Should Your Company Export?
Making the decision to export requires careful assessment of the advantages and disadvantages international market entry. Once the decision has been made to export, developing an export business plan and an international marketing plan are essential.
Some of the benefits of exporting are:
- Enhance domestic competitiveness
- Increase sales and profits
- Gain global market share
- Reduce dependence on existing markets
- Extend sales potential of existing products
- Stabilize seasonal market fluctuations
- Enhance potential for corporate expansion
- Sell excess production capacity and inventory
- Gain information about foreign competition
In making an informed, balanced decision to export, it’s important to note that there are certain trade-offs that can be expected. Some of the disadvantages may justify a decision to either put off exporting or to start very small. However, with every obstacle there is opportunity. Perhaps you cannot afford to establish an over-seas sales office, but you could use the services of an intermediary (a trade broker or a sales agent).
- Use short-term profits to achieve long-term gains
- Hire staff to launch export expansion
- Modify product or packaging
- Develop new promotional material
- Incur added administrative costs
- Wait longer for payment
- Apply for additional financing
- Dedicate personnel for traveling or train personnel to understand global efforts
- Obtain licenses
All in all, your company will need to make an informed decision if the time is right to go global. It will take commitment from the top down. Management commitment is especially key, as if the managers have not made exporting a priority, neither will the front-line personnel. However, most of the challenges can be overcome with the right planning and guidance.
If the Import Export Institute can be of service to you in determining export readiness or assisting in training and establishing systems, call us at 888-855-7515.