Why export? 16 reasons!
Why export? 16 reasons to consider.
With globalization, new market opportunities for the products of companies from one country to another are opened up. However, before deciding to internationalize its SME (small and medium-sized enterprises), it must evaluates whether this process has any benefit to it, always taking into account that in order to participate in these markets, a differentiated product with a high added value is required. Make it competitive.
The first and main question that must be asked as an entrepreneur before turning to internationalization is, why export?
According to a document compiled by the Corporación Interamericana de Inversiones (CII), the answer to this question is that exports can allow profitable growth in turnover, which in turn allows access to a broader market, defense of foreign competition and a more regular distribution of sales.
The CII complements this idea with 16 other reasons why it may be beneficial to export:
- Contraction of the local or national market: if for some reason the domestic market contracts, that is to say, if the local buyers of the company reduce their level of acquisitions, the internationalized company will be much less affected by this situation.
- Opportunities entailed by the growing demand from abroad: the process of globalization leads to a constantly increasing demand for products from different regions. This demand is a great opportunity for companies.
- Generate economies of scale: having a higher demand can allow the company to increase its production and, thus, make it more profitable.
- Diversification of customer risk: when deciding to export, the company will increase the total number of customers with whom it works. The more clients you have, the less chance there is that any distancing from any of them will impact your profitability.
- Improve the profitability of the company: the increase in demand leads to increase production and sales and, with them, the profitability of the company.
- To become aware of the innovations in its sector at the global level: when competing in the international market, the company must adapt to the technologies that are used in those areas. Technological advances allow the company to grow.
- Do not lose competitiveness or the market itself: as a consequence of this type of growth – in profitability, in technology – the company can be innovative and be at the forefront of competitiveness in the market itself.
- Follow-up to clients: when internationalizing, the company will be able to give a greater follow-up to its clients.
- Excess production capacity: all the surplus production that the company has can be placed on the international market.
- Product and/or very mature market: the company will be able to locate its products in consolidated markets.
- Possible tax benefits: when internationalizing, the company may be able to reduce the proportion of taxes it pays.
- Grow, acquire size: the growth of the company is a natural consequence of internationalization.
- Capacity development: in order to grow and export, the company must improve its own tools. For example, by training their staff for their new tasks.
- Gain ability to compete: this increased capacity will enable you to better compete in your markets.
- Win prestige in the domestic market and improve the image: access to the international market can improve the company’s image in the domestic market.
- Adapt what is known to the needs of the market: internationalization can be a good opportunity to improve the production of the company according to the existing demand.
There is also the Intradebook platform that offers a free module (Intrade), in the basic version, that allows companies to know export routines and procedures, in an interactive and innovative way.
Source: Corporación Interamericana de Inversiones and Intradebook