This is an example of a completed business plan for an import/export business of mainly German brand luxury cars that are to be exported to China.
The founder provides her experience and already established connections with the Chinese market. For apprx. 7 years she has been the Assistant Managing Director of a medium-sized Chinese manufacturer of braking equipment, which in turn already has business relationships with Chinese buyers of German premium brand cars as well as with German and European companies. The Chinese market for such cars is still in the booming phase, and connections are well established, so a quick market entry is not a problem.
The business plan elaborates on crucial points like the products, markets situation and USP: German premium brand vehicles that are sought-after prestige objects in the target market China, a market with increasing demand. The USP that sets the sample company apart from the competition is the combination of established contacts and language skills, which help to overcome the language barriers that can otherwise be an obstacle when dealing with the Chinese market. The business plan also gives information regarding business partners (involves cooperation with the Chinese company the manager used to be employed at), the marketing plan, the venue organization and financing.
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International Trade Business Plan Sample – Luxury Car Import/Export Overview
1. International Trade Business Plan Sample – Executive Summary
INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. would like to run an international trading business with luxury vehicles. German premium brand vehicles will be exported to China.
The manager, Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE, has been Assistant Managing Director of a medium-sized Chinese manufacturer of braking equipment called INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Machinery Pte. Ltd. since 2009. The company has special relationships with numerous Chinese buyers of premium cars and has often done business with German and European companies. In particular, it is interested in sports cars and sedans. As the managing director can bring a lot of experience and technical knowledge, a great deal of know-how will be available to the new company, so that the ambitious business plan can be well realized.
INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Machinery Pte. Ltd. has many business contacts in Europe, mainly with braking equipment buyers in Germany and Denmark. Other potential partners have already been identified by the Assistant Managing Director. Because the Chinese car market is still in a boom phase, there is no hurdle to quick market entry. Powerful synergy will help the German Ltd. benefit from the Chinese partner company INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Machinery Pte. Ltd. at various levels. The cooperation will improve marketing, customer service and purchasing as well as sales positioning of the two companies, so that the great synergy potential can transform into business success. In this sense, the market entry of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE GmbH will most likely be marked by success.
1.1 Trade Focus The company wants to export to China mainly brands such as Land Rover, Porsche Cayenne, Mercedes-Benz and BMW. These premium vehicles are durable, comfortable (plenty of space) and recoverable and therefore very popular in China, both for practical and subjective reasons (prestige). There are now so many such vehicles on the streets of China that many car shops are starting to focus on the further penetration of foreign brands.
The registered business activity of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd covers numerous other possible business activities in the field of development and manufacture of automotive technology and consumer goods trade, especially of wine and textile. The addition of these business activities is based on considerations to use further trade opportunities for the successful execution of the primary business activities. Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE and her husband have two other companies in China: the INTERNATIONAL TRADE BUSINESS PLAN SAMPLE I Automotive Components Co., Ltd. which designs and manufactures automotive parts, and INTERNATIONAL TRADE BUSINESS PLAN SAMPLE II – International Trade Co., Ltd. – which trades with wine and other consumer products. As you can see, the relatively diverse business activities of INTERNATIONAL TRADE BUSINESS PLAN INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. are backed solidly by concrete considerations and intentions.
1.2 USPs INTERNATIONAL TRADE BUSINESS PLAN INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. enjoys a wealth of unique features compared to existing competitors as well as startups. These unique features in their entirety are a particular strength of the startup. They will contribute to the ability to realize opportunities and to enable long-term and steady growth even in uncertain economic conditions.
The main selling point lies in the partnership with the INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Machinery Pte. Ltd. The manager of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd, who is also Assistant Managing Director of the Chinese partner company (The Chief Executive of the INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Machinery Pte. Ltd. is her husband Mr. Guicai INTERNATIONAL TRADE BUSINESS PLAN SAMPLE), will align operations so that a very harmonious and efficient business relationship will arise. Buying products in Germany via a German Ltd eliminates numerous communication barriers and facilitates the logistical implementation of complex procurement contracts. In addition, the company achieves stronger representation, and the Chinese company’s reputation will also benefit.
The manager herself and her work for the INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd are also important USPs. Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE has management experience of an industry company, has founded a communications agency and has exhibited entrepreneurial talent as a trained graphic designer. She can carry out quality control, customer service in Chinese language and similar tasks, where her skills would be pivotal. The majority of competitors cannot boast such a combination of management skills and knowledge of business operations.
