, at Batam Center, Batam island
- SMEsCO Festival 2004 at SME Promotion Center (SPC), Jl. Gatot Subroto
- Export Product exhibition 2004 at Jakarta International Center.
Budget for Promotion and International Cooperation for 2005 is 7,55 billion rupiah. This is
including exhibition inside and outside country and bilateral cooperation. Department of Cooperative
& SME facilitate 100% support for Booth rental, Catalog, and fiscal. But for transportation
Department is only support 50% of overall cost. SME’s company itself supports the other 50%.
④ Developing Small Medium Enterprise and Cooperative Promotion Center (SPC)
The purpose is to make integrated promotion to increase access and market segment of SME. This
SPC facilitates such as multifunction room, business center, Meeting room, Workshop,
Information/data center, consultation and advocacy, quality guidance, technique and marketing
management, financing facility, design, packaging, etc.
The building has 17 floors. The outside construction has completely finished and the building
currently has operated from 1st- 4th floor. For 5th – 17th floor, it is still under process. Budget to build
this SPC is $US 23,845,000.
3. 3. 3. 3. Outlook and prospects
Actually if the Ministry see the current condition of SME’s company in Indonesia, the
prospect is negative. That’s why now The Ministry is trying hard to develop through
bilateral cooperation, overseas promotion, training & seminar.
If Bilateral Cooperation is successful, the Ministry optimists that Indonesian SME
will able to enter globalization era.
Definition of SME According Law No 9/1995, Small business is:
- Asset < $US 20000 excluding land and building
- Yearly turnover < $US 100000
- Belongs to Indonesian citizen
- Independent
63
Country: Indonesia - SME
1. Detail of business
Wooden Candle Holder, Wooden Handicraft
2. Background, prospects and reasons for the SME to start up the business I’ve been working for HSBC (Hong Kong Bank) from 1984 until 1994. On 1998, I started doing
my own business bringing some kind of handicraft and batik to Holland and I got a lot of profit.
From that time, I started learning about marketing, human resource, and active to get information
from NAFED – Department of Cooperatives & SME. In year 2000 until now, I have sold Indonesian
handicraft to 6 – 7 countries per year. I think the business has good prospect.
3. Problems / difficulties that SME facing before / after starting up business (financing, human resource management, structure management, lack of information/ marketing, language, and so on.)
Sometimes it is not easy to trust when I got an order. I am afraid that I might be meet ‘monkey’
businessperson.
4. Availability of public support (if any) Not any
5. Critical success factor of the business I make good relationship with good makers in the village (Bali, Jogya, and Pekalongan) and I can
get cheap price for material.
I think success factor is also depends on the person. I am very active person, I learn how to
greeting person who just passing by my booth and I talk to my self I must make them to come over
to see my product and make transaction.
6. 6. 6. 6. Outlook of business and company’s vision It will be great if one day I can do export of the goods to so many buyers without I need to go to
so many countries by my self like now.
Company Name Java Dini Art
Type of Business Export
No. of Employees 4
Overseas Network
URL
64
Country: Indonesia - SME
1. Detail of the business Exporter of green coffee, black pepper, and white pepper
2. Background, prospects, and reasons for the SME to start up the business
Our company started as a small family enterprise which after three generations has rapidly expand
into one of the bigger pepper & coffee exporter in Indonesia
3. Problems/ difficulties the SME facing before/after starting up the business (financing, human resource management, structure management, lack of information or marketing, language, and so on)
- Before : Financing, human resource management & lack of reliable information
- After : Networking, lack of human resource, marketing
4. 4. 4. 4. Availability of public support (please detail public support actuallAvailability of public support (please detail public support actuallAvailability of public support (please detail public support actuallAvailability of public support (please detail public support actually obtained, if any)y obtained, if any)y obtained, if any)y obtained, if any)
---------------
5. Critical success factors of the business
- Continuous improvement in product processing to keep up with market trends/ demands and
government regulations
- Diversification
- Dedicated human resources
6. Outlook of the business and your company’s vision
- To expand the scale of our business
- Break into global market especially Japan
- Further diversity to include more secondary processing in our product
- Aim to manufacture final consumer products
Company Name PT Putrabali Adyamulia
Type of Business Exporter & Processor of Green Coffee & Black Pepper & White Pepper
No. of Employees 90 Staff Personnel + 250 labor (Manual)
Overseas Network
URL
65
Country: Indonesia - SME
1....Detail of business
Our product is Garment and sale through some of outlet in Jakarta and Bali
2....Background, prospects and reasons for the SME to start up the business
Background is Hobby and hope young generation to appreciate the Batik wear
3....Problems / difficulties that SME facing before / after starting up business (financing, human resource management, structure management, lack of information/ marketing, language, and so on.)
To control product quality
4....Availability of public support (if any)
Trade fair
5....Critical success factor of the business
Consumer buying power
6....Outlook of business and company’s vision
The batik is expected to become more popular on the International society
Company Name Terracotta Indonesia
Type of Business Production/ Sales of Clothing
No. of Employees 10 employees
Overseas Network
URL
66
Country: South Korea - Institution
Organization Small and Medium Business Administration
Organization format Government institution
Scale Estimated budget: 1.6259 trillion won (2005), No. of employees: approx.
560
Overseas offices 2 (China, Indonesia)
URL http://www.smba.go.kr/
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
The SME policy objectives are positioned as “increasing the strength of small and medium
venture companies by increasing their ability to innovate and strengthening their global
competitiveness”, transfer a policy paradigm towards autonomous competition and cooperation as a
part of the tone of policies focused on protection and development, and advance the following types
of SME policies.
(1) Focused development of innovative SMEs, centralizing policy resources and creating an
environment in which general SMEs can shift to becoming innovative companies. The government’s
various support structures promote measures that are focused on preparing a system that enables
efficient distribution following the achievements of innovative results.
(2) Strengthening the order-made type policies to set and promote policy objectives that are
differentiated an in line with SME requirements and characteristics.
(3) Eliminate the “direct protection system” that has lowered efforts to improve technology
development and improve quality by SMEs. To this end, plan to gradually end the organization
optional agreement system and fixed industry system by 2007.
(4) To eliminate polarization as companies, SMEs and small scale commerce and industry persons
grow together, focus political strength.
(5) Promote the loosening of industry-related regulations and simplification of procedures
2. Specific policies, measures (including the financial side) and respective budgets
supporting responses to the globalization of SMEs.
(1) Expanded support at the base of SME exports:
1) Industrialization of domestic SME exports
Business details: system wherein SMEs with great latent potential for exports are discovered, the
various activities required for exports are supported and export SMEs are developed.
67
Current status of operations: In 2001, the budget of 1 billion won increased rapidly to 1.5 billion in
2005 and the number of companies supported started from 341; now 1,700 companies are being
supported as of 2005.
2) Management of export support center for SMEs:
Business details: The SME Export Support Center was set up and is managed by local SME agencies
in 11 locations since December 1998 and is supported in whole by 11 export support related
institutions and financial institutions.
Current status of operations: In 2004, financial support for exports in 2004 totaled 137.9 billion won;
export securities/insurance support totaled 279.9 billion won for 1,129 companies and marketing
support for 625 companies.
3) Enhancement of SME cyber-trade foundations
Business details: Building/managing “Internet SME Hall (Kor.bestme.com) to enhance the
marketing foundation for cyber-exports of SME-made products.
Current status of operations: as of the end of June 2005, catalog information had been built of over
152,000 products with information on 25,815 companies. A tie-up network is being setup with the
ASEM site and 160 trade sites worldwide are being registered.
(2) Strengthening of overseas marketing power of SMEs:
1) Overseas expos and dispatching market development organizations
Business details: support of participation in overseas expos and market development organizations
to promote overseas market entry of SMEs
Current status of operations: In 2004, dispatches to 72 overseas expos and 29 market development
organizations, etc. amounted to at total of 101 dispatches supported. In 2005, there were 117 such
dispatches supported with 10.2 billion won.
2) Support for acquisition of overseas standards certification:
Business details: Countries all over the world require overseas standards certification marks to be
obtained and the technological support needed to obtain the overseas standard certification as well as
support with part of the capital for obtaining such certifications.
Current status of operations: The 2005 budget is set at 21.4 billion won to 4,277 companies and
support to obtain certification given to 905 companies by the end of August was completed.
3) Developing staff needed to develop markets overseas
Business details: In line with the large increase of unemployed persons with academic ability due to
the 1999 IMF crisis, the administration has been educating the staff needed to deploy to overseas
markets and developing them through direct investments.
Current status of operations: SME marketing activities executed overseas by 884 people in 100
locations in 68 countries in 2004. In 2005, the dispatch of staff needed to develop overseas markets
68
totaled 895 people for 8.5 billion won is being promoted.
4) Support in entering overseas retail distribution chain and international distribution market
Business details: So that overseas sales routes can be secured for export products caused by
shrinking distribution stage when exporting to retail distribution networks overseas, the government
has been promoting support operations for making inroads into overseas retail distribution networks
since 2002.
Status of operations: In 2004, supported entry of 70 promising SMEs into overseas retail
distribution chains. In March 2005, supported participation of 15 South Korean companies in the
U.S. IT Purchasing Exposition held in Washington D.C.
5) Support of SME/venture company overseas, through public overseas support centers
Business details: Providing local market information and supporting activities of an export
marketing agent, etc. to be designate consulting companies, etc. with know-how on promotion
support overseas as private overseas support centers and fulfill various export demands that domestic
SMEs find difficulty fulfilling.
Status of operations: In FY2001, operations began with the setting up of 20 centers in 11 regions
including Japan, the U.S. and China. Since 2004, the company is setting up and has been setting up
and managing 49 centers in 16 countries and has projects underway for 183 companies to make
inroads overseas.
6) Support SMEs with their entry overseas and with exports through the “Export Incubator”
Business details: Incubators were setup in major countries overseas such that SMEs could be
established quickly that wanted to try to set up branch companies and local offices overseas, with
inexpensive office space provided as well as local marketing and bookkeeping and legal consulting,
etc.
Status of operations: through the SME Promotion Organization, starting with the Chicago Center
set up in the US in 1998, in FY2003 such centers have been set up in centers of overseas trade such
as Japan ([South Korea] Small Business Corporation Japan Office) and Washington D.C., L.A.,
Germany, China and so on. In FY2005, two locations were added in places such as Viet Nam and
136 companies are planning to enter by the end of August to make inroads into the local regions.
Business details: Discovering innovative, promising SMEs and building a global foundation by
attracting foreign investment from overseas venture capital funds by providing support in efforts to
attract foreign investments.
Current status of business: Selected companies are matched with venture capital and support
received such as company analysis for attracting investments and forming strategies to attract
foreign investments and 80% of operational costs are covered by the government.
69
(3) Strengthening the internationalization of SMEs
1) Strengthening bilateral international cooperation activities
Business details: the SMB administration is pouring efforts to coordinate a corporate environment
such that information related to market trends of main trade countries and corporate customs, laws,
regulations and so on as well as creating mutual profits from trade and investment activities between
two countries.
Current status of operations: June 2000 SME cooperation agreement between South Korea and
Italy; In November 2001, between South Korea and the US; in June 2001, between South Korea and
Mongolia; in December 2003, between South Korea and Taipei, in March 2005 between China and
South Korea. These agreements are providing a strong foundation for exchange in SME areas
between two countries.
2) Strengthening multilateral international cooperation activities
Business details: The SMB administration vigorously participates in international conferences held
as required by international organizations such the OECD and APEC, and aggressively and actively
speaks out for the interests of SMEs.
Activities at the OECD: the SMB Agency participates in the WPSME (Working Party on SMEs), a
part of the Committee on Industry and Business Environment in the OECD.
Cooperation with APEC: The Agency participates in the APEC “SME Agency Conference” held
once a year and the “SME Workgroup Conference” held twice and year and serves a major direct
support role in expanding regional market entry and cooperation opportunities of SMEs in South
Korea.
Other international companies: The Agency participates in international conferences and joint
projects held by international organizations such UNESCAP, WTO and WIPO under the UN and
plans active support for SMEs to make inroads in overseas markets.
3. Future Outlook and Expectations
(1) Improvements in support structure in policy funds: unprecedented reductions in support time
and procedures by utilizing online systems such as for issuing e-coupons, etc. and business
consulting operations+
The One Process Support Structure has been in effect since July 15, 2005, in a tie up with the
SME promotion organization and security institutions to tie up with policy funds and credit
guarantees. Through One Process, it appears that the time for borrowing money can be reduced and
direct/indirect costs of SMEs can be greatly reduced.
(2) “Embodiment of requested services” by increasing the satisfaction level through systematic
management with respect to customer complaints and government expansion with respect to the
onsite support of SMEs.
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From March 2005, the agency has been managing a “customer satisfaction office” system to take
care of various civic application work and the SME Onsite 119 for each local SME agency to
quickly grasp and resolve difficult points onsite in regional SMEs. The Agency is pouring efforts
into means to resolve issues of SMEs faster by utilizing these two systems.
(2) Boldly eliminating policies of precedent that are ineffective, and ensure policy effectiveness:
Boldly eliminate/adjust past polices that are not in keeping with changes in the times and
economic environment and provide support that can rapidly respond to the flow of globalization by
SMEs.
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Country: South Korea - SME
Company Name Nobtech Co., Ltd.
Industry Information communication device trade, domestic demand/clothing
imports/sales
No. of employees 20
Overseas offices Japan, US, Indonesia
Company URL www.nobtech.co.kr
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
(1) Export of information communication devices (Wireless Local Loop Phone): produces OEM
and own branded versions of the WLL Phone and exports to Indonesia, Pakistan and Sri Lanka.
Sales in 2004 totaled 700,000 dollars.
