Glasgow Business . 31
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FIND YOUR TARGET
Scott McCroskie, Commercial Director of international spirits business, the Edrington Group, shares his tips for global success
Tell me a little about Edrington’s international business Over the space of a few decades, we’ve gone from a UK company to being primarily an exporting company. It’s been a huge swing in the shape of our business, and there’s now not many places we don’t sell our brands. The USA is a big market, particularly for Scotch. There’s also the Dominican Republic, where we own Brugal rum. On the other side of the map, we’re active across Asia. There’s a regional office of
”There is a growing sense that there are some great opportunities for smart UK businesses to find abroad the bottom-line growth that eludes them at home”
(OMIS) (
www.ukti.gov.uk/ export/howwehelp/overseas
marketintroductionservice.html) can help with market advice, analysis of your strategies and even identification of possible local partners.
Agreeing terms
Mutually agreed terms are central to any cross-border transaction, as they set out the practical details of payment and delivery. Fortunately, a set of standardised terms – published by the International Chamber of Commerce known as ‘Incoterms’ – have been widely accepted across the world for almost 80 years. Among other things, inclusion
of Incoterms in a sales contract provides clarity on: • Which party is responsible for organising and paying for delivery
• Te destination at which delivery is deemed to have taken place
• Te point at which any risks involved in delivery pass from the seller to the buyer.
Are your papers in order?
For obvious reasons, national customs authorities like to keep a prety close eye on anything crossing their borders, so geting the paperwork wrong can result in delayed deliveries and significant additional costs for your business. Some jurisdictions have tighter
controls than others – particularly where customs serve a broader national strategy, such as ensuring local suppliers enjoy a tax advantage for certain goods – so it once again pays to seek expert advice. As well as ensuring any tax
and duty payable on incoming goods has been collected, customs authorities will be on the lookout for any restricted or controlled items. Generally though, unless
your widget is also handy in weapons manufacturing, it’s normally just a case of ensuring you’ve paid the right duties.
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about a dozen people in Hong Kong, serving China, Taiwan and that whole region. There’s some very big businesses in that area. In EMEA, we have Spain, which
is our largest market worldwide and Russia, which is one of our fastest growing.
And have you pursued the same route into each of those markets? Not at all. We have self-owned businesses in a lot of our key markets, but where we don’t, we’ve partnered with other distributors like Jim Beam and Suntory in Japan.
Doesn’t that leave you rather dissipated? To succeed in the long term, you’ve got to stop thinking of yourself as a Scottish business trading with the rest of the world, and start acting like a global entity with various in-country businesses. For me to try to manage by remote control someone on the other side of the world, with a completely different cultural backdrop, would be well nigh impossible. Our Asian operations are
a good example of that. We have the office in Hong Kong, but the MDs in individual countries who report to that office are all locals and their teams are local. It all comes back to me, but those national and regional businesses are empowered.
What questions do you ask when
considering a new market? First, does it fit with our strategy? At the moment for example, the spirits industry is very interested in Africa. So, we’re looking at those markets and asking which ones fit with our overall growth strategy. Then we’ll go into more detail about the scale of the opportunity and whether it’s worth the initial heartache. Perhaps most importantly
though, we’ll ask what gives us the right to succeed in that market – what can we bring that means we’ll be a success? And that might be having a unique product, better distribution, the ability to invest more… We really challenge ourselves to find an edge.
Are the high-growth developing markets really more of a challenge than Europe? We know the developing markets quite well, and I wouldn’t necessarily say they’re any more challenging, but there are certainly some important cultural differences. And I’m not talking about how they shake hands in Japan – I think we in the West can be unnecessarily precious about that sort of thing. It’s more about having feet
on the ground in the market – preferably local feet – to make the connections and feel the mood. The key is not to assume you can take the way you operate in Berlin and just replicate that in Taipei.
Any other nuggets of advice for ambitious businesses? Choose your targets carefully and don’t try to do too much at one time. Get in, learn the lessons and use that as the foundation for your next step. Do your homework, and if you can’t get your own people on the ground, use the resources that are on offer to help growing businesses go international. There’s a wealth of information and advice out there; we still use it, and it’s an advantage you can’t afford to turn down.
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