Opportunities and risks when entering new markets

What is needed to successfully enter a new market?

When it comes to covering export transactions, companies can rely on Brigitte Brüngger and the Large Enterprises, SMEs & Acquisition team. In our interview, the head of department within the Insurance Business division of Swiss Export Risk Insurance SERV looks at the opportunities and risks associated with entering new markets.

Ms Brüngger, you and your team support Swiss companies in carrying out export transactions. In your experience, what do they need in order to successfully expand into a new market?

To enter new markets, they need a healthy risk appetite and good sales arguments, but also a reliable partner that takes on risks in difficult markets.

Which risks are we talking about?

Both political and economic risks. The challenges are multidimensional: war, climate change, the ailing economy and the strong Swiss franc. Only agile companies can adapt to changing circumstances to remain internationally competitive. They need to be aware of the increased risks and know how best to manage them.

Do different contract phases hold different risks?

Absolutely. Exporters often incur upfront costs for a transaction and then also have a long production period. After delivery, the question becomes: can the counterparty abroad pay? Will there be issues with transferring foreign currency from the buyer country?

“We have Swiss exporters covered when no one else does.”

Can there still be a healthy risk appetite given all of these risks?

With a strong partner like SERV, yes. Companies wanting to keep up internationally need to face up to the challenges. And we have Swiss exporters covered when no one else does, since SERV insures risks in countries that are not covered by private insurers.

Which sales arguments can benefit exporters? 

From an economic point of view, buyers are demanding more and more flexible and longer payment periods, for example. Exporters that can offer long payment periods therefore have an advantage. This means higher upfront costs and financing gaps for the exporter, as well as a longer period of payment uncertainty, but these risks can be mitigated with insurance from SERV. Our cover also gives the exporter access to loans and refinancing, ensuring its liquidity. 

And when exactly does SERV come in for an export contract? 

The answer is always: as early as possible. We analyse counterparties for exporters even in the first phase of negotiations. After assessing the transaction in more detail, we can also give binding insurance commitments, setting the exporter in good stead for the contract negotiations.

How does SERV do this? 

SERV is an institution under the public law of the Swiss Confederation. Operating in an economically viable manner and on the basis of subsidiarity, we insure export transactions of Swiss companies, especially against payment defaults. Our products can also help to secure liquidity. 

This is clearly stated in our goals: we help the Swiss export industry to compete internationally and we create and retain jobs in Switzerland. And every one of our employees is committed to this aim.