(2) Export of CDMA relay units: Exports R-tron relay units made by a South Korea relay specialist
manufacturer and exports to Indonesia, delivers to PT.TELKOM (the largest communications
vendor in Indonesia) Sales in 2004 totaled 1. 1 million dollars
(3) Peripheral devices for mobile phones: plans and produces peripheral devices for mobile phones
through Mody, a joint brand with SK Telecom and distributes to domestic markets (South Korea
produced, overseas producing in China and Taiwan. Operations started from 2005. Sales in 2005
totaled 7 billion won.
(4) Brand clothing business: Imports brand clothing from the US and Europe and supplies to sales
and whole sale through Internet shopping malls (www.brandmall.co.kr) and offline direct
marketplaces. Sales in 2004 totaled 800 million won.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
(1) Export of information communications devices (wireless Local Loop Phone)
1. Catalyst: being different from mobile phones, this phone is a mobile communication device that
can be exported by SMEs ( looking at the experience of mobile phone exports over several years),
therefore, participation by major companies is difficult and market value is low, and is an SME type
niche market, therefore, the company decided to invest and more forward in the area.
2. Possible risks: Competition with low cost products made in China
3. expectations for success: Since WLL business conducted in developing nations has quality and
price competitiveness, it was possible to continuously receive orders if the requirements of buyers in
the respective countries could be skillfully met. In contrast with other companies, the products of the
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company are built using a low cost structure and are expected to continue to sell over the next year.
(2) Export of CDMA relay units
1. Catalyst: The company has a good network with PT. Telkom, the largest communications vendor
in Indonesia as a partner in Indonesia, and since the company assert its intent to enter the relay
device delivery business, among the relay manufacturing companies in the country, it became an
export agent of products of R-TRON, regarded highly for its technology and quality.
2. Possible risks: Competition with low-cost products made in China and strategic marketing
3. Expectations for success: while in terms of technology and quality, the product is very competitive,
in terms of price they are more expensive than the products made in China; therefore, whether the
business succeeds or not is directly linked to what direction the communication vendor takes in
competing with future products made in China. If the company grasps the strategies of
communication vendors and if the company emphasizes the excellence of the technology and quality,
then it is determined that orders will continue to come in.
(3) Mobile phone peripheral devices:
1) Catalyst: As a result of participating in managing vendor operations bid when SK Telecom
Commerce business unit with which the company has long relationship of transactions started a
mobile phone peripheral device business, the company started successful bid operations. In a market
that does not have a market-leading brand, it was determined that in the case of distribution of
mobile phone peripheral devices through SK telecom which has 20 million subscribers, the company
could secure a lead in the peripheral devices market; thus the mobile peripheral device business was
launched.
2) Possible risks: aggressive marketing by mobile phone manufacturers
3) Expectations for success; Through the organic collaborative marketing with SK Telecom, South
Korea’s largest operator, the market expanded at a rapid pace, and within three years, mobile phone
peripheral devices were planned, produced and is expected to grow into the largest in the country as
a marketing company (the annual sales target for 2007 is at least 80 billion won)
(4) Brand clothing business
Catalyst: Since the time when the company’s president was at Itochu Corporation, it has retained an
overseas brand network that has built a human network. Through this network, the business was
launched after it was determined that profitability could be created in a niche market by importing in
parallel overseas brand clothing and miscellaneous goods and selling them in South Korea.
2) Possible risks: Lack of domestic consumer market
3) Expectations for success: By retaining competitive product sourcing and a domestic sales network,
sales will show growth trends and profitability through expanding directly operated points of sale,
continued growth is possible as long as rapid shrinking of the domestic consumer market does not
occur.
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3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
(1) Export of information communication devices (Wireless Local Loop Phone):
Initially, this had good profitability, but problems arose with the low-price offensives of products
made in China and became less profitable. For new products, we struggled to cut costs and created a
new cost structure: one which provides a certain amount of profit that can be sustained even when
facing low-price competition by Chinese products. For low-price markets, CDMA modules from
used products in South Korea were reused, and products less expensive than products made in China
have been supplied to the low-cost markets and sales are continuing.
(2) Exports of CDMA relay units:
While there were problems with installation, maintenance and repair of relay equipment since
there were no specialists in Indonesia, the problem was resolved by seconding engineers from South
Korea and training local resources for over a year. There were also many points of Indonesian and
South Korean business customs that did not match and there was a great deal of trouble in the initial
entry, but efforts were poured into adapting to the local environment and with the efforts of partner
companies in Indonesia, these problems were overcome.
(3) Mobile phone peripheral device business
Promotion of business was delayed due to self-interests among departments often seen in large
corporations, but by coordinating persistently with their opinions, the business was launched, and
progress was made.
(4) Brand clothing business:
Built current system by improving capability of internal human resources while going through
four years of trial and error due to lack of specialist human resources in brand clothing related
divisions.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
There is no public support with respect to the four business divisions.
5. Reason for success of your aforementioned business
(1) Export of information communications devices (Wireless Local Loop Phone):
1. Competitive price and excellent quality based on low-cost structure
2. Honest after-service support
3. Product development and proposals suited to the situation of the relevant countries
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4. South Korea’s excellent mobile phone related manufacturing technology
5. Proposals and sales of products in light of within the requested items of buyers as much as
possible
(2) CDMA relay unit exports
1. Excellent quality and technology
2. Localization of human resources related to equipment, maintenance and repair
3. Capable and honest Indonesian partners
(3) Mobile phone peripheral device business*
1. Product development and production responsive to market needs
2. Brand strategy
3. Establishment of systematic distribution system
4. Prompt management
5. Ability to respond flexibly to changes in the market environment
(4) Brand clothing business
1) Expansion of multi-product sourcing network
2) Product import and sales that can respond to the needs of consumers through parallel Internet mall,
directly operated points of sale, wholesale and retailer sales channels
3) Know-how built from trial and error over four years
4) Prompt management
5) Ability to respond flexibly to changes in the market environment
6. Future expansion of your business and your company’s vision
(1) Export of information communication devices (Wireless Local Loop Phone):
1. Pour efforts into developing overseas niche market that large corporations cannot reach and build
a stable export market
2. Export target sales of 20,000 units monthly/ 240,000 units/year (2006)
(2) Export of CDMA relay units:
1. Be a supply company of outdoor relay units in Indonesia
2. Supply total solutions related to relay units in Indonesia and build a new profit model
3. Target of sales of 500 units annually (2006).
(3) Mobile phone peripheral business
1. Planning of to become country’s top mobile phone peripheral company and grow into a
manufacturing and distribution company
2. Overseas export of mobile phone peripheral devices
3. Reach goal of annual sales of 30 billion won (2006) and 80 billion won (2007)
(4) Brand clothing business
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1. Growth into a reliable overseas name brand parallel import company with leading strength the
country.
2. Build 100 sales outlets (by 2006)
3. Build 5 directly managed points of sale (by 2007)
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Country: Malaysia - Institution
Organisation Name Small and Medium Industries Development Corporation (SMIDEC)
Organization Type Government Agency
Size Annual Budget: RM27.8 million (Development)
RM10.78 million (Operation)
Staff: 119
Overseas Network
URL www.smidec.gov.my
1. Basic idea and policy of the agency, institution or organisation to promote SMEs in the
globalisation (including, evaluation of the globalisation in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc), and key industries.
SMIDEC strives to create resilient and efficient Small and Medium Enterprises (SMEs), able to
compete in a liberalised market environment. The Corporation will promote SMEs to be an integral
part of the country's industrial development capable of producing high value-added parts,
components and finished products. SMIDEC will serve as the national focal point for the overall
development of SMEs in the country.
VisionVisionVisionVision
To be the leading organisation in developing SMEs that contribute to economic growth and
enhance competitiveness of Malaysia.
MissionMissionMissionMission
To transform the SME sector into a vibrant, competitive, resilient and to be fully integrated into
the manufacturing and services sector.
2. Measures and budget (including financial support) to promote SMEs in the globalization 3. Outlook and prospects
The SME development will focus on harnessing the potential of the services sector to further
stimulate economic growth. Emphasis will be given to enhancing the contribution of sub-sectors
such as transport services and logistics, distributive trade and back office services. In addition,
support will be given for high value adding manufacturing related services, such as R&D, D&D and
packaging.
SMEs are expected to contribute to the long-term goals of achieving business and industrial
competitiveness in an increasingly globalised economic environment. SMIDEC will give priority
to the creation of a more conducive business environment, together with the institution of a cohesive
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policy and regulatory framework and institutional support to stimulate vibrant entrepreneurial
activities, the expansion and diversification of existing firms and the creation of more start-up firms
in new potential areas of growth.
Policy and regulatory support will be targeted at promoting the development of dynamic,
innovative, entrepreneurial and competitive firms with a global outlook.
There will be greater availability and accessibility to funds for SMEs. The special needs of different
categories of SMEs – micro, small and medium enterprises – will be addressed. However,
increasingly, financial support for SMEs will be market driven and based on performance.
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Country: Malaysia - SME
Company Name Zeito Plastic Components Sdn Bhd
Type of Business Manufacturing – precision plastic components
No. of Employees 120
Overseas Network
URL www.zeito.com.my
1. Details of the business
A manufacturer of plastic components for the medical, electrical, electronic, automotive and
telecommunication industries, Manufactures using injection moulding machines – 37 units. We also
do related secondary processes, printing, spraypainting, hot stamping and assembly.
2. Background, prospects and reasons for the SME to start up the business
The Company was set up in 1992 by 2 of the directors, Mr PC Leong and Mr B S Chew. It started
with a paid-up capital of RM250,000.00 with only 4 machines. At the time, there was a demand for
plastic injection moulded products by many MNCs who were moving a lot of production to
Malaysia. Mr Leong had experience in injection moulding and both had extensive management
experience.
3. Problems/difficulties the SME facing before/after starting up the business (financing, human
resource management, structure management, lack of information<marketing>, language, and
so on)
Main problems:
1. Management structure – whether to use a loose structure or adhere to a strict one
2. Marketing – without the benefit of a large structure, marketing initiatives were haphazard
3. Human resources – new companies usually do not attract good staff. Had to make do with
available staff.
4. New company – credibility issues had to be faced
5. No track record on quality and deliveries
4. Availability of public support (please detail public support actually obtained, if any)
Lately, we have had a few grants and services that we have managed to utilize which
has gone some way to assisting us to grow eg. Implementation of a ERP solution
company wide, getting certification to ISO 9001 and 14000 standards – all done using
grants provided by SMIDEC.
5.Critical success factors of the business
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a. good customers
b. emphasis on quality and customer service
c. a high degree of perserverance from the shareholders/management
d. continuous re-investment
e. strength in technical issues
f. priority for people first
6.Outlook of the business and your company’s vision
The Company faces many challenges namely;
i. Shifting of customers to China
ii. Rising raw material prices
iii.Moving up the next level in the technology ladder.
The Company’s plans in the short term are to boost its existing business by introducing new
services as well as to grow its medical products business.
Strategies to counter the challenges faced include;
i. Looking for new customers in the non-traditional markets of Europe like the
Scandinavian countries.
ii. Taking on lower volume projects with a higher value added content
iii. Focusing on Quality and Productivity
iv. Continuous reinvestment and upgrading of equipment
v. Expand usage of IT
vi. Joint RND with customers which minimizes customers’ risk and also allows the
Company to acquire knowledge resources.
With this in place, in the longer term, it intends to pursue its strategy of being an integrated
technology provider by venturing into design and development of complete products so that it can
offer itself as a one-stop centre for the procurement of various types of high end manufactured
products.
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Country: Mexico - Institution
Organization Name Underministry for Small and Médium Enterprises/ Ministry of Economy
Organization Type State agency, public institution or industry organization
Size
Overseas Network 7 (USA, Canada, Uruguay, Belgium, France, Switzerland, Singapore)
URL www.economia.gob.mx/
1. Basic idea and policy of the agency, institution or organization to promote SMEs in the
globalization (including, evaluation of the globalization in overall SMEs policy, key areas
to promote (export, import, alliance with foreign companies, foreign investment, etc.), and
key industries)
To continue improving standards of life of Mexican SMEs and convinced that until today the
made efforts represent the precedent that is required to turn into realities the objectives established in
the World Economy, Mexico like other Economies are turning their eyes to the SMEs to impel their
creation, development and integral consolidation, through the implementation of a support system to
promote their competitiveness and to create a friendly environment and new entrepreneurial culture,
that satisfy the demand of the domestic market and manages to be inserted successfully in the
international market.
Today we have turned our eyes to the small and medium size enterprises to impel its creation,
development and consolidation based on the design, adoption and implementation of a systemic
approach based on competitiveness of the government to create a friendly environment that
promotes the small and medium enterprises to become competitiveness.
Mexico is implementing a support policy for SMEs aimed at enhancing their competitiveness so
they can compete successfully in the local and global markets. in this way, SMEs will be able to
make a major contribution to the economic growth and sustainable development of Mexico.
We consider SMEs as one of the pillars for sustainable economic growth, they have the potential
to make possible a more equitable distribution of the national income, to generate the amount and
quality of jobs that population demands and to increase social welfare.
Sinergy entails the participation of all the public and private institutions that mantain a
relationship SMEs that reflects in the programs that guide the function of the Underministry for
Small and Medium Enterprises.
Our challenge is to create competitive SMEs that can face the trade opening. For that reason,
mechanisms of interchange and cooperation with other Economies has been fostered in the matter of
qualification and training programs, access to the financing, technological innovation, access to the
information, and agreement of actions between the public and private sectors and academic and
investigation institutions have been created.
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Like other Economies, we have implemented a lot of public policies for the development of the
SMEs that includes shared financing, industrial opening, innovation and technological development,
work in equipment for the modernization, increase in productivity through the qualification,
consultancy, development of suppliers, conditions to facilitate the financial access and economic
development of regions and specific sectors.