1.3 Business Strategy As already mentioned, INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. and its Chinese partner SAMPLE Machinery Pte. Ltd follow a strategy focusing on the high-quality German vehicle segment. The German company will first ensure that logistic processes and purchasing are alleviated and controllable. From this advantageous position, the company will start building a market reputation among Chinese clients and obtain technical know-how from the experienced German staff on location.
Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE has good connections with key figures, given that major (bulk) buyers form the basis of trade with luxury vehicles on an international level and especially trade between Europe and China. Through additional Internet and print advertisements and visits to trade fairs, recognition of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. can escalate quickly in Germany and China. In addition, their own news flow is actively communicating with the consideration of issues such as sustainability and corporate social responsibility, facilitating the future status of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. Using the existing contacts of SAMPLE Machinery Pte. Ltd. in the establishment of the German startup and intensifying relations with clients are important milestones in the early stages of company development.
If the short-term business goals are reached, INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. will continue to expand. In the long term (about 5-7 years) 300,000 Euro will be invested in European headquarters with their own department for technical cooperation. Until then, trade can generate good profit, while analysis of the market and the product range can help attain know-how and reliable business contacts, who will be pivotal in the next stages. Thus, the company is pursuing a strategy of organic and sustainable growth, which also incorporates the strategy to build a positive and credible marketing presence.
2. International Trade Business Plan Sample – Market Analysis
2.1 Chinese Vehicles and the Vehicle Market According to a study by the consulting firm McKinsey, sales of new vehicles worth 25.000-150.000 Euro (new) will increase from 1.25 million in 2012 to around three million in 2020. The United States, where about 1.7 million premium models were sold in 2012, will drop to second place according to the study.
By 2020 the premium segment will amount to 12% a year. Especially German premium manufacturers such as Audi, Porsche, BMW and Mercedes can benefit from China’s growing appetite for luxury. According to McKinsey, the share of German producers in China’s premium market is now 80%. VW subsidiary Audi sold around 400,000 vehicles in China in 2012. Sports car manufacturer Porsche was able to sell 30,000 vehicles in China and achieve a new sales record last year.
To continue to benefit from the premium boom, the German manufacturers’ distribution network in Chinese cities should expand according to Detlev Mohr, head of McKinsey’s European automotive consultancy. In addition, manufacturers must pay attention to prices and modern drive technologies. In the US and Germany, the premium segment will grow to respectively 4% and 2% by 2020, McKinsey estimate. The emphasis that the price and technological sustainability play a role is in line with the recent development on the luxury goods market – namely that even the richest Chinese are now a little more careful when they spend money, the top echelon is “growing up”, so they say.
The dependence of the German carmaker on the mood of consumers in China has grown rapidly in recent years. Some experts see a problem looming – if the year-long rapid growth of the Chinese economy is disrupted or political conflicts such as the Crimean crisis come to affect business. Success in China is decisive for the growth objectives of the premium-segment manufacturers. Daimler has committed to become number one worldwide again by 2020 – currently behind BMW and Audi in third place. The VW subsidiary has the same goal, and both are hard at work building their sales networks in China.
These trends are positive on the one hand, as the presence of many foreign cars is buying stimuli and also increases the number of service workshops. On the other hand, of course, this hampers the import business a little when the carmakers have their own major sales activities. There is a lot of diversification potential, especially with regard to imported models. Wealthy Chinese are placing more emphasis on space in the car. Hence Audi and Mercedes are successful with luxury vehicles in long-wheelbase, like the Audi A6 and the E-Class. SUVs are in demand too.
The future of the manufacturers is definitely in China based on the findings of a study by the Center of Automotive Management (CAM) on sales and market positioning of the 17 largest automotive companies worldwide. China and the United States will soon account for more than half of global car sales, what with an increase of 12 million cars since 2010. During the same period car sales in Western Europe dropped by around 0.9 million despite the recovery in 2013 (+ 4.8%), according to the study. The 17 largest automotive companies have been able to increase their global sales by 3.8% to a record level of 74.9 million vehicles in 2014. The biggest winners include the German companies Daimler (+ 9.9%), BMW (+ 7.9%) and Volkswagen (+ 4.5%). Even smaller Japanese manufacturers like Subaru (+ 15.6%) and Mazda (+ 6.6%) have been able to attain strong growth in new car sales according to the study. Below average are car manufacturers like Ford (-0.1%), Suzuki (+ 1.0%), GM (+ 2.2%) and Toyota (+ 2.5%). This shows very clearly how popular German vehicles are.
