Program Puts Interns in International Arena to Help Small Companies : Education: Three graduate school students are working full-time with local businesses that want to expand their sales in foreign markets.
In a few weeks, tens of thousands of college seniors will don caps and gowns to receive their hard-earned diplomas.
Although Christopher J. Brand is not due to graduate until December, it will be a commencement of sorts later this month for the 24-year-old intern at Relth Machinery Group Inc., an Anaheim company that manufactures machines that make paperboard boxes.
Brand, and two other students from the American Graduate School of International Management in Glendale, Ariz., are winding down a three-month experimental program that assists small companies in selling products and services abroad. For Brand, who’s fluent in Spanish, his internship has meant researching potential foreign markets and developing a business plan for Relth to sell its machines in Latin American nations, including Chile and Venezuela.
The other members of the Class of ’92 in Orange County this summer are Matthew E. Valder, 28, who’s helping Newport Beach-based Miralite Communications Inc. sell more satellite equipment in Mexico; and Veronica R. Bravo, 27, a student from Ecuador who is working with Atkin/Jones Computer Services in Santa Ana to open foreign markets--such as Brazil, Ecuador and Mexico--for its computer software.
The program--called the Thunderbird International Internship--is aided by a two-year, $56,000 grant from the U.S. Department of Education to the graduate school and the World Trade Center Assn. of Orange County. The money has subsidized the initial group of Thunderbird interns--made up of Brand, Bravo and Valder--to work full-time with small companies to help them enter or expand foreign markets. The grant, which ends in September, 1993, will provide similar assistance to at least 15 more small and mid-sized companies that provide jobs for Thunderbird interns.
Participating companies need not be association members, but they must provide about $1,500 in monthly salary or its equivalent in kind if it decides to provide free lodging and travel expenses to the interns, said James C. DeLong, director of development at the county’s World Trade Center Assn.
The program’s long-term goal is to reduce the nation’s $66.2-billion trade deficit by grooming a generation of business people familiar with export or international trade and to encourage more businesses to sell abroad, said Susana Easton, senior program specialist at the U.S. Department of Education in Washington.
The program hopes to raise the share of exports by small businesses, which account for about 20% of all U.S. exports, according to a 1991 report by the U.S. Small Business Administration.
If successful, the program could prompt other schools to form a partnership with about 70 world trade center associations in the nation starting in 1994, when the result of the program is assessed by the school’s professors and association executives, DeLong said.
This initiative comes at a time when many small- and mid-size companies are hurting from the recession. Many are seeking to expand sales internationally as an alternative. But lack of financial resources and competitive market conditions abroad make it nearly impossible for small business owners to hire a marketing staff. Others complain of having neither the time nor skills to research foreign markets.
The internship program hopes to fill this void, said Margaretta W. Brede, director of government grants at American Graduate School of International Management. The program combines the textbook knowledge of business students and the savvy of small companies and the trade associations to provide students with experience and to give companies a shot at exporting, she said.
For Relth Machinery, the internship program was timely. The company has developed a corrugated box-making machine that sells for about $550,000, which is about 40% below the average price of similar machines sold in the United States.
Edward Relth began receiving inquiries about 18 months ago from companies in Korea, Thailand, Chile and other developing countries about the less-expensive machine. While excited about selling abroad, Relth’s enthusiasm was tempered when he discovered that international marketing is more complex than he anticipated.
Until then, selling abroad was at best a nuisance to Relth, who is the son of the company’s founder and vice president of marketing. But as the recession deepened and domestic orders slowed, exports--which made up 5% of the company’s $2.5 million in 1991 sales--became crucial for the company’s growth.
“We’re seeing developing countries in Latin America prefer American machines over those made in the Far East, (but) we’re a small company and we can only borrow so much from the bank” to help finance marketing efforts in addition to transportation and manufacturing costs, Relth said.
“We needed help in finding certain financial instruments that will make it easier for us to export our machines and to get paid,” he said.
Brand helped Relth Machinery target Latin American countries where it could make significant sales of its machines. He also helped design a financing package to support its expansion abroad.
“He’s doing a good job. We’re wrapping up the proposals and are about ready to go,” Relth said.
Through monthly meetings at the association’s headquarters in Irvine, professors of the Thunderbird program and key members of the trade association guide the interns and the companies in shaping and executing their business plans. Later this month, the entire group--made up of the interns and representatives from the school, trade association and participating companies--is scheduled to go on a trade mission to the target market (in this case, Latin America) to test their marketing plan and to meet executives there who can help. Air fare will be provided by international airlines, such as British Airways, said Victoria Biagiotti, internship coordinator for the Orange County trade center association.
The internship program is also flexible, according to executives at Atkin/Jones. When Bravo started working with the 14-year-old company in February, her job was to develop and expand the export market for its new product, Power Witness--a software program that protects data from being lost when electricity is cut or the current becomes irregular. The software, the company said, would likely sell well in developing countries, such as Mexico and the Philippines, where power failures are common.