In order for SMEs to take full advantage of the process of facilitation and liberalization of trade
and investment, Mexico through the Underministry for Small and Medium Enterprises has
orchestrated a lot of actions based on:
• Financial Support
• Human Resources Development
• Information Access
• Market Access
FINANCIAL SUPPORT
The main purpose should be to make financial and capital markets more accessible to SMEs by
developing schemes in accordance with their specific needs.
For that reason in Mexico the creation of a guarantees credit system , accompanied with the
support and promotion for the installation and fortification of companies of risk capital is impelled
that direct their amounts of investment in the SMEs
Also a system of microcredits for people is orchestrated who do not have access to the resources
necessary to initiate or to let also grow their SMEs increasing the nonbanking generation of schemes
of social bank and intermediaries.
HUMAN RESOURCES DEVELOPMENT
Mexico embrances the conviction that human capacity building is necessary for participating in
the new economy. Information and communication technology has changed our way of working and
doing business, so access to the tools of the information age is becoming critical to full involvement
in economic and social life.
In this context, the challenge is to develop in cooperation with other Economies and the SMEs
themselves human resource capabilities such as entrepreneurship, business and managerial skills,
technical capabilities, technology sharing, linguistic skills, understanding of diferent cultures and
knowledge of business practices and legal requirements in different markets.
INFORMATION ACCESS
There is a need to enhance the development of user-friendly and efficient information access
systems to government policies, technology, intellectual property regimes, markets and potential
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business partners. A first step in this direction would be to gather in one integrated network the
available scattered information systems catering to SMEs, thus improving the opportunities for
strategic alliances, offshore business and cross-border trade.
MARKET ACCESS
Market access is critical for the efforts of SMEs to take full advantages of the economic
globalization. Hence, it is a high priority to continue expanding the process of liberalization and
facilitation of trade and investment.
On the other hand, the Internet era has given SMEs new and so far unknown opportunities to enter
the global marketplace. International trade has been dominated by a handful of large transnational
companies, which could afford the high costs of market entry, however the swift doiffusion of the
internet today will enable more SMEs to benefit from the global market. Thereby a mayor task for
economies is to create the conditions and facilitate the application of information and
communication technology, in particular in traditional industries and SMEs to improve their
economic performance.
Foster the Small and Medium Enterprises (SME’s) participation in both national and international
events, that enhance commercial exchanges, bilateral and multilaterals commercial agreements,
alliance with foreign companies. The Under ministry promotes the organization of matchmaking in
several sectors such as commerce, industry and services. The Under ministry works to improve the
financial access to SME’s through the assistance of other public and privates institutions.
2. Measures and budget (including financial support) to promote SMEs in the globalization
Through the “Fund for Supporting the Micro, Small and Medium Enterprises”, the Underministry
support services of training, consultancy, systems of information, technological innovation, training
of advisors, consultants, trainers and promoters, centers of entrepreneurial linking; relating the others
federal programs, as the federal entities and districts. The 2005 Budget of the fund is $160,055
thousands USD (1,727 millones de pesos)
3. Outlook and prospects
Today, Mexico is an open economy to worldwide markets with reduced public deficits, low
inflation and the potential to face the dynamic of the worldwide markets.
This condition implies that although it has advanced in some areas, it´s clear that towards the
future, the challenge is to consolidate the productive process, to fight the poverty and to generate
jobs that the economically active population lead to a necessary conclusion: the creation of wealth,
uses and value added in SMEs must have the highest priority for the government, the productive
society and the institutions of the sector knowledge.
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Today the worldwide economies are in a while of reduced growth, that can lead to recession
periods, magnified by events that have affected the globalised economy.
If in the past the economic policies they privileged the structural reforms, that still are necessary
to consolidate, today the nations, in the frame of the new economy, require to concentrate their
efforts in increasing the productivity of each one of their companies, as well as of the public
economy and institutions as a whole, so that it is translated in better salaries for the workers, utilities
for the companies, increase of the internal market and high contributions in the public property.
Some key elements that define the new economy are an effective system of innovation, the
development of human resources, an outpost technology of the information and communication, as
well as an environment that gave security the accomplishment of businesses.
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Country: Mexico - SME
Company Name Red Interamericana de Comercio (RISCA)
Industry Product sales in supermarkets
No. of employees 16 (8 in Mexico City, 8 in Panama)
Overseas offices Panama
Company URL www.tradepointmex.com
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
Product sales in self-service stores (such as canned Mexican foods, plastic products, brushes,
gloves, etc.)
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Established in 1997. The joint manager was an international trading consultant who started
business in trade in Mexico. An opportunity came to sell Mexican products abroad. The company
decided to open an office in Panama given the development in Central and South American markets
in the times to come and because of the ease of logistics (transport) and investments. The company
made advance surveys of what Mexican manufacturers had offices in Central and South American
countries and what commerce was not constant (few dealers).
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Since the funds were received from the company’s suppliers, there were no problems concerning
finances. However, despite surviving the competition, in Mexico, tax burdens were heavy and health
insurance costs, electricity and fuel costs including gasoline were high.
4. The existence or nonexistence of public support during these times (please explain in detail if
you did receive support)
To participate in trade fairs, the company received support from an SME fund of the Mexico
Ministry of Economy for 50% of costs for securing exhibit space and transport costs of materials for
samples and exhibits.
Support was also received from the federal government for 50% of international transaction
consultant fees and 30% of human resource training costs.
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Support was received from BANCOMEXT (national trade bank) to participate in trade fairs.
5. Reason for success of your aforementioned business
The company had an opportunity to enter commerce with Mexican products that targeted
supermarkets in Central and South American in particular.
The joint manger was an international transaction consultant and had knowledge and information
concerning international transactions, thus activities were easy.
The largest factor was that there were suppliers who could obtain capital support.
6. Future expansion of your business and your company’s vision
The company is considering opening sales offices in other Central and South American countries
such as Costa Rica and El Salvador in the future. At that point, the company will not only be simply
exporting, but hopes to invest and set up offices, warehouses and the like. As for the mid- to
long-term, the company hopes to export products with even greater added value to North America,
Europe or Asia.
It is expected that the Mexican government will continue its free trade policies in the same way as
Panama with the Free Trade Agreement.
In the case of APEC countries, being able to do business is interesting just when it became a free
trade zone. However, information concerning APEC is lacking, such as how to manage, for example
human resources, support, technology, etc. in that region.
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Country: New Zealand - Institution
Organisation Name New Zealand Trade and Enterprise
Organisation Type Government agency
Size Annual Budget: NZ$141.3 million Staff: 600
Overseas Network 38 offices overseas
URL www.nzte.govt.nz
1. Basic idea and policy of the agency, institution or organisation to promote the globalisation
of SMEs. Include: evaluation of globalisation in overall SMEs policy, key areas to promote
(export, import, alliance with foreign companies, foreign investment etc) and key industries.
New Zealand Trade and Enterprise (NZTE) is the New Zealand government’s trade and economic
development agency and is funded by the Ministry of Economic Development. Its responsibilities
include reducing the economy’s heavy reliance on exports of primary products and boosting the
value-added contributed to the economy by smaller companies. SMEs represent around 96% of NZ
businesses and are seen as the engine of the NZ economy. NZTE’s mission is to increase the
international connections of New Zealand businesses and help them become more internationally
focused and capable of engaging in global markets for trade, acquisition of knowledge and foreign
investment. NZTE does this by facilitating collaboration between industry, government and
international partners.
NZTE’s current strategy is to identify sectors of the economy offering high-growth potential and
to assist businesses that will contribute most to the growth of those sectors. The sectors NZTE is
currently focussing on are biotechnology, creative industries, food and beverage, information and
communications technology (ICT), education, wood building and interiors, specialised
manufacturing and tourism. In the manufacturing sector for example NZTE works with many
businesses that produce low volume, high value niche products. NZTE assists these companies in
developing manufacturing clusters, long-term growth strategies, and access to export markets.
Targeted industries in the manufacturing sector have included aviation, engineering, designer
furniture, advanced materials and marine manufacturing.
2. Measures and budget (including financial support) to promote the globalisation of SMEs.
NZTE’s budget is directed at providing a range of export development services and market
development programmes to SMEs in the industry sectors it targets. It provides customised
assistance to SMEs with high growth potential in the form of management capability appraisal,
advice and training to help them make better investment decisions. There are a range of services and
grants offered by NZTE to SMEs wanting to increase their international activities. In the 2005/06
Budget the government allocated funds for the following business support schemes:
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Foundation Services
1) Business Information and Advice (NZ$7.813 million)
Includes a range of business support services and programmes that provide information and advice
to business, focusing in particular on small businesses, entrepreneurs, start-ups and new exporters.
2) Training and Capability Building (NZ$11.962 million)
Training to improve the management capabilities of small businesses, entrepreneurs, start-ups and
new exporters.
Growth Services - Identifying and Leveraging New Business Opportunities (NZ$30.805 million)
This fund provides support for NZ businesses with medium to high growth potential, to enable them
to identify and pursue new international business opportunities.
Enterprise Development Fund (NZ$5.274 million)
Assistance for entrepreneurs and businesses to undertake advanced training, engage a business
mentor or seek specific management advice and/or undertake international market development
activities.
Market Development Assistance Fund (NZ$6,107,000)
Encouragement for the integration of more New Zealand businesses into global markets by
facilitating the creation, development and expansion of overseas markets for New Zealand goods,
services, intellectual property and know-how.
Source of figures: NZ Government Budget 2005/06.
3. Outlook and prospects
NZTE plays a key role in implementing the current Labour Government’s overall economic
strategy, called the Growth and Innovation Framework, which is designed to increase NZ’s per
capita income ranking to the top half of the OECD. This strategy places special importance on
growing businesses and industries in which New Zealand is internationally competitive and where
there is potential for high growth. It has recognised the high growth potential of the biotechnology,
ICT and creative industries sectors, which have therefore been given special attention and funding.
NZTE has been given the task of identifying and taking advantage of opportunities for economic
development by connecting international opportunities with New Zealand’s industry and business
capabilities. It will continue with its objective to develop internationally focused businesses. It also
aims to increase SMEs contributions of sustained added value to the NZ economy, as a result of their
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engagement in international markets.
The NZ Government has been developing a framework to evaluate the agency’s effectiveness.
Over the next three years NZTE will be working with the Ministry of Economic Development and
the Ministry of Foreign Affairs and Trade to evaluate the outcomes of its various business support
programmes.
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Country: New Zealand - SME
Company Name Interactive Technologies Ltd (ITL)
Type of Business Software development company
No. of Employees 50
Overseas Network Distributors in Australia and Singapore
URL www.serkoonline.co.nz
1. Details of business
Interactive Technologies Limited (ITL) is a software development company that provides travel
solutions and services to Australasia’s leading travel companies through the SERKO® brand. The
company develops solutions for the travel procurement industry. The SERKO® brand is one of the
only products in the world to serve the world’s top five travel companies in multiple countries. Over
the years ITL has been re-engineering the procurement of travel across the travel lifecycle and
provides services within the retail, corporate and online travel procurement markets.
2. Background, potential and reason for SME to start up the business
The two co-founders, who met while studying IT at university, joined forces in 1998 to create a
travel software development company after identifying opportunities in the travel market. Originally
established to fill a gap in the domestic retail travel market, they quickly saw the opportunity to take
their technology international.
3. Problems/difficulties your company faced before/after setting up the business (financing,
human resource management, structure management, lack of information, marketing,
language etc)
Problems ITL faced initially included access to structural management and business planning
processes, a lack of relationships with both potential customers and suppliers and
availability of financial resources.
4. Availability of government support (from NZTE). Please detail public support actually
obtained if any.
- In March 2004 ITL received NZ$5000 from NZTE under its Enterprise Development Fund for the
commissioning of market reports on the corporate travel market in the UK.
- In October 2005 ITL received funding from NZTE under its Growth Service Fund to enable them
to commercialise on a business opportunity stemming from marketing efforts in Singapore. The
support took the form of a 50% rebate to defray travel costs and the costs of producing marketing
materials for making presentations to potential business partners.
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- ITL has also been selected as a finalist for the 2005 New Zealand Trade and Enterprise (NZTE)
Export Awards.
5. Critical success factors of the business
ITL’s achievements can be attributed to the continual involvement of end-users in the design and
advancement of the solutions, which they believe is directly related to the high adoption rate and
success of the product.
The ITL management team believes it has a unique and effective approach to innovation and
leadership, which it calls the Critical Stakeholder method. The critical stakeholders for ITL are
clients, distributors, the ITL team, the company owners, critical suppliers and their strategic partners.
For each of these critical stakeholders they have a vision. These stakeholder visions have been
broken down into the ideal or “dream” situation they would like to achieve. The ITL management
team has prioritised this detailed vision and uses the vision priorities as “drivers” as they formulate
product and service strategies. The goal is to use innovative thinking to translate the “desirables”
into “deliverables”.
6. Outlook of the business and your company’s vision
ITL’s revenue has grown over 550% over the last 3 years and was rated as the 62nd Fastest
Growing Company in Asia Pacific by consultancy firm, DeLoitte. In December 2004 ITL was
floated on both the New Zealand and Australian stock exchanges under the Gullivers Travel Group
(GLS).
Exports now account for almost 80% of the company’s revenue. Over the last two years ITL has
expanded in Australia with marketing opportunities now being established in Singapore. It expects to
start planning its entry into the UK and USA markets in the near future.
