Reasons to export: opportunity or long term strategy?
Access foreign trade ‘just because’ without clear awareness of the responsibilities and benefits as consequence, may not generate value to the enterprise.
Enterprises often see exports as an opportunity and less as a long term business strategy. Reasons can vary and need to be evaluated so to identify the actual value of entering foreign trade. To any company size, be it micro, small, medium or big, strategic factors such as market diversification, learning about other cultures, develop new production techniques among others, will contribute to the enterprise longevity.
Among strategic factors to access international markets are:
- Market diversification: expand the customer and supplier network will decrease the seasonality risk of the business and improve its management effectiveness.
- Gain competitiveness: by acquiring knowhow, new technologies and added knowledge about logistics, products and processes.
- Learn from other cultures: connect with different strategies and management styles to keep improving the current business.
- Adopt new production techniques: take the interaction with international markets to implement production enhancements with advanced technologies from more developed economies.
- Increase production: improve the production capacity with the new market demand and with greater volumes reduce fixed unit costs.
- International competition: raises the bar of product quality standards with potential development of new products or new product features.
- Overall image: going international improves the enterprises perceived image as it evidences a more competitive business in general.
- Reduce business risk: by not depending on one market exclusively. Sell to different markets abroad can save a business from market downturns, being it domestic or elsewhere.
The above listed and other factors such as tax incentives – some economies collect more taxes in the local market while they incentive exports – can be listed as yet another benefit to go international. Global competition will necessarily demand from the enterprise to be both effective and efficient, take quick decisions based on global market information and not only from national data.
The big gap between export planning and actually be successful in the international market, as opposed to remain in the domestic market, is the lack of human and financial resources. This can be a big barrier to be surpassed. What many enterprises don’t realize is that gong international will bring benefits to its performance both in domestic and international markets as international enterprises tend to be better prepared to face crisis and adversities.
Therefore, the challenge is to optimize the use of financial and human resources in coordinated and successful actions in foreign trade. An important task to go international is having access to theoretical and practical training on the routines and procedures involving foreign trade. The Intradebook free platform, with its modules INTRADE, INBUSINESS and INSERVICE helps enterprises to bridge the gaps to export and import. It offers the learning environment, consultation and simulation of the entire export or import processes on a step by step basis. Connects buyers and suppliers through a showcase of products and facilitates the international business execution by connecting the parties with a portfolio of services providers.
Entering international trade adds value to the business, whichever the enterprise type, product or service. It shall however not be taken as a one off opportunity, but rather be part of the enterprise long term strategy.