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Case study: Export

How FoamPartner gained a foothold in Japan

An article in «Cash» dated 8th November 1996 brings foam experts, FoamPartner and the private export promotion company, Fargate together. After their success in Japan and Taiwan, they are now working on more target markets. Key to successful exports: Project implementation.

"Young company, Tozai, opens up the Asian market for small and medium-sized enterprises", wrote the business newspaper, «Cash», on 8th November 1996. The sales manager of Fritz Nauer AG, Wolfhausen, is impressed. He immediately reaches for the phone and explains his business expansion plans to the Tozai Group AG: «As a leading Swiss company with a worldwide presence in the field of foam technology, we want to tap new sales markets outside of Europe with our new product line named "Integra".» The company markets therapy related reclining and sleeping systems for medical and private use under the brand names INTEGRAswiss® and INTEGRAmed®.

Long-term co-operation

That particular telephone conversation inspired by «Cash» proved to be the starting point for long-term co-operation in the field of exports, where both partners have made an appearance today under different names: The Tozai Group AG has now been integrated into the satellite network of Fargate AG as the local base in Japan; Fargate AG was founded in 1998. And Fritz Nauer AG has been operating since the year 2000 with a global network of companies under the umbrella brand name, FoamPartner. «Two key factors can be stated as being decisive for collaborating with Fargate,» says Rita Kollbrunner, project manager for 'Integra' at FoamPartner.: «Firstly, the network of local satellites and secondly, the system of payment contingent on success.» In fact, the expenses involved in market studies, market development as well as investment costs for exports are actually quite low. And Fargate attempts, as a matter of course, to forge long-term relationships with clients right from the very start: payments start flowing in regularly only when the volume of sales as desired by the exporter has been attained in the target market.

Local satellite

On being queried as to why she did not work with OSEC, the state export promotion body of Switzerland, Rita Kollbrunner emphasizes: «OSEC functions primarily as an agency providing export consultancy. But apart from export consultancy services, FoamPartner mainly requires assistance in implementing the project. The new product line 'Integra' does not have adequate resources either by way of personnel or finances to be able to tap new Asian markets merely on the strength of its own existing staff. Besides, entry into Asian markets is not possible with the help of a qualified partner and good products alone. An understanding of the mentality and culture of the people coupled with proficiency in the local language play a much more significant role in day-to-day business interactions in this context. The local satellite engaged by Fargate functions as an important interpreter and 'teacher' of the foreign culture here.»

Line of action

The foundation for co-operation is laid at the very beginning by the signing of a framework agreement by FoamPartner and Fargate. Subsequently, the Fargate-project manager is furnished with detailed and comprehensive information about FoamPartner and the product line 'Integra'. An initial analysis is prepared on the basis of this information and a detail concept is worked out. A questionnaire for a thorough analysis along with an introduction package («Intropack») is submitted to the satellite in the target market at the time of introducing the project. The introduction package includes information about the company and the product as well as product samples. Data about the target market, information about the local satellite and profiles of the market partners enable FoamPartner to make a preliminary decision. Subsequent meetings with potential business partners in the target market afford the client the opportunity of coming to a definite decision and signing the agreement.

Countdown to success

Rita Kollbrunner reports varying experiences of success in these endeavors: «In Japan it took us a year from the beginning of the project to reach the point where business transactions started bringing in profits. In Taiwan, on the other hand, we tasted success after merely two months. » This was the result of thorough groundwork which made it possible to finally zero in on the right partner. The time required for finding the right company can be reduced with a bit of luck. Rita Kollbrunner: «Of course, the example of our experience in Taiwan cannot be regarded as the yardstick for gauging the amount of time required for such endeavors. Our experience with other projects shows that a time-span ranging between six months to a year is more realistic for forging a functioning business relationship.»

Support and assistance

The Swiss project manager is and continues to remain the contact person for the company intending to export. And more importantly, he or she have their eyes and ears wide open for any shortcomings in the services provided by the satellites. This kind of openness, experience and ability to initiate the right measures at the right time, form the mainstay of effective liaising. «Thanks to the positive experiences gained by FoamPartner and Fargate, their co-operation is going ahead full steam. Presently, there are five more projects under process which would enable us to establish more business contacts in new target markets,» reveals Rita Kollbrunner and continues, «Any enterprise desirous of expanding their export business to new markets should examine the idea of using their own resources for the purpose very critically. Even the best of knowledge and information about a target market do not necessarily translate into success. Rather, it is the implementation of an export project that devours the maximum resources. That is the reason why attention must primarily be focused here.» That this approach has paid off is amply demonstrated by the figures: FoamPartner could achieve a turnover of approximately three million Swiss Francs in the year 2000 with the export of their products to Japan.