Geopolitica

EXPORT STRATEGY
ASSESSING A PRODUCT'S EXPORT POTENTIAL
There are several ways to gauge the overseas market potential of products and services.
(For ease of reading, products are mentioned more than services in this guide, but much of
the discussion applies to both.) One of the most important ways is to assess the product's
success in domestic markets. If a company succeeds at selling in adomestic market, there
is a good chance that it will also be successful in markets abroad, wherever similar needs and
conditions exist.
In markets that differ significantly from the domestic market, some products may have limited
potential. Those differences may be climate and environmental factors, social and cultural
factors, local availability of raw materials or product alternatives, lowerwage costs, lower
purchasing power, the availability of foreign exchange (hard currencies like the dollar, the
British pound, and the Japanese yen), government import controls, and many other factors.
If a product is successful in a domestic market, one strategy for export success may be a
careful analysis of why it sells here, followed by a selection of similar markets abroad. In
this way,little or no product modification is required.
If a product is not new or unique, low-cost market research may already be available to help
assess its overseas market potential. In addition, international trade statistics (available in
many local libraries) can give a preliminary indication of overseas markets for a particular
product by showing where similar or related products are alreadybeing sold in significant
quantities.
If a product is unique or has important features that are hard to duplicate abroad, chances are
good for finding an export market. For a unique product, competition may be nonexistent or
very slight, while demand may be quite high.
Finally, even if domestic sales of a product are now declining, sizeable export markets may
exist, especially if the productonce did well in the United States but is now losing market
share to more technically advanced products. Countries that are less developed than the
United States may not need state-of-the-art technology and may be unable to afford the most
sophisticated and expensive products. Such markets may instead have a surprisingly healthy
demand for products that are older or that are considered obsoleteby market standards.
MAKING THE EXPORT DECISION
Once a company determines it has exportable products, it must still consider other factors,
such as the following:
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What does the company want to gain from exporting?
Is exporting consistent with other company goals?
What demands will exporting place on the company's key resources - management and
personnel, production capacity,and finance - and how will these demands be met?
Are the expected benefits worth the costs, or would company resources be better used
for developing new domestic business?

Answers to these questions can help a company not only decide whether or not to export but
also determine what methods of exporting should be initially used.
THE VALUE OF PLANNING
Many companies begin export activitieshaphazardly, without carefully screening markets or
options for market entry. While these companies may or may not have a measure of success,
they may overlook better export opportunities.
In the event that early export efforts are unsuccessful because of poor planning, the company
may even be misled into abandoning exporting altogether.
Formulating an export strategy based on good informationand proper assessment increases
the chances that the best options will be chosen, that resources will be used effectively, and
that efforts will consequently be carried through to completion.
The purposes of the export plan are, first, to assemble facts, constraints, and goals and,
second, to create an action statement that takes all of these into account. The statement
includes specific...