To better illustrate the opportunities of the startup, it is worth taking a look at the luxury goods market in China in general. In 2012 the Chinese luxury market was the largest in Asia, emerging ahead of Japan, and was also the second-largest in the world. Wealthy Chinese from China, including Macao, Hong Kong and Taiwan then spent an estimated 27 billion Euro on luxury goods, about 12% of the total volume of a 212 billion Euro market.
However, China registered a decline in luxury goods spending in 2014 – the biggest in over five years. For the producers of luxury goods that are increasingly relying on their growth on the Chinese market, this development was unforeseen.
The decline coincides with an anti-corruption campaign of the government, which penalized expensive gifts between entrepreneurs and officials on the one hand and made bribes more difficult on the other, thus impeding consumption of luxury goods. China’s wealthy now tend to shop abroad and bring home luxury products. This trend goes not only for premium vehicles, but also for watches, jewelry and other easily transportable goods.
In addition, one third of the wealthy Chinese have left the People’s Republic of China for good or regularly spend a lot of time abroad. According to the Hurun Report (a market study on luxury products) many others are planning to do the same, because they hope for better educational opportunities for their children abroad and wish to escape the air pollution in the big cities, which has reached critical levels.
The Chinese are still the top global consumer of luxury goods, but their buying behavior is changing and there are economic problems. The startup must keep these tendencies in mind.
Overall, the data available shows that the market entry of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. is well-facilitated by the existing partners in China, the market positioning of popular premium brands and the general trends. Despite crises and turmoil, the selected segments remain very robust and further growth in the context of a broader economic recovery is expected.
2.2 Competition Being specialized in the premium vehicle segment, INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. will encounter few competitors, who could exert an actual influence on the startup’s business model due to its partnerships in China. These do exist, however, as mentioned in the market analysis, and they are part of the lively business landscape in China, dividing up the market. In addition to the foreign joint ventures and importers, Chinese manufacturers with their own production facilities for premium vehicles will be competing with their own limousine and sports car models in the next few years, also internationally. The INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. will be able to position itself strategically and operate well in the long-term by focusing on popular brands.
This focus will help SAMPLE Ltd achieve a promising marketing position, which will withstand the Chinese competition, facilitated by the founder and her husband’s existing companies. The important partner, SAMPLE Machinery Pte. Ltd,. is in a strong position as an established vehicle equipment manufacturer with well-established customer relationships and numerous successfully completed orders, so these additional resources can drive the sales of the vehicle importer.
One more advantages for Chinese buyers is the possibility of customization (color, extras, electronics etc.). SAMPLE Ltd’s impeccable client support and very good services can give it an edge over the competition. It is most important for Chinese customers to buy the most popular models. Transport, insurance, information and storage costs are minimized thanks to the experienced manager’s input. Clients will be willing to pay for an impeccable logistic organization. SAMPLE Ltd’s logistics partner is the experienced and reputable Shanghai Xieli Logistics Co., Ltd. The cooperation ensures there will be no risk to customer satisfaction.
Finally, it can be said that SAMPLE Ltd’s market status is quite satisfactory in light of the market trends and the advantages the company itself is bringing. The company’s special status as a professional market player with business relations and a diversified business model opens up a very promising future, which the company’s strategic orientation can only complement.
2.3 Target Group The target group INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. will be marketing its products to wealthy Chinese individuals or car dealerships.
Plans are to market over the tested channels of the Chinese companies controlled by Mrs. SAMPLE and her husband. The promotional activities will be limited so as to proceed with the available resources cautiously. For example, the use of highly specified Internet advertising, telephone cold calls, visits to industry-specific trade shows and advertising in professional journals are regarded as effective methods to make SAMPLE Ltd’s offers widely known. The manager is a Chinese native speaker and will be able to directly and personally address decision makers in Chinese companies with the right profile, or create business contacts over her own contact network.