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Country: New Zealand - SME
Company Name New Zealand Pharmaceuticals Ltd (NZP)
Type of Business Manufacturer and exporter
No. of Employees 92
Overseas Network Agents, distributors and direct sales in Japan
URL www.nzp.co.nz
1. Explanation of the business, including import / export activity, International business relationships, foreign market penetration, recent business development
New Zealand Pharmaceuticals Ltd (NZP) is a leading industry player in the development of the
biotechnology industry in New Zealand. It manufactures and exports pharmaceutical intermediates
and diagnostic products for the world’s leading pharmaceuticals and biotechnology companies. It
also produces a range of dietary supplements.Products include bile acids and derivatives, specialty
synthetic carbohydrates, proteins, peptones and amino acids.
NZP is certified cGMP and holds EDQM Certificates for most animal-derived products, Drug
Master Files and a Medicines Licence. NZP exports almost all of its products and the primary market
is Japan. NZP uses a network of agents and distributors and is also developing direct sales to
customers. It is developing two major initiatives, one in the dietary supplement and functional food
area through a subsidiary company called Just the Berries Ltd (blackcurrant powders and juices) and
carbohydrate chemical synthesis.
2. Background, prospects and reasons for the SME to start up the Business NZP has been operating for over 30 years, but has recently begun experiencing very high growth
and taken on an extra 15 staff in the last year. The company was originally established as a joint
venture by the meat industry and Tasman Vaccine Laboratory with the aid of a grant from the
government funded Development Finance Corporation in the early 1970s. Its purpose was to add
value to the meat industry (which in those days exported only frozen animal carcasses), by
developing a commercial steroid extracted from gall bladders to be used as a raw material for the
pharmaceutical industry.
3. Problems/difficulties the SME faced before / after setting up the Business (financing, human resource management, structure management, lack of information, marketing, language etc)
NZP faces the problem of obtaining information about the market in Japan from independent
sources. Currently information from Japan is accessed primarily through a Japanese part owner of
NZP. The constraints on gathering information from an independent source are the language barrier
and the financial cost of hiring technical consultants that can communicate in both Japanese and
English.
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4. Availability of public support (please detail public support actually obtained if any) NZP is privately held with strong cash flows. It has however received support from NZTE in the
form of two grants in 2004 coming to a total of around NZ$500,000 under its Growth Service Fund
scheme. These funds were granted to assist business development in its export markets for chemical
synthesis, specializing in carbohydrates. NZP also received extra personnel support under NZTE’s
Pathfinder Programme without cost to NZP to hire a marketing consultant with the aim of increasing
sales to overseas customers.
5. Critical success factors of the business
Meeting the customer’s expectations of value for money and being able to deliver the correct
product on time and within the required specifications.
6. Outlook of the business and your company’s vision The outlook for NZP is very bright. Our vision is to be a leading producer of biochemicals, dietary
supplements and carbohydrates.
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Country: Peru - Instituion
Organization PROMPYME (El Centro de Promoción de la Pequeña y Micro Empresa;
small/mini company promotion center)
Organization format Government
Scale Budget: 1.7 million dollars annually; no. of employees: 97
Overseas offices None
URL www.prompyme.gob.pe
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
The purpose of this center is to promote small and micro company funds and services in Peru to
access markets in Peru and abroad. To this end, the center conducts the following activities to
develop products/services and develop/facilitate IT technology.
Market outlook: provide information needed for small and micro companies to enter markets in
various fields in Peru and abroad.
Suitability of supply: To promote the “suitability of supply” by small and micro companies for
products demanded by the market, the center provides services such as technical training and
technical cooperation. In so doing, the center develops a mechanism that aims for stronger product
competitiveness in addition to enabling access to financial markets.
Promotion of commercialization: Once “suitability of supply” is complete, the center promotes
commercialization of products development with medium to large companies using the
commercialization mechanisms in the market.
The center supports small and micro companies in all economic fields, and does not limit to
particular fields. However, currently it is taking initiative in expanding the direct or indirect export
capabilities of small and micro companies.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
Responses to globalization:
(1) Trade consultation
(2) Promotion of participation by small/micro companies in international events
(3) Strengthening of collaborations among companies with latent export capabilities
(4) Promotion of indirect exports by strengthening tie-ups between small/micro company producers
and export companies.
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Estimated budget for capability development project (GECEX) to form export clusters: 1.5
million dollars to finance (World Bank)
3. Future Outlook and Expectations
Future outlook for the GECEX project:
This project aims to develop the capabilities of small/micro companies to participate in export
clusters suited to the demands of international markets. The project period is for two years, from
December 2004 to December 2006 and comprises three stages. The first stage is “strengthening the
structure” (2005) wherein the capabilities of center staff and staff in local governments (10 states)
are developed. Surveys are conducted with 3,000 companies in 10 states of which 2,500 companies
that can export in the future are registered in the center’s information system. The second stage is
“strengthening small /micro companies” (2005-2006) wherein surveys of 1,800 companies’ business
assessments are surveyed, of which 800 will undergo capability developed to begin exporting. The
third stage is “business collaboration” (2005-2006) wherein 240 companies are chosen using a
vertical labor specialization scheme. Also, around 10 consortiums are formed with 10-15 companies
per consortium.
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Country: Peru - SME
Company Name Alpa Exportaciones (Alpa Export Company)
Industry Apparel trade
No. of employees 2
Overseas offices None
Company URL None
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
Export of alpaca and cotton goods, etc.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The company was established to export apparel goods to Venezuela as the founder had connected
with Venezuela.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
Problems with quality of supplied raw materials and deadlines for delivery of raw materials.
4. The existence or nonexistence of public support during these times (please explain in detail if
you did receive support)
Trade consultations with PROMPYME and export promotion commission PROMPPEX
(Comisión para la Promoción de Exportaciones)
5. Reason for success of your aforementioned business
Diversification of markets and customers
6. Future expansion of your business and your company’s vision
The company plans to develop new importers and diversify markets.
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Country: Peru - SME
Company Name Consorcio Artesanias MERINO S.A.C. (Merino)
Industry Sale of handicrafts
No. of employees 8
Overseas offices Sales office in Miami, US.
Company URL www.armesac.com
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
Manufactures handicrafts for export. Employs skilled craftsmen in various regions of Peru, and
provides them their own workplaces as well as various facilities.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The founder had experience in handicrafts. Later he studied trade and understood that export was
necessary to develop a company, thus he began to export.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
The first problem faced was that of finances. Then it became clear that operation costs were too
high. Thus, the company was affected by price competition with Mexico and China in the US market.
Also, while the company is attempting to enter the German market, language problems are a barrier.
4. The existence or nonexistence of public support during these times (please explain in detail if
you did receive support)
Company employees studied trade at PROMPYME training course. Thus the company gained
information on good methods that should be chosen to develop new markets. The company also
participated in seminars held by PROMPYME.
5. Reason for success of your aforementioned business
To succeed, innovative designs and colors are extremely important. These considerations are
relatively significant when entering a new market.
6. Future expansion of your business and your company’s vision
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Looking at the medium-range, the company plans to focus on the US and Europe and will focus
its efforts into exports. In the long-term, it plans to set up an overseas office to effectively make use
of distribution channels. It also believes that training skilled workers, and design innovations in
particular, are the most important in achieving medium to long-term success.
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Country: Philippines - Institution
Organization Name Department of Trade and Industry – Region XI
Organization Type Public Institution
Size Annual Budget (Year 2005): Php 55.19M
Staff : 120 (include the Regional Office and Provincial Offices and
Ebiz Center)
Overseas Network Foreign Trade Service Corps (FTSC) in 26 international posts
URL/Website www.dti.gov.ph (Maintained by DTI Head Office)
www.emindanao.ph (Maintained by DTI-XI)
1111....Basic idea and policy of the agency, institution to promote SMEs globally (including overall SME policy in addressing the challenges of globalization, key areas to promote such as exports, imports, alliance with foreign companies, foreign investments, etc. and key industries.)
Major Policies:
- The Magna Carta for small enterprises (Republic Act 6977 as amended by RA 8289). This
special law lays down the basic policies for SME promotion, provides definition of SMEs,
and directs the establishment of the institutional framework for the SME promotion system.
The Magna Carta stipulates a mandatory lending quota for financial institution at 6% of
loanable funds to small enterprises and 2% to medium-size enterprises.
- Barangay Micro-Business Enterprises (BMBE) Act (RA 9178) was enacted to support
eligible micro-enterprises as well as the informal sector through incentives to registered
BMBEs, exemption to income tax, reduction in local government taxes and fees, exemption
from payment of minimum wages, financial support from government financial
institutions, and technological assistance from government agencies.
Industry Clustering approach
Through the advocacy of DTI-XI, the development and promotion of SMEs in the region is
carried out through industry clustering approach which is now adopted and integrated in the
Davao Region Medium Term Development Plan 2004-2010. Eight (8) industries based the
region’s comparative advantage have been prioritized for the planning period, namely: Banana,
Mango, Coconut, Seaweeds, Wood, Mining, Tourism and ICT (focusing initially on e-services).
Comprehensive and focused interventions for improving managerial and technological
capabilities and for tapping business opportunities shall be provided to both the individual
SMEs and the industry clusters.
This strategy is intended to enhance and sustain competitiveness of the SMEs in the local
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and international markets.
Industry Clustering involves forging alliance with international industry players and investors
in the national and international scene. At the local level, it requires active private-public
partnership and collaboration.
Davao Express Business Center
DTI-XI also advocates the improvement of the operational environment for SMEs with the
establishment of the Davao Express Business Center (EBiz) which is housed at the DTI
Office. The center provides a one-stop shop for business registration and licensing, investor
assistance and investment incentive facilitation. It hopes to achieve the following
objectives : simplify business registration process, reduce red tape, and improve the survival
and growth of small businesses.
2. Measures and budget (including financial support) to support SMEs globally Approximately 65% of the DTI-XI annual budget is allotted for the discharge its business
development function. The remaining amount is for its consumer welfare, regulatory and
administrative function.
Performance on Business/SME Development is measured the following:
- amount of investments generated (with annual increase of 15%)
- jobs created/generated (with annual increase by 15%)
- exports earnings (with annual increase by 10%)
- number of SMEs assisted
- industry associations/networks established and maintained
3. Outlook and prospects Davao Region is expected to approximate its 2005 growth target of 4.5 for the following reasons:
- The Region to sustain investments in terms of project commitments
- The region to sustain export sector performance
- Strong government support to M/SME
- Services sector to get boost from trading activities, ICT and tourism
- BPO locators to intensify interest in the Region as the industry expands
- Mining industry to be revived with the Pujada Nickel Exploration Project, Kingking Copper
Project and Amacan Copper Gold Project.
- Agriculture will remain strong
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Country: Philippines - SME
Company Name HUBPORT INTERACTIVE INC.
Type of Business IT Solution Provider
No. of Employees 35
Overseas Network UK and US
URL www.neuracom.com / www.hubportinteractive.com / www.neuracom.co.uk
1. Details of the business
Hubport Interactive, Inc. provides a wide range of IT development services: e-commerce online
stores, corporate websites, web applications, business applications (accounting, inventory and
payroll), mobile applications and graphic design.
2. Background, prospects and reasons for the SME to start up the business
Hubport Interactive, Inc. was founded in 1998 when the web was starting to make an impact in
commercial activities in the region. It was commissioned to develop the first government website
of Davao City, and was also the first business portal for SME's in that same territory. This business
portal eventually expanded to the entire island of Mindanao.
Hubport Interactive, Inc. focuses on IT development for SME's, and in return, is highly supported
by the business community, making it the leader in IT / Web Development for SME's.
3. Problems/difficulties the SME is facing before and after starting up the business (specifically
in the aspects of financing, human resource management, structure management, lack of
information <marketing>, language, etc.)
The initial hurdle of Hubport Interactive, Inc. was managing the adoption of web technology by
SME's who were only beginning to be aware of the advantages of these technologies for global
competitiveness. Climbing this initial adoption curve also resulted in financial difficulties brought
about by slower growth of revenues. The company had to invest in marketing efforts aimed at
educating the target market.
At the same time, maintaining skilled human resource also was a challenge. Investments in
training for skills are sometimes lost as talents move to companies located in Metro Manila, offering
higher salaries.
4. Availability of public support (please detail public support actually obtained, if any)
There are no available public supports for our industry here in Davao City.
5. Critical success factors of the business
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The critical success factor in Hubport Interactive, Inc.'s business is developing and maintaining a
sharp pool of project managers and programmers, keeping them up-to-date with the latest
technologies. They are the brains that run the engine of Hubport Interactive, Inc. and its network of
clients.
6. Outlook of the business and your company’s vision
The company will continue to ride the global outsourcing trend by marketing its services to SME's
beyond the borders of Davao City and the Philippines. It will form alliances in various developed
nations to provide best value in delivering web technologies and services.
It will also be developing web products such as business web application packages and website
properties to grow its intellectual property assets.
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Country: Philippines - SME
Company Name Lane Systems Inc
Type of Business Solution Provider focusing on Telephony, Business Systems, and Auto-ID
No. of Employees 20
Overseas Network
URL http://www.lanesystems.com
1. Details of the business
Software development and consulting focusing on computer telephony, business systems, auto-id,
and others. Our expertise is in building software and we also do custom software that either stands
alone or integrates with large computer systems as add-ons for specific extensions.
2. Background, prospects and reasons for the SME to start up the business
We started 1995 as an offshore software provider for North American companies. Our prospects
are large corporations who needed software services at a competitive price. Reasons for starting
up is because Davao City, for the longest time, has been producing human resources in IT for Cebu,
Manila, and overseas. We’d like to take advantage of the human resources here in Davao while
doing outsourced projects.
3. Problems/difficulties the SME is facing before and after starting up the business (specifically
in the aspects of financing, human resource management, structure management, lack of
information <marketing>, language, etc.)
The difficulties of the companies has always been the following (in proper order)
International Marketing
Human Resource – as to hiring since most of the good graduates leave Davao
Financing – there are no I.T. friendly financing
4. Availability of public support (please detail public support actually obtained, if any)
There are no available public supports for our industry here in Davao City.
