Export is primarily an international trade activity that refers to offering goods and services produced in the home country to other markets. Export of commercial quantities of goods usually requires involvement of the customs authorities and other regulatory authorities in both the country of export and the country of import.
Export can also be defined as a function of International trade whereby goods and services produced or offered in one country are shipped/provided to another country for future sale or trade. The revenue derivable from these activities add to the producing nation's gross output.
Export Entry Strategies
Several market entry strategies are available for a firm wishing to access foreign markets. Entry strategies include Exporting, Licensing, Franchising, strategic alliances, joint ventures and wholly owned subsidiaries. However, because export entails limited risk, expense and knowledge of foreign markets and transactions, most organizations prefer exporting as their primary foreign market strategy. Export is a strategy of producing products or services in one country (often the producer's home country), and then selling and distributing to customers in another country. The organization that is exporting retains her producing/manufacturing activities in the home market but conducts marketing, distribution and customer service activities in the export market, the firm may conduct the latter activities itself or contract with an independent distributor or agent to have them performed (Cavusgil, Knight ,Riesenberger).
STEPS TO EXPORTING
Potential exporters evaluate the various global market opportunities and access available to the organization viz-a-viz the potential product or services to be exported. The firm’s decision and readiness to export depends greatly on the ability to identify:
- the most attractive export market
- identifies qualified distributors, brokers, direct buyers and traders
- estimates industry market potential
- company sales potential
Firms need to determine the resources required to export:
- Financial, investment & taxes
- Regulatory, licenses and government approvals
- Skills & capacity
- Productive resources
- Freight forwarders, Shipping companies, Cargo Companies, Airlines
- Trade support
They also need to understand the extent to which they would rely on domestic and foreign partners to carry out export.
To achieve this many at times, the options available are exported directly or indirectly through partners within the domestic and foreign markets
Acquire skills and competences
Exporting is often complex and as a result requires specialized skills and competencies. This implies that intensive training, seminars, workshops are required to fill the knowledge gap. In a situation where finance is a challenge, the firm may outsource or partner with a trade support company with legally binding agreements.
Implementing the Export strategy
Export strategy includes the business plan which can also be a snapshot called the Business Model Canvas. The space the firm desires in the export determines what the strategy would be. The business strategy for raw material export greatly differs from agro-commodity. Service export also requires a different approach.
This strategy may involve added value or adaptation to modify a product to fit the needs and tastes of buyers/users. In a target market with many competitors, the exporter needs to adapt their products/services to gain competitive advantages. For example, Google’s official language is English, however because of our diverse culture and language in Nigeria, Google has Yoruba, Hausa and Ibo interpretation and content on their search engine. This is a competitive strength against other search engines.
Whatever the type of export strategy to be adopted, bear in mind that it must be well articulated as a document that can be reviewed from time to time.
Export is a career that requires in-depth approach. It is a sustainable and scalable venture once one decides to acquire the necessary skills and resources.
Content provided by
Maidville Consulting Ltd, a trade support for domestic and export markets. The firm has carved a niche in the Agri-Business sector specifically for SMEs. Their services include: training, seminars, trade fairs, exhibition, buyers’ meet and study tour. Detoun Abbi-Olaniyan is the Founder of Maidville Consulting Ltd. Website: www.maidvilleconsulting.com