Develop International Markets

Growing a business in the 21st century presents a brave new world of opportunities. More than 25 percent of small- and medium-sized companies are currently attracting sales revenues from international trade. The global economy is fueled by new trade agreements, new markets, and new technologies that have profoundly restructured the ways in which companies view business expansion. Yet a decision to export must still follow an intense period of study and planning. Fortunately, there are many resources that can assist entrepreneurs in assessing whether international markets are the right choice for the products and services of their particular company.

A first step in exploring foreign markets is usually an internal examination of your firm’s product quality, production and marketing capacity, and service performance. Analyze your company’s objectives for exporting and determine whether management and staff possess the experience and risk capacity for foreign trade. The next step is to evaluate your firm’s external activities in distribution, marketing and competitive positioning. Firms that are well managed and profitable in the domestic market usually perform better in the international market than those that attempt to export because their efforts in the U.S. are floundering. The decision to venture into international markets should be based on:

The advantages of exporting:

1. Larger market for your goods and services—94 percent of the world’s population is outside the U.S.
2. Longer product life for some products.
3. Ability to reduce seasonal fluctuation in demand.
4. Decreased dependence on domestic markets.
5. Overseas markets can provide fresh insight to your company, enhancing your position domestically.
6. Larger production runs may reduce fixed costs per item and enable companies to purchase materials at lower unit costs.

The disadvantages of exporting:

1. Possible long lead times from marketing efforts to actual sales.
2. High costs of entering export markets, including travel, trade shows and samples.
3. Foreign language labeling and point of sale materials may be required.
4. Risk of non-payment by the foreign buyer.
5. Requirements to meet overseas standards, certifications and inspections.
6. Possible need to reformulate product or packaging for overseas buyer.
7. Long lead times for shipping and delivery.
8. Shipping, insurance, financing, tariff and non-tariff barriers add costs for the overseas buyer, making it difficult to compete against local suppliers.
9. Local culture, customs and negotiations.

After an overview of your firm’s current assets and the general advantages and disadvantages of exporting, you should begin contacting the international trade experts who can advise you on potential foreign markets for your products

Source: http://rriyanto.blogspot.com/2007/09/how-to-develop-international-markets_03.html