5. Critical success factors of the business
The success factor of the business is our perseverance of staying in the business. We have our
ups and downs and during the down times, it is our dream to hopefully succeed in the international
software marketplace that keeps us hanging on.
6. Outlook of the business and your company’s vision
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We look forward for more acceptance of
Outsourcing projects to Davao City
The local market for the products and services we offer
We always believe in our company’s slogan “Process improvement through technologies” and
we’ve been able to successfully produce and continue to offer cutting edge business solutions for
modern business challenges.
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Country: Russia - Instituion
Organization OPORA (National Russian SME Association)
Organization format Social organization
Scale Head office in Moscow and 71 branch offices throughout Russia
Overseas offices None
URL http://www.opora.ru/
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
This organization serves as a single voice for SMEs nationwide and makes proposals, etc. to the
government concerning the drafting of bills and amending policies, etc. It cooperates with the
government to create an environment such that SMEs can achieve healthy development. By
promoting innovation, it strengthens the competitiveness of SMEs. To promote SMEs, the
organization realizes an effective division of roles (PPP) with the government and private sectors.
2. Specific policies, measures (including the financial side) and respective budgets
supporting responses to the globalization of SMEs.
Making proposals to the government and Federal Assembly related to the drafting of new bills to
promote SMEs. It cooperates with implementation of policies by participating in project competition
selection committees and cooperating in formulating policies by the economic development and
trade ministry to promote SMEs. It participates and proposes specific SME promotion projects in the
government’s corporate competitiveness improvement council, which is chaired by the prime
minister. It supports the construction of industrial zones and techno parks by the Public Private
Partnership (PPP). It lobbies the government to reform the tax system to promote SMEs, such as
reducing the import tariff for high-tech equipment. It reduces excessive government participation
and eases regulations with respect to SME activities by promoting government reform. It lobbies the
government concerning measures against bureaucratic stagnation.
3. Future Outlook and Expectations
Including OPORA proposals, the new government reforms put forth by the Russian government
are the most important in terms of easing regulations for promoting SMEs, and specific
improvements can be expected in the business environment for SMEs.
Eighty percent of SMEs focus on commerce. Even if a company wanted to start up in another area
such as manufacturing, there are many restrictions and regulations that have made it difficult for
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SMEs. However, there are now managers who have achieved a certain degree of success and who
want to expand their business into new areas. It is important to provide support, particularly in
respect to systems, such as enhancing the incubator system, so that these entrepreneurs can expand
their businesses.
Further SME innovation is needed. To that end, the organization is lobbying the government to
enact favorable measures. Adapting businesses to high-tech environments is one such innovation;
thus it is important to build an environment such that foreign companies can bring capital and
technology into Russia.
An effective partnership between public and private sectors is crucial. For example, building an
environment in which SMEs can startup easily such as in the form of industrial zones and techno
parks. In such cases, the government can build the infrastructure such as the preparing the land for
such zones and setting utilities, etc. while the private sector can manage the industrial areas and
techno parks built there as well as carry out specific operations such as factory construction, etc.
To promote SMEs, the organization has surveyed experiences and model cases in Europe, North
America and Asia , but, it wants to absorb knowledge in particular from Japan, which has significant
experience in innovation. It wants to collect information regarding defining an SME,
measures/systems for promoting SMEs, division of public and private sector, and specific industry
zones/techno parks.
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Country: Russia - Institution
Organization Ministry for Economic Development and Trade of the Russian Federation
Organization format Russian governmental agency
Scale Total of number of employees at the ministry: 2,049 (as of November 1,
2005)
Overseas offices Russian trade deputy offices set up in 86 locations in 74 countries
URL http://www.economy.gov.ru/wps/portal/english
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
To open economic doors in tandem with the participation in WTO and to respond to the
globalization of the economy, the Ministry believes that SMEs fulfill an important role in increasing
employment and strengthening industrial competitiveness. The Ministry, as a government body,
promotes the increase of SMEs themselves as well as innovation in SMEs
In increasing the number of SMEs themselves, efforts have been centered on easing regulations,
such as simplifying procedures for setting up companies, reducing items requiring approval and
reducing national governmental control .
In promoting innovation, a business incubation function has been provided, but additionally, the
Ministry has been supporting venture funds and innovation funds to promote SMEs moving into
exports starting this fiscal year.
In implementing these polices, basic approaches include 1) tie-ups between the federal
government and local governments; 2) Selecting targets for subsidies concerning SME promotion in
with the cooperation of other economic organizations in addition to related agencies of the federal
government and 3) tying national treasury subsidies with private investments and using the part from
the national treasury subsidies to enhance the infrastructure.
2. Specific policies, measures (including the financial side) and respective budgets
supporting responses to the globalization of SMEs.
Investment projects are subsidized to promote SMEs in regions using competitive selection
methods based on the SME national support law and laws and regulations set by the government
concerning 2005 budget outlays of the Russian Federation for the national support of SMEs.
The policy, which started from last fiscal year and takes full effect from the current fiscal year
onward, the budget scale for FY 2005 in outlays from the Russian government was approximately
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1.5 billion rubles (1 dollar=28.8135 rubles: Central Bank public rate as of November 11, 2005) and
is expected to reach 3.0 billion rubles in FY2006. Regional governments are also contributing the
same subsidies.
A competition selection subcommittee, consisting of representatives from agencies related to the
MEDT and economic organizations concerned with promoting SMEs, has been set up to review and
select specific investment projects put forth by regional governments and award subsidies to selected
projects approved by the Cabinet.
The fields targeted by the subsidies are not industry specific, but are for supporting business
incubators, promoting innovation and export. In supporting business incubators, an office building is
being renovated and an infrastructure is being built using national treasury subsidies and to draw in
SMEs. For promoting innovation, seven local governments including Moscow City, Moscow State
and the Republic of Tatarstan have made joint investments, and private investors are being brought
together to form a fund. Micro-financing for SMEs is being supported, a micro-finance
subcommittee has been set up upon deliberations with city banks throughout the country, and
banks are encouraged to finance SMEs.
3. Future Outlook and Expectations
Systemizing the maintenance of infrastructure to promote SMEs will be an issue in the future. A
number of measures exist for maintaining the current infrastructure; however, it is not systematic.
As for promoting exports, there is a proposal to build a national bank in FY2006 to specialize in
promoting exports. Presently, the RUS Ex-Im bank (Russian export-import bank) already exists;
however, it is on a small scale and limits its investments to focus on major companies. The
government has been debating whether to increase investments in the RUS Ex-Im bank or to create a
new bank based on the RUS Ex-Im Bank.
In particular, there are expectations for the role of foreign companies in creating venture funds.
There are still few venture investors in Russia with professional skills and know-how. Creating an
effective venture fund is an important issue; thus it is necessary to attract excellent investors. The
majority of Russia’s investors are major banks, and venture funds for SMEs are significantly less.
Consequently, cooperation from foreign companies and investors is becoming crucial.
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Country: Russia - SME
Company Name Medpharmservice
Industry Development and product of medical facilities
No. of employees 70
Overseas offices None
Company URL http://www.mfservice.ru/English/Aboutcompany/
1. Overview of foreign exports and imports, domestic transactions with foreign
companies, cooperative relationships with foreign companies (entrusting of production,
sales contracts, etc...), or expansion into foreign markets, etc...
The company has acquired ISO9001:2000 and IQNet certification and is carrying out trade
negotiations to begin exporting its products to Belarus, Ukraine, Turkey and Pakistan.
In 2004, the company visited an international trade fair in Düsseldorf. In 2006, it plans to exhibit
at international trade fairs in Dubai and Düsseldorf.
It is in negotiations regarding cooperation with a German company, with the establishment of a
joint corporation under consideration.
However, regarding the relationship of company’s business with globalization, while considering
foreign involvement and tie-ups with foreign countries, the company has developed domestic
products through Russian R&D and competed with foreign products in aiming to acquire market
share in the Russian market with domestic products in the relevant fields that ,have in fact been
dominated by foreign products up until now.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The company is located in Kazan, the capital of the Republic of Tatarstan in Russia. Kazan is a
city with great potential in R&D as well as production areas and mutual cooperation has been active
between companies, research institutions and institutions of higher learning.
With this as the background, graduates of the then Kazan Aviation College and a group of young
internal medicine doctors started the company by creating being the first in Russia to create all of the
required facilities, equipment and machinery needed for endoscopy surgery in 1993.
Endoscopic surgery began in the 1980s in Germany and France, but later expanded all over the
world, including Russia. However, equipment for such surgery was brought in from German, U.S.
and Japanese companies. It promoted sales of the company’s products to medical institutions in
Russia while introducing endoscopic surgery.
Much attention from various medical institutions in Russia was given to the products as the first
domestically made products. Compared with the foreign products, the strength of the company’s
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products was low costs without significant sacrifices in quality.
3. Problems you experienced around the time you started business and how you solved
those problems (personnel deficiency, establishment of internal systems, deficiencies in
information gathering, capital procurement, language barriers, etc...)
When the company started up, the major problem it faced was the extremely high interest on the
financing needed. There were also various issues including having the company assets used for
collateral and problems specific to the market in Russia.
In moving into foreign markets, the company did not have an in-house specialist with
international business knowledge and skills and there was also a lack of information. The company
still does not have the leeway to develop human resources itself. Also measures of the
government/public organizations etc. supporting such activities are insufficient.
4. The existence or nonexistence of public support during these times (please explain in
detail if you did receive support)
In addition to there being absolutely no support from the government, the company has high taxes
to pay.
However, to add for fairness's sake, in the 1990s the government of the Republic of Tatarstan
adopted a general program to set up facilities for endoscopic surgery in treatment institutions in the
Republic and to that end funding was used from the President of the Republic Fund. Thanks to this
program, all of the surgical treatment institutions in the Republic of Tatarstan have abdominal
endoscopy surgery units and the company’s products have also been used in such facilities.
5. Reason for success of your aforementioned business
(1) Place with latent ability in basic sciences, R&D and production organization such as Kazan
(2) Jointly working with technicians and surgeons
(3) The products represent a new expanding market in Russia
6. Future expansion of your business and your company’s vision
In the ten years since the company was founded, it has successfully impacted the leading
companies in Russia that produce devices and materials for endoscopic surgery which is comprised
of over 150 items. Endoscopic surgery is a process that is spreading worldwide and the number of
hospitals that employ it continues to increase. The company’s products business is seen as promising
in both Russia and abroad.
The company is making efforts not only with ongoing production but with the development of
new products. From 2004, it has been developing an ultrasound image dissector through
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collaboration with an expert group of the Bauman Moscow State Technical University (the top
technical university in Russia on par with MIT in the U.S.). The company has also begun providing
medical institutions with instruments for fixing unstable ribs, which was developed in cooperation
with Vishnevsky First Aid Science Institute in Moscow. In cooperation with experts of the Semashko
Railroad Hospital, the company has developed equipment and materials for entering through the
underarm and creating an artificial cavity to perform surgery while protecting a woman’s organs in
the chest region.
For business developments in the future, the company will introduce new technology, modernize
existing equipment and purchase new equipment that it lacks, thereby strengthening its material and
technical foundation. It will strengthen relationships with the endoscopy associations in Russia and
science and medicine related centers in the country as well as develop and test high technology
products that are competitive in markets throughout Russia and abroad to add to the continuous
production track.
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Country/Region: Singapore - Institution
Organization Name International Enterprise Singapore
Organization Type Agency under the Ministry of Trade and Industry
Size Annual budget: - Staff: 450
Overseas Network 37 overseas offices
URL http://www.iesingapore.gov.sg
1. Basic idea and policy of the agency, institution or organization to promote SMEs in the
globalization (including, evaluation of the globalization in overall SMEs policy, key areas
to promote (export, import, alliance with foreign companies, foreign investment, etc.), and
key industries)
Formerly known as the Singapore Trade Development Board (TDB), International Enterprise
Singapore - or IE Singapore for short - is the lead agency spearheading Singapore's efforts to
develop its external economic wing.
Mission and Vision
IE Singapore's mission is to help Singapore-based companies grow and internationalise
successfully. Our vision is to be an expert agency in firm-level growth, market intelligence and
internationalisation strategies We offer a wide range of services in Singapore and overseas to help companies shorten their
learning curve and make the right connections through a 3 C framework (Competency, Connections,
Capital). In doing so, we provide market information, and assist enterprises in building up their
business capabilities and finding overseas partners.
At the same time, IE Singapore works to position Singapore as a base for foreign businesses to
expand into the region in partnership with local companies. Our vision is for Singapore's economy to
be entrepreneurial and knowledge-intensive, with globally competitive manufacturing and services
sectors. The country's unique advantages of strategic location, stable government, competitive
workforce, and pro-business environment make it the ideal launch pad for globalisation.
With 37 overseas centres around the globe, IE Singapore is uniquely equipped to help companies
succeed. With a successful, time-proven track record, IE Singapore will assist Singapore-based
companies to build up their business through the work four key business groups, the Corporate
Group, Enterprise Group, International Operations Group and Capability Development Group.
To provide market-centric opportunities for trade and investments, IE Singapore launched Network
Indonesia in May 2003, making it the third such platform after the successes of Network China and
Network India a year ago. These networks unite the many efforts of existing chambers and
associations, and provide a platform for firms to discuss and pursue business opportunities in the
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three expanding economies. To date, the three networks have organised and supported over 160
seminars and events, and led several overseas trade and investment missions. The three networks
have been instrumental in bringing about business deals and consortia formation.
