When you are preparing export strategies for a company, which factors are considered?
First, it should be considered a market study with a map of strategic positioning in each target country.
Then, based on export costs and logistics, feasibility must be assessed in each of these potential markets.
Well considering the legal frameworks of each country to export existing treaties, potential foreign distributors, compotedores potential to reduce prices, etc..
Many people ask, why do a company need an Export Strategy? Why should the company develop one? Isn’t this only for big companies?”
It is critical to analyze the company motives for entering overseas markets. The key questions to ask are:
-What does the company want to gain from exporting?
- Is an export program consistent with the company goals?
-Do we have the resources – financial and human – to execute an export program?
-Are the company products or services exportable – or are major modifications required?
The company decision to export may be prompted by a range of factors:
-Expanding sales and profits.
-Establishing a broader and more stable customer base.
-Utilizing excess capacity to lower costs.
-Responding to competition.
-Accessing new technology for overseas markets.
An essential element in developing a sound strategy is to identify the key factors that have influenced the company decision to export. Draw up a ‘long list’ of all the issues that have prompted the company to export. This list will serve as the basis of discussion with a range of staff to rank these factors and understand why they are important to the success of the company business. Reduce the list to about 5 of these factors and build the company strategy around them – and from that, the company Export Plan can be developed. There are strong advantages to having a written strategy – and it need not be long. It must be simple, understood and accepted by all company members. It serves as a constant guide and binds staff commitment to the company’s export efforts. The effort the company makes at this early stage in outlining and defining the company Export Strategy will be repaid as you continue the export journey. Successful exporters always have a clear idea of why they are exporting and the results and benefits they expect to achieve.
A sound strategy marks the professionalism of the company and provides valuable benefits when dealing with banks, customers and support agencies. It provides direction to the company staff and their involvement in its creation is a critical factor in embedding an export culture in the company.
Conditions change – and the company strategy will need to adapt to shifting environments. The company export strategy should be modified when unexpected situations emerge. Make the company strategy readily available to staff and review it on a regular basis.
As the company export business matures, the company will become more aware of the external factors that influence the comapny strategy and develop ways in which you can manage and adapt to them. These external issues can include availability of finance, exchange rates, and import regulations in your export markets, new or unexpected competition, technology shifts and logistics.
Anticipating change and adapting to external factors is a vital factor in the export planning process.
A balanced strategy requires clarity in objectives and also a statement of targets at a broad level.
Many companies enter export as a result of a random buyer enquiry – and often succeed through responding to market demand. Pursuing an Export Strategy through careful planning will ensure that the company:
-Acts on well-researched information.
-Has analyzed and assessed the best options.
-Identifies constraints and their impact on the company’s business.
-Has the resources to become a viable exporter.
-Creates confidence with lenders and demonstrates that the export program is viable.
-Understands competitive pressures and has plans to ensure the company maintains and increases its market share and industry standing.
Like an Export Strategy, an Export Plan need not be a detailed document, which has been well-constructed will be read and acted on by staff responsible for its execution. Use each of the points in the Export Strategy to compose the Plan. These elements could include the following:
-Create a plan summary with key headings and commence a task list.
-Develop a timeline for the Export Plan.
-Allocate responsibilities to key staff and ensure they have the resources to deliver against the company program.
-Select products or services most suitable for export. Assess supply capability and necessary modifications for export.
-Analyze customer profile to provide pointers to market selection.
-Undertake the market selection process to produce a long list of potential markets.
Some “Do’s and Don’ts”in Export Planning
-DO establish strong linkages between the Export Strategy and the Export Plan.
- DO ensure the company key staff members are ‘signed on’ to the Plan.
-DO seek good advice – and test the company Export Plan with advisers.
- DON’T create a bulky document that remains static.
-DO review the Export Plan regularly with the company staff and advisers.
-DO assign responsibility to staff for individual tasks.
-DON’T use unrealistic timelines. Review them regularly – they often slip.
DO make sure the various elements of the company Export Plan mesh with the Export Strategy.
-DO create scenarios for changed circumstances – look at the “what ifs” for changes in the market environment from minor to major shifts in settings. eg changes of government, new import taxes.
-DO develop an integrated timeline that draws together the activities that make up the Export Plan.
-DO make sure that the company have the human and financial resources necessary to execute the Export Plan. Ensure existing customers are not neglected.
From a Business perspective the export strategy is devised on
1. Potential longevity
2. Exponential Economic potential and not on scale of volumes.
3. Reliable payment terms.
4. Third party inspection of site before FOB.
5. Quick delivery from the port of receipt else holding of goods may invite obsolesce, environmental and safety concerns to the consignment
Jorge provided an interesting elaborate answer. I would like to add that it is the factors of strategy implementation rather than factors of strategy elaboration that are very relevant. Indeed, factors linked to strrategy elaboration are interesting for conceiving a strategy. But one should not downplay implementation process. It may lead you to change you strategy completely.
Mohamed. The implementation process is contained in the Plan mentioned in my comment. Having an export strategy is very important, but you need to have also an Export Plan in order to put in practice the strategy elaborated.
I perfectly agree with all previous comments. As a marketer, I underline the issue of having precise goals and analysing market potential if the question is related to export strategies . But for SME it is essential to have the right mindset, too. In many cases they 're not endowed to undestand the potential consequences of the export process and refuse adjustments. If you prepare an exporta strategy, pls. control if the endowment is coherent (culture, knowlegde, staff, language knowledge, market orientation).
i am agree with previous comments especially Jorge's and Carolina's prestigious comments.
Hi Yahya,
These papers may help
https://www.researchgate.net/publication/299747565_Towards_a_talent-driven_outward-oriented_globally-competitive_SME_framework_Discussion_Paper
https://www.researchgate.net/publication/260638458_Strategies_for_enhancing_Jamaican_competitiveness_in_the_global_knowledge_economy
https://www.researchgate.net/publication/299604127_Human_Factors_Affecting_Productivity_in_Jamaica_Technical_Report_on_Preliminary_Findings
Technical Report Human Factors Affecting Productivity in Jamaica: Technical R...
Technical Report Towards a talent-driven outward-oriented globally-competitiv...
Conference Paper Strategies for enhancing Jamaican competitiveness in the glo...
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