In this module you will learn how to determine if your company and product are ready for export.
Export Capability – Scenario
What makes a successful exporter?
Lee-Anne and Murray own a business which produces designer ceramic tiles. They have been successful in the domestic market and are now looking to export to the US and Europe. Naturally they’re very excited. But are they ready?
Time, effort and commitment
It will take more time and effort to establish a firm in a foreign market than in a domestic one. They will need commitment.
A long range view
They will need to invest time and money before they see any return. They need to have a long range view.
The overseas market
A first hand knowledge of the destination market place will be invaluable. It is also important to have co-operative long term relationships with local partners.
Have they thought through how they will meet the needs for different skills such as finance, technical, marketing, administration and market experience?
Is their product ready for export? Have they researched why they feel that the product will attract sales?
Success is directly related to the soundness of your strategies and planning. Companies are more likely to be successful if they apply similar strategies to those that worked for them in the domestic market.
Is your management team committed?
Studies have shown that management commitment is regarded as a key factor in determining export success.
Management need to have a commitment to:
- setting of export objectives;
- dedicating the appropriate resources; and
- managing the program.
Management must be willing to accept some impact on near-term profits for long-term returns. In most situations, this adverse short-term impact is unavoidable as it takes time to establish relationships and put in place the arrangements needed for successful entry into new markets.
A new export endeavour can cost a company anywhere from $20,000 to $80,000 to set up. If there are fewer funds available for the export initiative, it may result in slower entry to the market and hinder the entire process. This can lead to failure and a waste of whatever money and time has been invested.
Assessing your capability
A second key test in determining if you are ready for export is to define why you are successful in the domestic market and determine how best to adapt that competitive advantage to your target foreign market.
You need to assess your company’s capabilities and to have a realistic picture of your company’s weaknesses.
Click on the headings below to read how to assess your company’s strengths and weaknesses.
Determining your Company's strengths
- Identify the strengths you believe your company has in the domestic market.
- Be honest about your company's competitive capabilities.
- Add any other factors you believe are important or unique to your product/service which would make you competitive overseas.
Weaknesses/issues your company may have
- Lack of experience.
- Lack of marketing ability.
- Slow or inflexible production.
- Need for more staff.
- Need for new or improved technology.
- No customer feedback.
- Lack of investment dollars for export.
- Inability to change product or packaging.
Assess your company’s capabilities
Now that you have had a think about your company’s strengths and weaknesses, click here to answer this quick quiz.
After the quiz you will receive feedback on whether your company is ready for export.