IE Singapore is also signatory to more than 30 co-operation agreements with trade promotion
agencies and small and medium enterprise bodies worldwide. In 2003, we saw relations with key
markets intensified at the provincial level - such as the launch of the Singapore-Zhejiang Economic
and Trade Council (SZETC) and the Singapore-Liaoning Economic and Trade Council (SLETC),
and the setting up of Jambi Promotion Office and the Vietnam Centre in Singapore. These councils
and centres will greatly facilitate two-way investment and trade flows between the Singapore and the
markets they represent.
All these initiatives were undertaken against a backdrop of Singapore establishing more Free
Trade Agreements with our trading partners. These FTAs represent super-highways on which our
goods can access the international market.
Our FTAs with Australia and the US went into force in July 2003 and January 2004 respectively.
Negotiations with India and Korea were launched as well. Trade talks with ASEAN and the People's
Republic of China, Bahrain, Canada, Egypt, India, Republic of Korea, Mexico, Pacific Three (New
Zealand, Chile, Singapore), Panama, and Sri Lanka have been announced or have commenced.
To enhance the practical benefits of such FTAs for businesses in Singapore, we launched an FTA
outreach programme that aimed to explain and highlight the workings of the agreements and the
opportunities they present, and to bring companies to partner countries for a first-hand look and to
meet prospective partners.
2. Measures and budget (including financial support) to promote SMEs in the globalization
To provide greater customised services for our clients, we launched a new subsidiary, Global
Business Insights (GBI), in November 2003. GBI operates two divisions - Market Strategy Services
(MSS) and Business Support Offices (BSOs). Our BSO network has grown cover locations in
Shanghai, Beijing,Chengdu, Chennai, Dubai, Frankfurt, Guangzhou, Ho Chi Minh City, London,
Mexico City, New York and Tokyo. Our market entry consulting arm, MSS, opened its regional
office in Shanghai. During the year, GBI provided quality services to more than 100 companies in
China, India, Southeast Asia, Japan, Latin America and the US.
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During the year 2003, we organised over 100 business missions worldwide. These missions
explored overseas opportunities and assisted companies in a diverse range of industries, including
automotive, medical technology, logistics, real estate, electronics, lifestyle and F&B.
Missions were also organised to help Singapore-based companies source for business
opportunities with multilateral agencies such as the World Bank and Asian Development Bank.
In addition, we organised participation by Singapore-based companies in many local and overseas
fairs. Companies that took part in these fairs were grouped under the Singapore National Pavilion
which provided a strong brand name to attract foreign buyers for their products.
We believe that branding and design are critical to a company's ability to export its products and
services. In December, we partnered with the Ogilvy Group to launch the Global Brand Forum.
The forum anchored Singapore as a thought leader in the subject of branding. It featured
world-leading brand creators and practitioners - such as Anita Roddick, Narayana Murthy, Tom
Kelley, Scott Bedburry, Tom Peters and Deepak Chopra - and attracted over 700 delegates from 12
countries.
The year also saw the successful completion of the 2nd Singapore Brand Award which
recognises Singapore brands that have achieved success internationally; Singapore's top 14 brands
today boast an estimated total combined brand value of S$7.9 billion.
We also launched the "International Partners Programme" (iPartners) in October to catalyse the
formation of 40 consortia in three years, and aim to generate S$1.5 billion in new overseas sales. By
encouraging Singapore-based firms work in consortia and groups, they can widen their offerings to
compete for larger projects in international markets.
To strengthen firms' access to capital, IE Singapore ran several workshops and seminars in
partnership with financial institutions in 2003. Specialised themes such as trade financing, insurance,
cross border asset and cash-flow financing were discussed. During the year, our "iFinance
Consulting Programme" further supported eight companies in activities such as acquisition of
foreign entities, mergers of local companies, advice on initial public offerings, and overseas tax
issues. Under our "Regionalisation Finance Scheme", a fixed-cost financing programme assisted
12 companies in regional expansion.
In 2003, more than 1,000 Singapore-based companies benefited from our "Double Tax Deduction
Scheme" in support of their overseas marketing activities. This amounted to over S$39 million of
marketing expenses qualifying for double tax deduction, resulting in tax savings of S$8.6 million for
our firms.
In the area of design, we launched the "Design for Internationalisation Programme" which aims
to serve 1,000 companies in the next three years. To promote the adoption of design as a corporate
strategy agenda, IE Singapore organised the 8th International Design Forum which attracted over
10,000 trade visitors and 300 delegates.
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To develop human capital for internationalisation, IE Singapore launched the "Manpower for
Internationalisation Programme". More than 650 executives were trained with internationalisation
skills through overseas assignments.
To enable Singapore-based enterprises to keep abreast of business competencies and overseas
investment opportunities, IE Singapore's Resource Centre published a number of titles in 2003.
Among the publications produced were "Singapore Enterprises In China", "Venture India", "China
Business Law: A Guide for Lawyers and Entrepreneurs", "Singapore Brand Journey: Singapore
Companies in the Global Marketplace" and "Innovative Singapore Companies".
While we look to global markets for future growth, we also welcome foreign enterprises to base
themselves in Singapore. In November 2003, we launched the "International Enterprise (IE) Hub
Programme" to develop Singapore as the international hub for foreign enterprises to reach out to the
regional market, and to partner Singapore-based companies to jointly explore new markets.
3. Outlook and prospects
Year of Internationalisation 2004
We believe 2004 to be a watershed year, heralding the next phase of external economic growth,
one that is different in structure, substance and strategy. It marks the beginning of a decade of
internationalisation which will be characterised by a trio of strategic thrusts driven by IE Singapore -
catalysing private sector-led internationalisation; maximising Singapore's connectivity with growth
markets; and promoting export of services, leveraging on Singapore's brand name.
As we continue on the journey to internationalisation, we are ever mindful that there will be as
many unexpected events as there will be opportunities.
IE is continuing these efforts for 2005 and beyond to assist in the internationalisation of Singapore
SMEs.
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Country: Singapore - SME
Company Name Ya Kun International Private Limited
Type of Business Café chain operator and franchisor
No. of Employees 120 (direct employees); 300 (franchise-wide plus direct employees)
Overseas Network Indonesia, Taiwan, South Korea
URL www.yakun.com
1. Details of the business
Ya Kun Kaya Toast was founded in 1944 in Singapore. It is a contemporary Singapore-style café
offering traditional “kaya jam” toasts and a variety of hot and cold beverages. There are 21 outlets
in Singapore, 10 in Indonesia, 5 in Taiwan and 2 in South Korea. All overseas outlets are
franchised.
Ya Kun has the largest market share for kaya toast cafés in Singapore. It is also the winner of
several prestigious awards including Superbrand and SPBA Heritage Brand, and is regularly featured
in Singapore’s public media. Its kaya factory is HACCP certified, and supplies to all outlets in
Singapore and overseas.
Presently, Ya Kun is in talks with various overseas parties to introduce its unique café concept to
markets including Japan, Hong Kong and China.
2. Background, prospects and reasons for the SME to start up the business
Ya Kun Kaya Toast was founded as a coffee stall by Mr Loi Ah Koon (“Ah Koon” is the dialect
name of “Ya Kun”), an immigrant from China’s Hainan Island. It was set up as a means of
livelihood to provide for Mr Loi’s large family. The early-day customers were largely labourers
and poor migrants from the Telok Ayer Basin (near to the Singapore River). Over time, especially
after the 1970s, as the area transformed itself into Singapore’s financial hub, white collared workers
and professionals started to patronize Ya Kun Kaya Toast. By then, the humble coffee stall has
become a famous landmark in Singapore’s “food map”.
When Mr Loi passed away a few years ago, his youngest son, Mr Adrin Loi, saw the tremendous
goodwill in the name of Ya Kun and the potential of the business. He had the vision that the
number of outlets could multiply many folds across Singapore, and even overseas. Expanding the
business would also be a way for him to honour his father’s good name and turn it into a Singapore
legacy. He then proceeded to enlarge the management team and strengthen its internal capabilities,
which included the protection of its unique trade mark and the development of a robust café
operations and franchise system.
By 2001, Ya Kun has started franchising in Singapore. It also introduced the lifestyle of eating
traditional toasts and beverages in a modern café setting, thereby giving a new twist to Singapore’s
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food scene.
3. Problems/difficulties the SME facing before/after starting up the business (financing, human
resource management, structure management, lack of information<marketing>, language, and
so on)
The greatest challenge facing the SME is the lack of availability in financing. Singapore banks
are generally reluctant to lend to start-ups, especially those in the food & beverage industry. As
such, little or no investment is made in building good infrastructure and systems for the business.
Another major problem is the lack of talents willing to work for the SME, especially those in the
less-glamorous industries (companies in the IT sector will find it easier to attract talents than, say, a
retail business). As a result, the management of the SME is often weak and unprofessional.
Usually, the SME receives a lot less attention from the government (be it any government) than, say,
the MNC receives. As such, they often have to grope in the dark and grapple with whatever
resources they have to succeed. Finally, going overseas poses another challenge for the SME.
Many have gone and failed. Perhaps it’s due to the lack of understanding of the foreign markets.
4. Availability of public support (please detail public support actually obtained, if any)
The Government of Singapore has been very supportive of Ya Kun. Many cabinet ministers
have cited its name in public speeches and case studies. The Singapore Tourism Board has been
particularly active and helpful in promoting Ya Kun’s name and café in its publicity materials and
events. SPRING Singapore provided funding for the franchise development and food-related
consulting projects. International Enterprise Singapore, another government agency, has shown its
support during the launches of Ya Kun’s overseas outlets. The Economic Development Board is
also keen to support Ya Kun, and both parties are currently working out the details (which are
confidential at this moment).
The local media have also been generous in giving Ya Kun very good coverage and publicity, and
even accorded it the status of a Singapore icon.
5. Critical success factors of the business
(1) The business owner’s vision is very important. It steers the company in the right direction, and
motivates its people as well. (2) Investments in brand and system development are also important,
as these will form the foundation of the business over time. (3) Quality of products and customer
service is another critical success factor. By emphasizing on this, Ya Kun has been able to please
customers for more than 60 years. (4) Innovation and consistent improvements are what keeps a
successful business going in the long term. This also helps to differentiate it from its competitors.
Finally (5) having the right people onboard ensures that the management is well-rounded, and is
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capable of executing the owner’s business strategies.
6. Outlook of the business and your company’s vision
We believe Ya Kun can become a unique pan-Asian food & beverage business. It will be a
modern business concept that does not lose touch with the tradition of the food itself. The kaya
itself could some day become a global product, just like Singapore’s other global product “Tiger
Balm”.
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Country/Region: Chinese Taipei - Instituion
Organization Industrial Development and Investment Centre, Ministry of Economic
Affairs
Organization format Public organization
Scale
Overseas offices None
URL http://www.idic.gov.tw
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
The IDIC was established in 1959 under the Council for US Aid. In 1973, it came under the
jurisdiction of the Ministry of Economic Affairs where it remains to the present day. The principal
roles of the IDIC are to encourage investment in Taiwan by overseas investors including overseas
Chinese, support Taiwanese companies making investments overseas and support the procurement of
overseas personnel for companies in Taiwan. Recently, some Taiwanese companies that expanded
overseas have started wanting to shift their operations back to Taiwan. IDIC also provides support
for these corporations.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
There are 80,000 corporations in Taiwan with combined revenue of 43 billion US dollars. Most
of these corporations are SMEs, therefore support for SMEs is a key part of IDIC’s work. In
particular, the organization encourages domestic-orientated SMEs who are reluctant to expand
overseas to consider the merits of doing so. To that end, IDIC provides finely tuned services
divided into three stages: 1) Preparatory 2) Implementation 3) Follow-up. For stage 1), IDIC
provides various information about prospective host countries, assists in the establishment of a web
site, holds regular briefing meetings for investors and organizes overseas inspection tours. In
stages 2) and 3), IDIC overseas branch offices provide support and problem-solving services through
intergovernmental negotiation.
3. Future Outlook and Expectations
IDIC’s future plans divide into two key areas. The first of these is to attract foreign capital to
Taiwan. IDIC will continue efforts to improve the investing environment such that foreign
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investors will find Taiwan attractive.
The second key area is to support Taiwanese companies expanding overseas. Expanding
overseas markets particularly attractive to Taiwanese firms are the Indian market and the Central and
Eastern European market (new members of the EU). The IDIC is working to collect information to
ensure that Taiwanese companies do not fall behind in entering these markets. These activities
correspond to the initial preparatory stage of the three state scheme outlined above.
However, the organization is does not intend to provide any extra support beyond the current level
for companies wishing to invest in the Chinese market, where the attention of many other countries
is focused. This is because IDIC believes Taiwanese companies already have a sufficient level of
investment in China, and for national security reasons it does not believe it desirable to increase
investment in China any further.
Regarding investment in Japan, generally speaking Japan is expensive and not very appealing to
the majority of Taiwanese corporations. However, in certain specific fields, Taiwanese
corporations may be able to enter the Japanese market. Therefore, it is important for Japan to
disseminate information on what fields they would like Taiwanese companies to invest in, and why
doing so would benefit them.
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Country/Region: Chinese Taipei - Instituion
Organization Small and Medium Enterprise Association, Ministry of Economic Affairs
Organization format Public organization
Scale
Overseas offices
URL http://www.moeasmea.gov.tw
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
The SMEA was established in 1981, but its predecessor, the International Economic Collaboration
Committee’s Small and Medium Enterprise Guidance Team was established in 1966.