Atkin/Jones sold about $10,000 worth of software abroad last year, but Chairman Greg M. Atkin said it could have done better. Bravo was hired to explore new foreign markets. But that plan changed when Atkin found that it takes more money than his company could afford to invest to crack the global market.
“With our limited resources and because our software is a new product, we decided to concentrate on expanding first in the U.S. market before going abroad,” Atkin said.
Bravo has a talent for finance and Atkin said he channeled her energy into helping formulate a bank refinancing package, which it submitted last month.
“One of the great assets of this program is it offers subsidized labor to small business owners,” Atkin beamed. “It’s our government at work.”
At Miralite Communications, Valder has crafted a business plan to sell satellite dishes and equipment in Mexico. He has already traveled to Hermosillo City, Mexico City and Tijuana several times with company executives to help negotiate contracts and to establish contacts in several states.
Valder, a Phoenix resident, became fluent in Spanish as a teen-ager, but he said he didn’t understand the Latino culture until he lived in Ecuador as a Peace Corps volunteer for four years through 1990. With only a semester to go, he said the internship has given him an opportunity to observe the realities of running a company. He found some courses, such as management classes, are mostly based on running a large corporation and irrelevant to small business.
“He’s getting a valuable lesson on what’s important and trivial to running a business,” said Miralite’s president, Frederic J. Fourcher.
Valder agreed. He said his experience has been different from Thunderbird’s “idealistic ivory tower-type of education.” He plans to take more finance courses before graduating in August to better prepare for what he calls “the real working world.”
This innovative internship program for graduate business students is a legacy of Susan T. Lentz, former president of the Orange County trade group, who left in January to establish the World Trade Center Arizona in Phoenix.
Lentz, an alumna of Thunderbird, laid the foundation two years ago, after realizing there were no internship programs linked to companies trying to enter the export business.
Once companies join the program, the World Trade Center will provide some support even after the internship period has expired, Biagiotti said. These include helping companies contact foreign distributors and helping them implement the newly developed business plans, she said.
The most valuable aspect of any internship program, said Cihan Colakoglu, is it could lead to a permanent job. The Turkish mechanical engineer was once a student intern at Alpha Microsystems Inc. through an international exchange program called AIESEC, a French acronym for the Belgian-based organization International Assn. of Students in Economics and Business Management.
It has turned into a “perfect learning experience,” Colakoglu said.
“I had the engineering knowledge and I wanted to learn more about computer science and the industry,” he said. “And since Alpha Microsystems builds computers from scratch, this provided me a perfect opportunity to learn more about hardware manufacturing and writing software.”
Colakoglu did such a good job that his supervisor at the Santa Ana business computer systems company offered him a job as a software quality assurance analyst when his yearlong program ended at Cal State Fullerton in August, 1990.
Class of 1992
Three Orange County firms are sponsoring internships for students from the American Graduate School of International Management in Glendale, Ariz. The internships give the students hands-on experience and give the firms a head start on marketing products abroad. The candidates for master’s degrees will receive $1,500 per month for the three-month internship period.
Veronica R. Bravo
Age: 27
Specialization: International marketing and finance, trade management
Graduation date: December, 1992
Undergraduate: Bachelor’s degree in economics in July, 1990, from Pontifical Catholic University of Ecuador in Quito
Permanent residence: Quito, Ecuador
Internship: Atkin/Jones Computer Services Inc., Santa Ana
1991 sales: $1 million
Employees: Eight, plus one intern
Nature of business: Repairs and maintains minicomputers; manufactures and sells power supply monitors
Internship responsibilities: Latin America marketing consultant
Christopher J. Brand
Age: 24
Specialization: International marketing with emphasis in Latin America
Graduation date: December, 1992
Undergraduate: Bachelor’s degree in economics in May,
1990, from University of Missouri at Columbia
Permanent residence: Red Bud, Ill.
Internship: Relth Machinery Group, Anaheim
1991 sales: $5 million
Employees: 19, plus one intern
Nature of business: Manufactures and distributes paper-converting machinery for corrugated box and graphic-finishing industries
Internship responsibilities: International projects manager
Matthew E. Valder
Age: 28
Specialization: Advanced corporate finance, international finance,trade
Graduation date: August, 1992
Undergraduate: Bachelor’s degree in English with a minor in Spanish in May, 1986, from Loras College in Dubuque, Iowa; undergraduate business studies at Phoenix College in Phoenix; Peace Corps in 1986
Permanent residence: Phoenix
Internship: Miralite Communications Inc., Newport Beach
1991 sales: $5 million
Employees: Nine, plus one intern
Nature of business: Manufactures and sells commercial satellite dishes, peripherals and Earth stations
Internship responsibilities: Develop market strategy for expansion into Mexico
