Export Knowhow

Expert advice for SMEs: practical tips for international business

Strategy, finance, risk management and more: What are the success factors that enable SMEs to thrive internationally? Experts from S-GE's strategic partners will discuss this with CEO Simone Wyss Fedele at the CEO Roundtable.

V.l.n.r.: Andreas Gerber (SWISS), Peter Gisler, Andreas Gerber (CS), Simone Wyss Fedele, Stefan Räbsamen, Manuel Meier, Dieter Gosteli

An exchange of experience between experts who all have the same goal: supporting Swiss SMEs in their international business. Switzerland is an nation of inventors, and its SMEs are characterized by their strong innovations and pioneering spirit. To adapt to the changing environment, companies that also want to drive their growth internationally must prepare for global risks and opportunities in an agile manner. To do this, they need a sophisticated and sustainable internationalization strategy.

Global economic situation in 2020: separating the wheat from the chaff

Our experts agree that the outlook for 2020 is essentially positive. Nevertheless, this is only a snapshot of the current mood: there are political risks to consider that are difficult to assess, and can have a major impact on countries with relevant roles in global value chains. Andreas Gerber, Head of SME Business at Credit Suisse, maintains that this is a good thing: “2020 will separate the wheat from the chaff; companies that are well and broadly positioned will find it easier to supply their customers in the future.”

These are the top three challenges worldwide

Stefan Räbsamen, VRP of PwC Switzerland, makes reference to PwC's global CEO survey and identifies three main challenges: “Trade disputes are causing an increasing amount of over-regulation to be applied, and Swiss SMEs are often unable to cope. It is worthwhile to seek early consultation in this regard. Connected with this is the industrial policy of certain countries, and then of course the issues emanating from the cyberworld, i.e. IT security and data protection.”

Is protectionism merely a bugbear?

According to Peter Gisler, CEO of SERV, political risks are set to remain relatively high in the coming years and the level of protectionism measures will continue to rise. He adds that we should not only speak of protectionism, but also industrial policy: “When we see what other countries are doing, it's not just protectionism – it's measures to promote their own exports. This is where we in Switzerland, with our very liberal attitude, are falling behind". However, as Dieter Gosteli, Head of Corporates at AXA, points out, protectionism involves a much higher psychological risk than an economic one: “Our world has become more and more interconnected: every measure has the danger of rebounding on the national economy. This provides a good counteracting force against protectionism.”

Take advantage of regulations and think globally

Even though liberal conditions prevail in Switzerland, climate change, for example, is giving rise to new regulations. Andreas Gerber, Head of New Business SME Switzerland at SWISS, points out that the planned air ticket levy, for example, will also have an impact on SMEs: “The climate levy is not very effective at national level and harms the national economy, among other things because it shifts traffic flows abroad and creates competitive disadvantages. SWISS is, however, open to globally orchestrated approaches and is substantially involved in their development. In our view, synthetic fuel is the only option for making flying climate-neutral in the future. If there were to be a levy on air tickets, the money would therefore have to be spent sensibly by promoting synthetic fuels.” The tax has no direct influence on air fares, which are determined by demand and competition.

The secret of success for internationally active SMEs

What are the factors that ultimately determine success or failure? Our experts reveal their personal tips:

Peter Gisler Get yourself a CFO

“Many SMEs that go into export do not properly clarify the risks; the groundwork is often missing. In addition, exporting also requires financial assets, because if there are delays, for example, liquidity is quickly lost. Swiss SMEs are technically very good, but are unfortunately always lacking on the commercial side. For example, they often lack a CFO. Provide for one; it’s worth it.”

Manuel Meier, Country Manager AXA XL Insurance Switzerland:
Minimize risks by working with professionals in the target country

“Apart from exotic-seeming but definitely real risks such as kidnappings in Latin America, there are also much more profane aspects that should be clarified with local professionals: For example, depending on the country, tax authorities can take aggressive action if certain contracts are not correctly reproduced, and very high fines are then incurred. Moreover, in the light of current events, we must not forget to consider the risks and effects of pandemics, from both a human and an economic perspective.”

Andreas Gerber (CS): Professionalization of the strategic level

“SMEs in Switzerland stand out with their high innovative strength and flexibility. But what they sometimes lack are the right people to support the entrepreneurs actively and professionally at a strategic level on the advisory board. By this, I mean the experienced people who have worked in the relevant industry their whole lives and who want to continue to make a difference. Such dialog partners are very valuable for CEOs, because export projects are complex and the risks are multi-layered.”

Stefan Räbsamen Expansion strategies are a matter for the boss

“There are examples of larger SMEs where the chair of the advisory board moves to the target market to ensure that the strategy works. This also underlines how important this is as an endeavor.

Moreover, expansion is a business case and must be treated as such. If it is properly worked out, one should stick to the plan. Even if things get bumpy. Once you have carefully assessed and evaluated the three M's – market, money, management – it makes sense to follow the strategy.”

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