It’s been a challenging two years for the oil and gas industry, with suppliers working hard to survive and adjust to the new normal. But opportunity is knocking in 2017, and much of that opportunity comes in the form of exports.
Exporting, of course, is not new to Canadian oil and gas suppliers. We are among the best in the world in terms of technology, innovation, work practices and environmental compliance. Buyers around the globe trust Canadian suppliers when they are looking for technologies and companies they can rely on.
When the oil and gas market was stable between 2010 and 2014, as well as during prior booms, many Canadian manufacturers became exporters. Oil and gas services suppliers, on the other hand, often found more than enough opportunities in their own backyards and didn’t experience as strong a push toward entering global markets. Now, however, these same services suppliers are beginning to look abroad so they can survive and thrive in the coming years.
Oil and gas services face particular exporting challenges
The biggest challenge for services suppliers is establishing a firm local presence in the markets that they either serve or want to serve. Manufacturers can manage a very lean global sales organization while keeping their core business activities within Canada, but services, by their very nature, must be delivered locally. So if you’re a services company, you must not only establish a global sales and support function, you must also be able to deliver your services abroad. This adds exponentially to the challenges of opening up new markets. Fortunately, you can overcome these challenges with the right preparation.
Four steps for entering new markets
1. Do your homework
The increasing activity in the U.S. oil and gas industry, especially in Texas, is promising for both new and existing Canadian services exporters. And since the United States is one of only two markets where you can drive your truck to the work site, it can offer particular advantages for services companies.
That said, however, the United States is also the world’s most overserved market, so you need to do your homework to identify your best international opportunities. A good place to start is with JWN Energy Group’s research reports, Going Global Phase I and Phase II, which evaluate 16 markets and countries including the United States, Argentina, Mexico, Australia, China, Saudi Arabia and more. You can use these reports to gather export intelligence on new markets and decide where you’re most likely to succeed.
2. Understand your competitive advantages
Every business has something that makes it better than its competition, whether it’s product, knowledge, experience or price. If you understand where you have an edge over your business rivals, it will help you decide where you can best compete.
3. Reach out to potential partners
Connect with partners at EDC or with your province’s trade representatives, who represent our oil and gas suppliers around the world. Use these partners to understand what opportunities, resources and help are available to you. There are also a number of industry associations you can join that will help you tap into global networks and find new exporting opportunities.
4. Grow your market share
If you’re already exporting your services to the United States and you’ve done extremely well in that market, there’s a strong argument for focusing on deeper, broader growth within it. According to JWN, many Canadian services companies are still sub-scale in the markets where they serve their clients. Deepen your knowledge and expand your network in the United States, and use the experience you’ve gained when you’re ready to go farther abroad.
For more insight into breaking into new markets, read EDC’s article on 6 Ways to Break Into Markets to Win New Customers.
Exporting should always be top-of-mind for organizations that can compete on a global stage. Download JWN’s Service & Supply 2017 Outlook Report for a deeper look at the challenges, opportunities and actions you should consider for managing your business better in these challenging times.