Before Exporting

Before analyzing the Export Plan, we must consider the new realities an exporter has to face when tackling the challenges posed by participating in the world of international commerce on a global scale.

The reality of a complex international market demands that an exporter has an understanding of the importance of and difficulties generated by commercial agreements with businesses in other countries, whether they be unilateral or multilateral, given their impact on not just a commercial but also on a political, social and environmental scale.

What does it mean to export?

The simple answer is "to send (goods or services) to another country for sale".

This may seem rather elementary, but exporters know all too well the constant challenge and daily labour it implies. A challenge that provides a return only after the product has been accepted on the export market.

Producing and selling on the local market requires great dedication and endeavour, however, selling on the international market demands an even greater effort as other systems and procedures come into play.

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What are the Benefits and Risks Associated with Exporting?

Benefits:

Risks:

You can improve your company’s market share Increase your production and reduce the risks associated with dependence solely on the national market Particularly relevant in the case of decreased demand on the national market. The quality of your product will improve considerably As it comes into conformance with international standards. Innovation Technology Increases competitiveness and improves quality of your product.

Jumping in without thinking One of the most common risks is connected with inexperience. Accessing a number of new markets without considering your company’s production capacity to fulfil large volume orders could be detrimental to your company. Financial risks You could potentially fill your order, send the goods and not receive payment. Here there could be two possible explanations; either the buyer’s requests were not fulfilled (packing, quality, delivery times etc.) or the buyer is insolvent. Legal risks You should beware of becoming involved in high-profit, quick deals that promise the world, often these deals are not completely legal. Political risks These are risks associated with extreme political changes in the partner country.

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Frequently Encountered Obstacles

It’s vital that your company understands the nature and characteristics of common difficulties and complications that present themselves at the level of international commerce.

Product:

Significant challenges that could present themselves are those of adapting your product to the demands of the market, not supplying the quantity requested by the buyer or not achieving the agreed the quality and/or delivery times.

Price:

A reduction in competitiveness due to incorrect pricing strategy, could be problematic to your business. Similarly, failing to carry out adequate research on market competitors could create positioning and pricing difficulties.

Distribution Channels:

Lack of information on suitable distribution channels or selection of an unsuitable distributor could present problems for your export strategy.

Promotion:

Lack of resources or information on promotional methods used on the open market could restrict your product’s market positioning.

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