There are 1.16 million companies in Taiwan (as of 2004), of which 97.8% are SMEs. Therefore
support from SMEs is an important pillar of the government’s economic policy. The principal roles
of the SMEA are to propose strategies for development of SMEs, provide guidance and supervision
for SMEs, implement various surveys of SMEs, assist in the introduction of new technology, assist
in the development of personnel and provide management guidance. However, to deal in particular
with the demands of globalization, SMEA has formulated a national development plan entitled
"Challenge 2008". In addition to the critical areas of providing support for the research and
development required to develop high value-added products, providing support for personnel
development, strengthening information collecting and dissemination capability and implementing
environmental policies, Challenge 2008 also provides support for the following areas: the
establishment of platforms for starting new businesses and business incubation, the integration of
financial support systems for SMEs, strengthening capabilities of SME management and guidance
systems, improving the technological capabilities of SMEs, upgrading the business environment for
SMEs and the establishment of new business projects and subsequent aftercare.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
SMEA has budgeted for the following projects:
(1) Projects related to human resource development (50 billion Taiwan dollars)
(2) Projects related to the development of knowledge-based industry (100.5 billion Taiwan dollars)
(3) Projects related to global strategy (108 billion Taiwan dollars)
(4) Environment related projects (212.9 billion Taiwan dollars)
SMEA’s concrete policies can be divided into three categories: consulting and information
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provision, incubation and financial support. SMEA’s consulting services revolve around the
provision of information for SMEs attempting to start up new business projects. SMEA’s incubation
services have involved the establishment of 83 incubation centres since 1996. SMEA’s financial
support includes providing loans through various commercial banks, organizing loans to SMEs at
preferential rates (3% as opposed to standard interest rates of 8% to 10%). Furthermore, SMEA
provides active support for the development of human resources required to start up new business
projects and has also established a system to supply integrated support for R&D at SMEs, from the
development of technology through to actual commercialization.
3. Future Outlook and Expectations
The key multilateral relationships are with OECD, WTO and APEC. The key bilateral
relationships are with Japan, US, India, China and countries in Central and Eastern Europe.
Currently, global investors are placing increasingly more emphasis on the Indian market. India and
Taiwan have a good, complimentary relationship. In other words, Taiwan is internationally
competitive in the hardware market, whereas India is particularly strong in the software market, as
apparent from India’s booming digital contents and movie production industries. SMEA expects
that leveraging this complimentary relationship will lead to very much stronger economic ties.
Incidentally, the Xinzhu Science Park employs a large number of Indian engineers and Taiwan feels
it very natural to have a good relationship with India.
Turning to China, numerous Taiwanese companies are already active in the Chinese market.
Recently, however, problems including tax increases and rising labor costs have led to the
withdrawal of a significant number of companies. That said, the degree of dependency on China
remains high, and in the future SMEA would like to disperse this concentration of investment.
Through organizing such events as the "Match Make Seminar" and the "Taiwan Trade Virtual
Market", SMEA works to provide information on new markets.
The organization is also working to promote increased opportunities for exchange with APEC
countries through its "Incubation Forum" and "Businessperson/ entrepreneur centers".
Central and Eastern Europe is an unknown market for Taiwanese firms, and carries a substantial
element of risk, but by establishing a trust fund to be 80% of the companies list, SMEA believes it
can encourage companies to invest there.
Taiwanese companies have learned a lot from Japan, and will need to continue learning from
Japan further. As such, Japan remains an important partner. Throughout the world, it is considered
an objective fact that Japan still maintains a superior position in a variety of fields. If Japan
actively disseminates information about its expertise, then Taiwanese companies can be expected to
acquire an even deeper interest in Japan.
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Country/Region: Chinese Taipei - Institution
Organization Taiwan External Trade Development Council (TAITRA)
Organization format Public organization
Scale 700 employees (Taipei headquarters only) Three regional branch offices
including one in Kaohsiung (Gaoxiong).
Overseas offices Overseas branch offices in 30 countries.
URL http://www.idic.gov.tw
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
Established in 1970. The Taiwanese equivalent of JETRO. Principally funded by government
subsidies with additional revenue from membership fees of member companies. Major operations
are supporting overseas expansion of Taiwanese corporations and supporting alliances between
domestic corporations and foreign corporations wishing to invest in Taiwan. Particular emphasis is
placed on arranging trade exhibitions and negotiations. The organization does not implement any
special SME policy, but the overwhelming majority of its clients are SMEs, and therefore by default
its major role is providing support for SMEs. Note that TAITRA’s mandate does not include
providing financial support.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
The majority of Taiwanese SMEs are manufacturing firms, and as such SME policy focuses on
providing support for manufacturing firms to shift their production centers overseas. The
destination for the vast majority of these firms is China. However for reasons of national security,
TAITRA does not wish to increase the level of investment in China and , in fact, would rather it
decline. Therefore, one important role is to search for alternative host countries to replace China.
One important criteria for alternative host countries is an active economic relationship with Taiwan.
As such, TAITRA considered countries including Japan, U.S., South Korea, Australia and New
Zealand. However, all of those countries have particular advantages and disadvantages, and
TAITRA has yet to find the country attractive enough to replace China.
TAITRA’s second major SME policy is to provide information to Taiwanese companies. If
expanding into a country other than China, there will be many unknowns, and therefore providing
information about such countries is becoming increasingly important. As companies demand an
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ever more diverse range of information, TAITRA responds to those needs by implementing not only
market surveys, but also by providing a range of detailed information including information on
tariffs and comparisons between the industrial products of the country in question and those
produced in Taiwan.
3. Future Outlook and Expectations
TAITRA has been successfully carrying out its mission for over 30 years and in the future intends
to continue fulfilling the same role. However, TAITRA is also considering expanding into the
consulting business. This is because, in the near future, consulting services are likely to become
increasingly important in accurately understanding contemporary needs and providing accurate
information and finely-tuned services to Taiwanese companies expanding into a variety of regions.
Regarding investment in Japan, a Taiwanese chemical manufacturer moved its production base to
Japan at the end of last year. Although high costs were an issue, the presence of a very large,
high-quality consumer markets meant the move had merit. TAITRA believes that, rather than
taking a wide-ranging approach, Japan can encourage further investment from Taiwanese
corporations by offering individual target corporations favorable conditions for investment.
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Country/Region: Chinese Taipei - SME
Company Name Moxa Technologies Co., Ltd
Industry IT (Designer and manufacturer of multiport serial boards).
No. of employees 290 employees
Overseas offices USA, Germany, China
Company URL http://www.moxa.com.tw
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
Moxa Technologies was established in 1987 by five former classmates from the same high school.
The Taiwanese name for the company, 404, was the number of their class. The company designs
and manufactures multiport serial boards. Into 2003, the company split into three entities, Moxa
Technologies, Moxa Networking and Moxa US in order to increase focus and efficiency of its
businesses. As the company is an IT-related corporation, it expanded overseas right from the outset.
North America is the company's major market and , since 2003, the company has focused North
American operations in Moxa US. Moxa Group’s total capital is 220 million Taiwan dollars. In the
field of multiport serial board design and manufacture, the company has grown into the world's
third-largest and Asia's largest corporation. Last year, the company was among the top 300 largest
corporate tax contributors in Taiwan. Moxa sells products developed in-house and does not import
goods from overseas or collaborate with foreign companies.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
Moxa was set up by an engineer at a renowned high-tech firm who decided to leave the
company,and persuaded his former classmates who were working as software developers to join him
in establishing a new business. At the time, the world was in the grip of a high-tech boom, and
they predicted their chosen field would continue to expand. At the same time, developments in
Taiwan, such as the establishment of the Xinzhu Science Park favored high-tech corporations. In that
environment, the group's founders decided the chance of success was high, and took the risk of
setting up the company. At that time, the environment and conditions for high-tech related firms,
including government support systems, were very good.
3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in information
gathering, capital procurement, language barriers, etc...)
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At first the company allied itself with a computer manufacturer and produced computer-related
products. However in manufacturing industry, it is impossible to avoid layoffs, and the company
wished to develop into an organization that did not have to lay off its employees. Therefore, they
focused on the field of ‘soft assembly’ and worked to build their own sales channels. Moxa is a
group of Taiwanese software specialists. As the company expanded, problems of capital and
language difficulties did not arise.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
The software industry does not require vast amount of capital, therefore Moxa’s own capital was
sufficient for growth. Moxa’s technology was developed in-house and therefore public support was
not required.
5. Reason for success of your aforementioned business
The most important factor in in-house software development is technical ability. Moxa was
blessed with a wealth of high-quality personnel, including its founders. However, engineers have
strong desires to be independent, and in some cases engineers left Moxa to establish rival firms.
Although this is a significant problem for Moxa, the founders also left other companies to establish
the firm and therefore realize that the important thing is not simply to be satisfied with the current
technology, but continually strive for better technology. Therefore, competition with rival firms is
also considered a stimulus for corporate vitality.
6. Future expansion of your business and your company's vision
In the IT industry, technological progress is continuous, and competition is extremely fierce.
Therefore, companies are constantly required to reinvent themselves. Moxa’s policy is to take two
intersecting axes, one of original vision and one of strategic vision, and focus its core businesses on
the point where those axes meet. To be more precise, technology breeds new technology, and new
technology breeds new markets. That is the original vision, which could also be described as the
supply side. However, if original technology does not meet the needs of the times, new markets
will not form. Therefore we also need to emphasize strategic vision, or an accurate understanding
of market needs, and feedback such information into the supply side. Moxa believes that if the
company can supply products that accurately meet market demand, it will continue to survive as a
leading company in this industry.
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Country/Region: Chinese Taipei - SME
Company Name Triad International Corporation
Industry Trading company specializing in textiles
No. of employees Around 100 employees (around 50 employees in Taiwan)
Overseas offices China, USA, Canada, Mexico, Europe, Middle East, Asia
Company URL
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
Established in 1976. Specialist import and export trading company dealing in various textile
products. Products for export include textile materials and finished products. Major export
destinations are North America (USA, Canada, Mexico), Europe, Middle East, and various countries
in Asia. North America accounts for 50%-60% of exports. Most imports come from the
company's factories in China. When the company first moved its production facilities overseas, the
destination was Shanghai. The company dispatched 8 Taiwanese employees to set up the factory.
As production expanded, the number of Taiwanese employees dispatched to the factory was
expanded to 15.
The company deals with Japan via Japanese trading companies including Marubeni, Sumitomo
Trading Corporation and Nissho Iwai Corporation. However, Japanese consumers have a diverse
range of tastes and demand high quality standards. However, despite these demans, the volume of
orders is low, and therefore transactions with Japan are not profitable. On the other hand,
consumers in North America have more unified tastes and place large orders. Therefore it is easier to
make profit on these transactions. For these reasons, North America is Triad’s largest export
market.
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The founder, Mr. Lin, established the company after leaving his former place of work. In the
beginning, the company was involved in a different industry, but transformed itself into an importer
and exporter of textile products after realizing that it could not compete with established companies
in the industry. The company selected the textiles business due to its high cost - high risk nature
which meant that there were few competitors inside Taiwan. Banks were also actively interested in
investing in the company, and just 10 years after its foundation it expanded into the US market.
3. Problems you experienced around the time you started business and how you solved those
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problems (personnel deficiency, establishment of internal systems, deficiencies in information
gathering, capital procurement, language barriers, etc...)
In the textile industry, competition with foreign firms is very intense. Competition involves
aspects of both supply and demand, but in both areas, there are three important elements to be
considered: Price, quality and service. The reason that Triad Corporation has been able to survive
competition with foreign competitors is that rather than treating each of these elements separately,
the corporation has considered them as a package in order to take appropriate measures.
Human resources development is a particularly important factor for success in the trading industry.
The corporation pairs experienced staff with young inexperienced staff, so that the older staff
members may instruct their junior colleagues. This method has proved effective. As a result,
business know-how has passed smoothly from experienced staff to younger staff, and the
corporation has avoided the problem of insufficient human resources.
When the company moved its production base overseas it chose China, therefore there were no
problems of language or cultural friction. When it comes to sales, rather than negotiation skills
which require language ability, the key to success is price, quality and service. The most important
thing for salesmen at a textile trading company is to brush up their business know-how.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
The company has been in business for over 30 years. During that period, Taiwanese
private-sector banks were very enthusiastic with regard to corporate lending. Therefore, the
corporation has not received any support other than the provision of capital from private-sector
banks, and, in particular, has not received any governmental support.
5. Reason for success of your aforementioned business
As stated previously, the first major reason for the corporation’s success is that it considers the
three elements of price, quality and service as a single package, and takes appropriate action based
on this concept. In other words, if the three elements are considered separately, then even if you
improve one element the other elements may remain unsatisfactory, and as a result you run the risk
of failing to provide a competitive product. On the other hand, in this industry, the market changes
very rapidly with regard to both supply and demand. Therefore, the development of human
resources that can deal rapidly with these changes is another major success factor.
6. Future expansion of your business and your company's vision
Recently, global attention has been focused on the emerging markets of BRICs. In the case of
India, while it certainly has potential as an export destination, India's domestic market is already
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controlled by Indian companies, and therefore we believe there is little room for foreign company
participation. Furthermore, Indians have more ability in this industry than Chinese, and
competition with Indian corporations in other global markets is extremely fierce.
Turning to China, the company considers the Chinese market as being of continual importance as a
source of imports and destination for exports. Currently the largest export market is North America.
Going by the size of the North America economy, the company believes that the North American
market will continue to be significant.
However, Triad International Corporation is not cannot rely solely on existing markets and are
always looking to develop new markets. For those reasons, the company is looking at Southeast
Asia and Central and Eastern Europe and in the future intends to pour resources into exports to those
regions.
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Country: Thailand - Institutuion
Organization Name Office of Small and Medium Enterprises Promotion (OSMEP)
Organization Type State Agency
Size Annual budget: 297.71 Million Baht Staff: 120 (Permanent
Staffs)
Overseas Network -
URL www.sme.go.th
1. Basic Idea and Policy of the agency, institution or organization to promote SMEs in the globalization [including, evaluation of the globalization in overall SMEs policy, key areas to promote (export, import, alliance with foreign companies, foreign investment, etc.), and key industries]
-The vision of the office is to be the central organization in motivating SMEs as well as individual
entrepreneurs towards the strength and stability that are to make them the main driving force of
the country’s economy.