2.4 Risks INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. will be exposed mainly to operational risks in trading with high-quality, sensitive vehicles. Transport risks, storage risks or credit risks are minimized by appropriate insurance. Another risk is the sudden loss of one or more partner companies. This would endanger the growth targets of the startup, especially in the beginning. Since the partners are time-tested and well-run enterprises, however, and soon other business contacts will be created, the company will be able to diversify this risk relatively quickly. Companies like INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. that operate internationally may also be exposed to currency risks.
In addition, political factors are important for the risk assessment. The volume of traffic in China is already very high; the environmental pollution has reached critical levels in some cities. The Chinese government has already announced measures, particular by promoting alternative drive technology to curb further escalation of environmental pollution. It can be expected under certain circumstances that the government’s intervention will lead to irregularities in the market. Through these interventions the propensity to buy a vehicle also naturally decreases. The expansion of infrastructure with trains and buses also puts a lot of pressure on the car market, although the premium segment is less affected. The long-term future of the automotive industry is anticipated to be difficult considering the political risks for the sector. However, the degree of motorization of the Chinese population is still relatively low, so that the so far unrealized potential is nevertheless large. Protectionist measures aimed at promoting private automobile production will also affect the prices of foreign products, which will also have some negative implications for the market players.
The INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. is also exposed to currency risk. In the long term, however, it can be expected that the Chinese currency value will continue to rise, while the Euro will continue to fall. This is an advantage to the export activities of the founding company.
3. International Trade Business Plan Sample – SWOT-Analysis
The strengths, weaknesses, opportunities and threats are shown in the table below.
· Close cooperation with Chinese partners
· Manager has more than 11 years experience in the car branch
· Business model is time-limited
· The manager has poor command of German
· The business model is not diversified
· There is a big vehicle market boom in China
· The luxury car market is also booming, there are more and more potential premium vehicle buyers
4. International Trade Business Plan Sample – Location
The startup in SAMPLE CITY in the industrial Ruhr region, near other large cities with a robust corporate landscape such as Cologne, Essen, Dortmund and Duisburg, will have access to all the important hubs in the region. SAMPLE CITY also has other location-specific strengths. Popular fairs in the area could attract a lot of interesting start-up companies (even from China), so the networking potential is very high.
Well-developed, modern infrastructure and an airport nearby ensure that trade fairs and events will be easily accessible. Qualified personnel, a foreigner-friendly business climate and fair rents for well-equipped office spaces are further arguments in favor of the location decision.
5. International Trade Business Plan Sample – Partner/s
5.1 Clients and Suppliers
The companies listed below are SAMPLE Ltd’s important partners. In line with the flexible business model, they are both clients and suppliers. The partners are well-established and successful market players with a long-year history without exception. They are described in more detail in the following two paragraphs.
Known suppliers of premium vehicles and parts
Known distribution partners of premium vehicles and parts
Other known partners
5.2 SAMPLE Machinery Pte. Ltd. The Chinese companies and especially the SAMPLE Machinery Pte. Ltd (http://qunfin.1688.com) represent important success factors in the business model, and orders may also be procured through these companies depending on demand. SAMPLE Machinery Pte. Ltd. plays a very important role for INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. and will be the main partner of the three companies in China, which are controlled by Mrs. SAMPLE and / or her husband.
SAMPLE Machinery Pte. Ltd. was founded in 2004 and now employs 60 staff members with a turnover of about 3.5 million Euro (26 million RMB). The managing director of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. is Assistant Managing Director of SAMPLE Machinery Pte. The company was founded by her husband Guicai SAMPLE. This very harmonious relationship, marketing and other forms of cooperation will ensure the German Ltd. stands strong.
6. International Trade Business Plan Sample – Marketing Strategy
6.1 Price Policy The flexibility in the high-priced vehicle segment margin can serve to maintain long-term customer relationships through rebates or discounts and sustain the gained market share or even expand it. Through greater economies of scale not only the logistic and administrative cost structure improves – they also serve to strengthen the purchasing position of the company over that of its suppliers, which could then make discounts possible. Consistent and continuous monitoring of the purchasing position in three-month intervals and the constant willingness to renegotiate are also components of the proposed pricing strategy.
Dynamic price management in sales increases the turnover rate, which is also an effective way to protect the company from currency risks, liquidity shortages, storage risks or technological overhaul. The SAMPLE Ltd’s pricing policies must meet its specific purchasing needs to the utmost extent.
