There are many different reasons why a business might choose to expand overseas – perhaps they want to reduce the exposure to fluctuations in demand in the home economy or perhaps they have identified an opportunity abroad.
Either way, entry into the export market can offer many benefits, such as:
- Rapid sales growth
- Increased profitability
- Improved productivity
- Providing economies of scale
- Raise the company profile
- Improved aspirations and morale.
Not all goods destined for the home market will sell overseas. Some will never have an export market or will need to be modified before they are saleable abroad. If you are thinking of exporting, one of the first things you should do is assess how suitable your product is for markets overseas.
Ask yourself the following questions:
- Is there a demand in the export market?
- In which countries are there the best opportunities? Then select one primary target country
- What are the best sales channels for any product in that market?
- Will my product need technical or design modifications?
- Can it be packaged suitably for international transport?
- Will it have a competitive landed price when modification and transport costs have been included?
- Is an export license required?
- Assess and profile the competition:
- Having evaluated the export opportunities, one of the next things you should do when researching the export potential of your product and service is to make an assessment and profile of the competition the product or service will face.
- Ask yourself the following questions:
- Who is my competition?
- How established are they in the market?
- Which of their products/services compete directly with mine?
- In which way does my product/service differ from those of my competitors?
- What are my key selling points?
- Are there any specific weaknesses in the competitors’ products/services?
- What channels of distribution do competitors use?