Exporting is the ideal option for companies looking to increase sales, expand their presence in international markets or simply seek new opportunities beyond national borders. However, exporting is not for every company and there are steps to consider before launching into international trade:
1. Evaluate the company’s situation and capacity to export
The first step we must take to export is to carry out a self-assessment, which will help us determine how prepared we are to face the challenges of exporting; thus, we will be able to define a roadmap with the changes we must adopt, and the mistakes we must correct, so that the situation of the company is favourable for exporting. For this assessment we will consider the following areas:
- Structure: The company’s structure and operational capacity to meet the needs of the international market.
- Product: Evaluate whether the product is competitive, adaptable to other markets, environmentally friendly, etc.
- Marketing: The company’s communication strategy, the translation of its resources and documents, as well as its corporate image.
- Competition: Knowledge about our national and international competitors, their strategies and competitive advantages.
- Production and Processes: Internal logistics, speed of product delivery, after-sales service, among others.
- Economic and Financial Ratios: Important to take into account to determine if the company is economically prepared to face exportation.
- Technology: Sources of information, use of digital analytical tools, or even social networks.
- Entry barriers: Knowledge of the legislation of the target market, its commercial culture, technical regulations for export, etc.
- Networking: Contact with foreign suppliers, participation in trade fairs, prospecting trips…
The more we reflect on the issue, the more detailed the analysis we obtain will be. The conclusions we reach will allow us to identify our weaknesses and strengths in relation to internationalisation. Strengths will be those internal elements that favour exporting and that we must maintain and take advantage of; on the other hand, weaknesses represent obstacles that we must face and correct so that they do not become an impediment in our internationalisation process.
2. Selection of the export market
Once we have made our diagnosis, the next step is to identify the most suitable market or markets for our products or services, which is crucial for export success. One of the most useful resources is to assess our country’s previous experience as an exporter of a particular product to each potential destination country. Thus, we can consider the total exports of the product from our country to each market, the total value imported by the country in question and our corresponding share, the growth rate of exports in recent years, as well as the trade balance in relation to the selected product.
It is important to define which audience we want to target according to the type of product we offer. We will consider aspects such as GDP per capita to assess whether our product is compatible with the purchasing power of the country’s population, as well as the GDP growth rate; if it is positive it may mean that it is an expanding country with opportunities, while if it is negative, it may pose certain risks for us as exporters. In this field, it is also interesting to assess the unit price of the product in each market.
On the other hand, issues such as cultural distance or distance in kilometres will need to be taken into account in relation to our experience as exporters. Cultural distance refers to the difference between values, norms, beliefs or behaviours between cultures, which can influence commercial relations, and if we are not aware of these differences, it can lead to misunderstandings that can make us lose a potential customer. On the other hand, distance in kilometres is going to be key in logistics, and of course, there are operations between countries that can be simpler than operations between others, and therefore more enjoyable and affordable for amateur exporters.
3. Develop an Export Plan
Once we have assessed the situation of our company, we have adopted the relevant changes, and we have selected the countries to which we are going to direct our export strategy, we must draw up the Export Plan.
At this point in the process, the company must determine which distribution channels it will use in the destination country, whether distributors, wholesalers, retailers or digital platforms.
It is time to adapt communication and promotion to the characteristics of our target market. It is not enough to simply translate our message; it has to be done with the target audience in mind.
In addition, it is necessary to ensure that our company and products comply with the legal requirements of each country, such as health and technical regulations, labelling and packaging regulations, or the management of tariffs and taxes, among others.
CONCLUSIONS
Exporting is an excellent opportunity for growth, but it requires organised and careful planning. If a company correctly evaluates its position, corrects and improves the aspects that may be an obstacle, makes an intelligent selection of markets, and draws up a structured and appropriate export plan, it will make the leap into international trade with guarantees of success.
Exportest offers you a complete questionnaire from which you will develop a diagnosis of your company’s situation according to each area, with advice to facilitate the process, as well as identifying your strengths and weaknesses. You will also benefit from a market selector that will identify the most interesting markets to which you can direct your proposal; you can contract Exportest through this link.
Exportest has been developed by Oftex, an internationalisation consultancy with more than 20 years’ experience. Visit our website to find out about the rest of our services.
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