6.2 Communication Policy The business of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. is very special, so the marketing approach must be crafted very carefully based on the specific target groups. Suppliers must be treated professionally as well (because highly prospective customers often get better terms than customers, who are perceived as unstable or untrustworthy), so marketing tools are applied both on the Chinese main market and on the German main supply market.
A professionally designed, trilingual website is indispensable as an information base, but the majority of the marketing activities will take the form of direct marketing, i.e. by mailing information and subsequent calls. Careful research and well-planned initial phone contact are very useful to enhance the network, especially in the second year. This network can be used in later stages if expansions or changes are made in the corporate structure extending the offer or buying range of the company.
The presence at trade fairs is also of some importance. Fairs that have been identified as promising, such as the IAA (Frankfurt / Hannover) or the Shanghai Auto Show, are frequented by potential suppliers and customers, and the networking potential is even greater. Attractive promotional brochures and business cards are printed and issued so the company will be remembered by potential clients. Promotional gifts such as pens with the company logo serve the same purpose.
Advertising in specialized magazines in China and Germany is also among the activities aimed at acquiring new customers. Although there are already several contacts, marketing activities in China need to ensure sustainable expansion that is diversified among different buyers. Investments will be made in this area after a period of time, in which the main focus will be on those already acquired customers. An effort will be made to cooperate with partners in terms of marketing, such as joint participation in trade fairs or in larger advertising campaigns.
SAMPLE Ltd’s website is envisaged as a platform to provide information or contact details to interested corporate clients. Catalogs and brochures are available on the site to provide more information about the quality and nature of the vehicles offered. Internet advertising, particularly advertising through Google Adwords, will attract the attention of prospective customers to the website. SAMPLE Ltd’s website will convince them of the company’s professionalism as reflected in correct spelling and plausible wording.
7. International Trade Business Plan Sample – The Manager
Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE is the manager and sole shareholder of INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. She has a good profile for the planned business model, in particular professional experience, contacts and knowledge in marketing, management and customer service.
Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE studied graphic design after graduating high school in China and worked in several Chinese medium-size PR companies before starting her own agency in 2002. She ran it successfully for seven years. She closed it in 2009 when her husband asked her to become Assistant Managing Director of the SAMPLE Machinery Co., Ltd. She has since worked at the brake manufacturing company.
The Chinese native speaker speaks very good English, but has only basic knowledge of German. Although she can move well in the industry and on the international stage by hiring the right staff, Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE will work on her German.
8. International Trade Business Plan Sample – Staff
The staff required and their responsibilities are shown in the following table.
At the begin
Foreign language-speaking secretary (Full-time)
General administrative work, planning meetings, receiving clients, writing/translating correspondence, interpreting, phoning clients/suppliers, processing correspondence, etc.
Supervise suppliers and actively explore and set up new procurement sources, lead / facilitate negotiations, check and renegotiate offers, accompany the manager on visits to suppliers, ensure quality, logistics coordination, etc.
Consult clients, support and actively acquire new customers, lead/facilitate negotiations, research market information and compile analyses, evaluate statistics and process information, prepare presentations, maintain and support customer networks, plan and organize expansions, etc.
Foreign language-speaking secretary (Full-time)
s.o. and small tasks in the marketing area
9. International Trade Business Plan Sample – Finance plan
9.1 Clarification The capital contribution will amount to 100,000 Euro. The company will be structured to purchase merchandise in brief funding cycles. The other cost parameters, in particular personnel, rent and travel expenses will be planned so that no borrowing is needed. The necessary investments are manageable and primarily include investments in efficient office infrastructure, a company car and tangible and intangible assets that are important marketing-wise, for example a website and fair equipment.
INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. can jump on the bandwagon at once thanks to its existing network of contacts and can work on good credit terms, as partners’ confidence in INTERNATIONAL TRADE BUSINESS PLAN SAMPLE Ltd. is very high. This approach allows for a rapid increase in sales volume relative to the capital base.
A higher loss is expected in the first fiscal year as large sums will be invested and due to staff training costs, acquiring know-how and developing distribution logistics etc. The company will start making a profit in the second fiscal year if its capacity is set, the staff is busy and the clients are demanding a higher amount of goods and more consulting services.
9.2 Capital Mrs. INTERNATIONAL TRADE BUSINESS PLAN SAMPLE is planning to provide equity contribution in the amount of 100,000 Euro as the manager and sole shareholder.
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