Companies face challenges, opportunities in global market

There’s doing business, and then there’s doing global business.

While penetrating the world market may lead to increased revenue, the proposition also comes with its own set of obstacles.

It all starts with a strategy, and in Positronic Industries Inc.’s case, some dissatisfaction with merely exporting from the United States.

“We have to look overseas to sell our product, because our competitors – whether they are U.S. or foreign-based – you can be sure they are manufacturing products they want to export to the U.S. and compete with us,” President John Gentry said, noting the company made its first move abroad to Switzerland in 1983.

But with the move came hurdles. Some were expected, such as varying languages and a seven-hour difference in time zones. Also, Gentry said European countries wanted the company’s product – connectors – made to metric dimensions.

“If you’re sitting here thinking the U.S. is the center of the world and everything we do is wonderful, correct and should be accepted internationally, you’re going to fail because that’s a flawed thought process,” he said.

While Positronic built plants in the regions in which it does business, AGC Global Refining & Filtration LLC took a different approach: Manufacture locally and partner with subsidiaries to sell internationally. CEO Jerry Nichols still paves the path, meeting with embassy ambassadors and foreign ministers to ease market entry for the company, which builds modular oil refineries and re-refineries for petroleum waste products.

“In the early days, we tried going to the company first. They had to deal with the regulators and it was too difficult,” said Nichols, whose company is affiliated with Allen Filters Inc. “We started a top-down approach and it’s been much more successful. It legitimizes the efforts to get the government on board.”

Playing geopolitics
While making a good impression with local leaders is an important step for doing international business, Nichols knows firsthand the unpredictability of global affairs can cause some deals to fizzle and fade. He had to walk away from the table in Turkey facilitating a potential $10 million deal that was two years in the making due to political unrest in the country this summer.

“At the last minute I called it off, because it had become more dangerous every trip,” Nichols said. “I had to have bodyguards. Then three days later, there was an airport bombing and a military coup. We lost the sale, but, frankly, we won the war on that one.”

Geopolitics aside, language, time changes and the nature of the conversation can make communication difficult for skilled nonnative English speakers. Positronic International Marketing Director Jay Sandidge said the company keeps in touch with overseas operations via Skype and conference calls, but the human factor can add complications.

“When you brainstorm about creative solutions to problems you’re engaging all types of language nuances you don’t realize,” said Sandidge, giving an example of the company’s plant manager in France. “Put him seven hours ahead, he’s been working all day and now he has to dial in for a conference call, so to operate in another language takes double or triple the mental energy. On top of that, you’re fighting to get your ideas into a scenario with all these native English speakers.”

Like Positronic, Paul Mueller Co., which posted revenue of nearly $178.6 million last year, utilizes Skype to keep stateside and international operations in touch.

Marketing Manager Jay Holden said the inability for frequent in-person meetings with co-workers led the company to start The Switch. Last month, eight employees from company offices in The Netherlands visited Springfield to shadow their U.S. counterparts, and next year the American workers will reciprocate. “It offers us a broader understanding of what our colleagues do on a daily basis and how various aspects of the same job can differ country to country,” Holden said via email. “In addition to those challenges, fluctuating exchange rates can sometimes make managing inventory and selling processes more challenging.”

Sales circuit
If there’s one method all companies agree on, it’s playing to the strengths of the teams on the ground in the given country. They rely on local sales and operations teams.

As with Europe, Positronic followed the customers to build a global network that includes facilities in Puerto Rico, Singapore, India and a move to France from Switzerland. Declining to disclose company revenues, Vice President of Sales John Grimm said Positronic serves around 3,000 customers in multiple segments, including the military, aerospace and computer industries. The Americas represent around 50 percent of business, Asia 30 percent and Europe 20 percent. After an international meeting held in Springfield during September that coincided with the company’s 50th anniversary, Grimm said the sales team set aggressive goals in fiscal 2017.

“Six percent is a rough estimate of what industry experts expect our market to grow, and we’re looking to almost double that,” Grimm said.

At Paul Mueller, dairy cooling and storage systems is the company’s largest market segment due to the work of its Dutch subsidiary at a dairy co-operative in Vietnam. But the company’s next opportunity may come in North America, where Mueller plans to introduce serving beer tanks – a bulk storage and keg-less distribution system.

“These tanks are a popular product for us in Europe where labor laws prohibit workers from lifting the amount of weight in a full keg,” Holden said. “We believe there is market potential here in the U.S. and Canada for breweries and venues to adopt serving beer tanks and save money on their labor and storage costs.”

Positronic’s global divisions once operated independently from each other, but Chief Operating Officer Ed Hopkins said the company recently has taken steps to streamline operations and interact more efficiently. One example is the international meeting, and another is the company’s enterprise resource planning software, allowing Positronic to track its business activities.

“The language of our business is now English. When you talk engineering or systems, math is math,” Hopkins said, noting the weekly check-ins are two-way streets for improving internal interactions and, hopefully, the company’s relationships with global customers. “We’re not only trying to say we’re an American company, we want you to bring back your knowledge to us on how we can do a better job.”