2. Measures and budget (including financing support) to promote SMEs in the globalization
Strategies
- Strategies for the restructuring of SMEs to make them a principal economic and socialdriving force
-Strategies for improvement in infrastructure, Facilitating Business
- Strategies for the Promotion of stable, sustainable growth of SMEs
-Strategies for building the potential of exporting SMEs to International standards
-Strategies for developing existing and new SMEs
-Strategies of building up the potential of community SMEs
Budget: Annual budget of 297.71 million baht (2006)
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Country: Thailand - SME
Company Name SME Trade Promotion Co., Ltd.
Type of Business TRADING FIRM
No. of Employees 27
Overseas Network -
URL www.smetrading.com,www.smeshopchannel.com,www.otopplace.com
www.otopchannel.com
1. Details of the business -Trading firm
Supply OTOP & SMEs products for the customers
2. Background, prospects and reasons for the SME to start up the business - The company was established by Office of Small and Medium Enterprises Promotion (OSMEP)
under Ministry of Industry, Thailand
- The Company aims to support OTOP products and SMEs to distribute the products via the
available distribution channel of the company
3. Problems/difficulties the SME facing before/after starting up the business (Financing, Human Resource Management, Structure Management, Lack of Information (marketing), Language, and so on) - Most of OTOP produce and SMEs are able to produce interesting product but the main problem is
that the Production Capicity, Quality, Standardization and Packaging as well as misunderstanding
for cost calculation.
4. Availability of public support (please detail public support actually obtained, if any) - The company is a subsidiary of Office of Small and Medium Enterprises Promotion (OSMEP)
under Ministry of Industry
5. Critical success factors of the business - Uniqueness in Products
- Availability of the Products
- Quality of the Products
6. Outlook of the business and your company’s vision - Being a Marketing arms for OTOP & SMEs products which newly enter to the market
- Vision of the company is to be a Valve creation Company
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Country: USA - Institution
Organization Name US Market Access Center (formerly known as International
Business Incubator)
Organization Type Public Institution
Size Annual budget: $800,000 Staff: 5 (operations team)
Overseas Network
URL http://www.usmarketaccess.com/home.html
The US Market Access Center (US MAC) was founded by the city of San Jose in 1996. The
name of the institution was recently changed from International Business Incubator to focus its
service to provide foreign companies the marketing and sales support to accelerate their time to
market, maximize their sales potential in the US, and enhance their return on investment. In the last
year alone, the US MAC helped more than 60 companies from around the globe to launch their
products in the US.
The US MAC specializes in cost-effective US market entry for small and medium-sized foreign
enterprises (SMEs) planning to expand their marketing reach to the US. The policy of the institution
is to provide market information, strategy consulting, contacts and resources for SMEs so that they
can be successful in the competitive global market place. The US MAC also encourages SMEs to
form alliances with foreign companies along with bringing foreign investment into the domestic
market.
One of the roles of the US MAC is to identify the appropriate market and audience for SMEs to
do successful business. When promoting SMEs in the global market place, it is very important to
know the markets and targeted audience which you are getting into. Oftentimes SME owners have
very little experience in foreign markets. Thus, the US MAC plays a significant role in improving
the chance of survival for SMEs.
The cost of lease and operational expenses are subsidized by the city of San Jose. As a result, the
US MAC can provide their tenants with office space and office infrastructure at lower than market
prices. They receive assistance with business structure, law, accounting, tax strategies, marketing
plans and advertising. The US MAC also provides weekly office hours with 20 knowledgeable
professionals in the fields of marketing, sales, venture capital and US business. This helps them
focus on doing business rather than spending their efforts on setting up their office in the US.
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There are two types of services that the US MAC is currently providing to promote SMEs in the
global market place. The first service is to provide SMEs with a customized, detailed report on their
market and their competitors. It includes technology and market trends, potential distribution
channels, competitive and substitute products, competitive history and strategy, and market
projections. This report will empower SMEs to determine their opportunity in the US market and
make appropriate resource allocation decisions. The second service is to provide a qualified and
detailed list of customer or partner leads, including information such as the names of key decision
makers, departments, titles, contact information, and buying preferences, parameters, and priorities.
The US MAC then sets up qualified meetings for their tenants with key decision makers to generate
potential revenue. As an additional service, the US MAC provides the following:
l Recruiting local US sales and marketing team
l Localizing marketing collateral
l Naming and branding for the US market
l Business plan review and feedback
l Presentation review and feedback
l Trade show preparation, attendance, and support
l One hour to multi day meetings and trainings with Silicon Valley institutions and
companies
The goal of the US MAC is to increase the number of companies which are planning to
expand their market in the US as well as the number of customers for their tenants. The US MAC
recognizes that SMEs are considered to be one of the driving forces in global economic development.
It continues to help SMEs grow and successfully enter the US market.
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Country: USA - SME
Company Name GeoVector
Industry Software for mobile devices
No. of employees Six full-time employees and over 40 contracted employees.
Overseas offices Auckland (New Zealand) Tokyo (Japan)
Company URL http://www.geovector.com
1. Overview of foreign exports and imports, domestic transactions with foreign companies,
cooperative relationships with foreign companies (entrusting of production, sales contracts,
etc...), or expansion into foreign markets, etc...
The company was established in 1998 and provides various solutions that rely on location-based
services. GeoVector uses its patented three-dimensional search engine technology in computer
games, advertisements and other applications in which location-based information is an important
element (1: Technology for inputting information into a terminal by pointing the terminal at a desired
object, 2: Technology that uses location and direction information to add virtual scenery to actual
scenery, 3: Technology that detects and responds to mobile terminal movement).
Currently GeoVector holds or has under application over 75 US and international patents.
GeoVector has offices in three countries, the US (headquarters) New Zealand (development of
service concepts and applications) and Japan (sales market). Major partners are wireless
technology enterprises, contents development enterprises, application developers, system developers
and contents integrators (in Japan these partners include Mapion, NEC Magnus Communications,
and D2 Communications).
2. Background and business decisions (reason, considered risk, forecast of success, etc...)
leading up to formation of your business
The business started from the concept of “giving users reassurance”. In the mobile internet
business, three important functional elements are: personalization, location-based information and
transactions. Up until now, developers of mobile applications have found it difficult to effectively
utilize location-based information, and due to poor usability, the technology has only had limited
success. GeoVector’s technology reduces user stress by moving away from the concept of searching
for information on a small mobile telephone screen, but instead allows users to gain information
instantly by pointing at items that they can actually see. With the company’s system, your mobile
phone works like a computer mouse, and the real-world becomes your desktop. You can access the
required information as and when you want to.
As the first market for the application, the company selected Japan, where the mobile phone
market is extremely well-developed.
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3. Problems you experienced around the time you started business and how you solved those
problems (personnel deficiency, establishment of internal systems, deficiencies in information
gathering, capital procurement, language barriers, etc...)
GeoVector’s business model is unique. The company is headquartered in the United States but
does 100% of its business in the Japanese markets. Therefore, the company originally had some
difficulty attracting venture capital. To resolve this problem, the company established a Japanese
subsidiary to create an actual target for investment that would ease investors’ worries, spent much
time in developing its intellectual assets and has been patient and determined in persuading investors
to cooperate.
4. The existence or nonexistence of public support during these times (please explained in
detail if you did receive support)
JETRO assisted GeoVector in establishing its Japanese subsidiary (consultation for business
registration, introduction of business registration, accounting and interpreting services, provision of
information on possible office sites, research on competing companies, temporarily loan of office
space, assistance in establishing a bank account).
5. Reason for success of your aforementioned business
Persistent persuasion of venture capitalists allowed the company to access funds from investors
who understood the project. Establishing a corporation in Japan was also important. But the most
important factor was gaining personnel who fully understood Japanese culture and business and had
a wealth of connections as the manager for business development in Japan and obtaining support
from JETRO in handling our business development.
6. Future expansion of your business and your company's vision
The majority of mobile phones on the market access the Internet through browsers or applets.
Many mobile phone manufacturers are developing various technologies that will enable the handsets
to use location-based information. GeoVector’s technology is a new supplementary technology that
will enable the effective leverage of existing functions.
Currently, CDMA terminals are on sale which can make use of direction and location-based
information. The company expects that the number of these phones will increase, and during 2006
W-CDMA phones will also become able to access location-based information. Sales trends for
mobile phones that can use GeoVector’s technology closely resembles the sales trends observed
when camera-equipped mobile phones were introduced onto the market. It is therefore likely that
GeoVector’s technology will bring a new revolution to the global mobile business in the future.
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The company is also considering future entry into the Korean market.
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Country: Vietnam - Institution
Organization Agency for SME development-ASMED
Organization format Government organization (attached to the Ministry of Planning and
Investment)
Scale
Overseas offices None
URL None
* Summary
-November 2001: The Vietnamese government issues governmental ordinance No. 90 which covers
SME support. It is the first ordinance related to SMEs.
-End of 2002: Based on governmental ordinance No. 90, a Corporate Bureau is established under the
Ministry of Planning and Investment.
July 2003: ASMED established. ASMED is a very young agency in the field of promotional
activities for SMEs.
* Principal roles
- Monitoring the reform of government held corporations
- Providing guidance for regional administrations regarding the administration of business
registration.
- Collecting information and building a database on business registration throughout Vietnam.
- Establishing policies for the promotion of SME development.
1. Basic thinking/stance on government/SME promotion organizations to respond to the
globalization of SME (including positioning of globalization in SME policies and fields being
supported as particularly important (export, import, corporate tie-ups, overseas investments,
etc.)).
ASMED performs the following three main roles in promoting SME development:
(1) Creating beneficial business environments for SMEs. However, ASMED is not the only
organization responsible for SME development. Numerous other domestic and international
organizations are conducting similar activities.
(2) Establishing financial policies for SMEs. ASMED’s activities always remain within the scope of
participation in financial programs for SMEs implemented by the Ministry of Planning and
Investment in conjunction with other ministries including the Ministry of Finance.
(3) Improving SME’s capabilities. These activities are carried out through various educational
programs and through governmental programs for SME development. The budget for these
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development programs is $5 million. This amount is not all sufficient for supporting personnel
development at SME's. There are numerous other sources of financing for SMEs including the
budgets of regional government plans and corporate unions funds.
ASMED’s various programs provide dedicated support for the overall development of domestic
corporations, but at the same time places particular emphasis on strengthening competitiveness in
order to allow Vietnamese SMEs to complete in the international market. (Lack of international
competitiveness is considered a significant weakness of Vietnamese SMEs). Limited only to
commercial promotions, the Vietnamese government proposed a commercial promotion program
targeting only SMEs in 2004. However, the program was not implemented because the Vietnamese
Trade Promotion Agency (VIETRADE) announced an overall plan for the promotion of commerce
which made no distinctions of company size or nature.
2. Specific policies, measures (including the financial side) and respective budgets supporting
responses to the globalization of SMEs.
ASMED is an associate member of Vietnam's SME Association The association was founded in
January 2003 by the Planning and Investment Minister. Other members include the ministers of the
various ministries and agencies and the representatives of various organizations.
Currently, ASMED is involved in building strategies for the development of SMEs from 2005 to
2010. The completed plans are scheduled to be presented to the Minister and Prime Minister at the
end of 2005. Principal contents of the strategies are concerning governmental reform measures to
address problems related to SMEs. As such, the strategies are considers to be an action program
(action plan) to promote SME development. The strategies also define the principal roles of
ASMED mentioned above.
Since 2004, the government has invested 199.0 billion Dong to provide SME support. These
funds represent the only funding provided from the central government budget. Additional funds
for SME support are provided from the independent financial resources of each regional government.
Further, financial support and other preferential loans are provided by JBIC (two step loans) and the
French organizations AFD, ADB and KFW.
The central government has allowed regional governments to establish credit guarantee funds to
provide support for SMEs. However, as yet, no regional governments have established such funds.
Ironically, this is because governmental and Finance Ministry regulations have been an obstacle and
the capabilities of the regional governments are limited.
3. Future Outlook and Expectations
ASMED was formed three years ago but has not yet produced a general report on the activities of
SMEs. However according to the Director of ASMED’s International Relations bureau, there are
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only 100,000 SMEs in Vietnam, a small number compared to a population of 80 million. There are
around 2 million family managed entities engaged in a very limited sphere of business, but these
entities do not participate in production activities, and are involved only in management in its strict
sense.
Therefore, the goals of SME development are to encourage young people to start up businesses
and also to encourage investment in the production sector. (The former goal refers to starting up
completely new business entities, and does not include the continuation of family businesses.)
If Vietnamese SMEs are to participate in the international economy, they are likely to face
difficulties caused by increasingly severe competition. However, from a long-term perspective, the
future of SMEs is bright. There are high hopes for the corporate law scheduled for parliamentary
approval at the end of 2005. The law was drawn up after an extensive research period. The
Vietnamese’s positive attitude towards the development of a market economy and participation in
the international economy will also provide support for SME development.
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Country: Vietnam - SME
Company Name Ha Tran joint Stock company (A-Design)
Type of Business furniture / handicraft
No. of Employees 20
Overseas Network
URL
1. Details of the business
Producing and trading Home decoration and handycrafts
2. Background, prospects and reasons for the SME to start up the business
We consider this matter
-Vietnam condition
-Ability of management
-Finance condition
3. Problems/difficulties the SME facing before/after starting up the business (financing, human
resource management, structure management, lack of information<marketing>, language, and
so on)
-financing and lack of information about market
-quality control of products
4. Availability of public support (please detail public support actually obtained, if any)
Vietrade support
5. Critical success factors of the business
Now we have fews market such as: Japan, America, French but not stable
6. Outlook of the business and your company’s vision
We try to find the partner to develop. We belierve in good future.