Export Business Plan
Institution of Affiliation
Export business over the past few decades have been considered the major success of the developing the country’s economy across the globe arena. To some extent the practice of exporting goods and services have helped the business to grow and expand to meet the world standards of economy. Many businesses have been able to expand thus being involved in production of goods and services despite facing acute shortage of resources and raw materials that are being used in these industries about many countries of the world. Each country is endowed with some specific resources which are different from other countries of the world. At the same time some countries are considered to lack sufficient resources which are necessary to develop and improve overall performance of the economy. Therefore, the role of exporting business is to ensure that each country can attain required resources to grow their economy.
Many businesses across the world are working towards ensuring that there is introduction of new products goods and services which are available in the local market. This is mostly influenced by the growing size of the population with more purchasing power compared to other past decades. Once new products are introduced to already establish market will boost the activities of the countries and elevating the smaller markets which are struggling to establish themselves in international market from time to time. If the product introduced using the export process is more attractive to consumer consequentially will promote the role of an entrepreneur to participate in entire business and shaping the economy of the respective countries. However, to achieve the desired goals and objectives of the business the first crucial step will involve conducting effective marketing strategy that will help in identification the actual need of market (Gibbon & Ponte, 2005).
Some parts of the world have recorded shortage of important minerals and raw materials that they can use in their industries. However, it cannot be ignored that some are experiencing shortage of highly developed skills and knowledge that can be embraced in production of goods and services with low development of infrastructure systems. Once the exporting business is enrolled countries will be able to experience economic dev elopement thus improving the entire landscape of economic growth for their businesses and individual consumers will be highly considered. The impact of the business will be to ensure that consumers are able to benefit from all types of products and services in which they are experiencing shortage compared to other developed nations of the world. The destination of export may not have the ability to produce the products locally therefore, contributing to major success of the business (Westwood, 2012).
The business plan will tend to discuss in detail the global assessment of the products, effects of trade barriers for the products, identification, evaluation and selection of potential export management, pricing analysis of the product in selected foreign markets and a plan to mitigate risks involved in export business.
Global Assessment of the Product’s International Potential
Global assessment of the product in international market is crucial in determining the course of actions as desired by the main goals and objectives of the business. These helps the individual entrepreneur to determine the number of products that may be consumed market for making actual business estimates of the products that may be sold within any time. Effective assessment ought to draw results on the level of competition which may be experienced and the level of availability of the commodity in the market. The criteria being used should be precise and concise to land in the market which is already flooded with commodities which will reflect low profits being generated from the entire business in contrary to initial consideration. Demographic composition is very important. Low demographic development translates to limited market of the product while the vice-versa remains true (Gibbon & Ponte, 2005).
Cultural considerations are very important key factor when venturing into a new market with differentiates products compared to existing in the market. Some cultures across the world have developed negative taste and preference of some commodities in their market therefore, they must be considered when establishing certain commodities in the market. Therefore, the commodities must be in line with expected cultural consideration of the demographic composition to generate more revenue to the business. For instance, exporting pig products to highly Islamic regions will not viable business ideas as their culture is against consumption of pig meat and related products. Moreover, industrial indicator is important in determining the future possibilities of the business about expansion and thriving in long-run operations of the business. Industry with limited expansion in future may lead to business making severe losses in contrary to determined levels of profits which are expected from the entire business (Westwood, 2012).
Macroeconomic analyses of the business are desired to determine and outline the challenges and opportunities facing the business. These may include the government interference of the business in different countries and the role the government plays in ensuring the success or failure of the business at any time. The approach can only be achieved through conducting of market data to help the business differentiate in relation to already existing in the market. With adequate knowledge the export business will be able to enhance product differentiation mechanisms, providing trading specification and thus able to understand environmental conditions that influences the business both in long and short-term period of operation. The efforts to make global assessments more successful in most cases involve obtaining the information from relative department of trade and commerce of the government of the respective countries. With reliable information and details, one will be able to make business effective decisions that will help the business to be successful (United States, 2003).
Effects of Trade Barriers and Non-Trade Barriers for the Products
Trade barriers and non-trade barriers are general restrictions which are induced by the government in any country to govern the activities of the business that may be designed to be carried out at any time of the year or entire period of trading activities. Most of these restrictions work on the principle of controlling cost of commodities that are entering the country from individual businesses or corporate organizations. The barriers and non-barriers of trade may take different forms from one country to another which include import duties, export licenses, expected government standards, quotas and entire exercise of product labeling. Most of economists in the world have general denominator that trade barriers may increase or decrease the efficiency under which economic activities may occur. Furthermore, quota systems in trading activities are emphasized to control the rate of commodities in the local market more from one region compared to other parts of the world. The approaches moreover, have been used to protect the local industries established in individual country to thrive and generate desired revenue from their business (Westwood, 2012).
Individuals or companies willing to engage in exporting activities must be willing to apply for licenses from appropriate government. The role of applying for the licenses is giving the business legality of operating within the boundaries of the country with maximum respect to desired laws and regulations that govern the activities of exporting and importing of goods and services in that country. It should be noted that while not all items that may require licensing the expected standards of the government must be met without failure or favor for an investor to grant the permission to operate in the country. Major corporate organizations of world such as Bureau of Industry and Security are responsible for implementing and enforcing the Export Administration Regulations in regulating the exports of commercial items and products in major countries of the world while other governments are responsible for regulating the export business to the countries (United States, 2003).
Labeling of the products must be done in effective manner to differentiate the type of products which are being exported from one local market to international markets of the world. During the labeling exercise it should be realized that the products must indicate the country of origin with aim of controlling illegal and unregistered trade business that individuals may desire to engage into with aim of making abnormal profits. Labeling business must contain crucial information such as prescribed names, advisory statements, designed net weight or volume and comprehensive storage information of the products entering the country (Weiss, 2013).
Identification, Evaluation and Selection of Potential Export Management
The desired mechanisms of exporting the product may play considerable role in determining the success of the company. They are major strategic approaches which are used in controlling the foreign market and ensuring maximum satisfaction of consumers in the market. The business will therefore, adopt the method of finding overseas partners, agents and distributors of the commodities who will be paid after making significant sale of the products. The most paramount considerations will be ensuring maximum funding of the entire business with international consideration of markets and available resources to the company. Therefore, the appropriate channel will be determined about the size of the firm, resources available at time, previous experiences from export experts and the entire condition of the business in the overseas market (Weiss, 2013).
The major advantage of indirect method of exporting of products and goods for smaller organization in the world is that it provides mechanism of entering foreign market without much potential complexities and risks that surrounds direct exporting business. Intermediaries and management companies will be able to provide range of services with each firm working for the benefit of developing the company entire growth and development. The role of management company is to act as an independent producer of goods and products as it can solicit transactions of the business in a more simple and comprehensive manner (Gibbon & Ponte, 2005).
Pricing Analysis of the Products in Selected Foreign Market
As in the case of domestic market the pricing factor is considered as major factor in determining the level of revenues which is generated to the company after certain duration of trading period. As a company it must be able to evaluate the variables that may affect the price of the goods which are sold to potential consumers. Incorporation of fright handlers will be efficient in determining the movement of goods from their local market to international market to meet the demand of respective clients. They will be responsible for preparing shipping and custom document, obtaining permits and licenses and providing financial assistance to the company regarding credit collections and packing services. The role of insurance will be necessary for mitigating costs which may incur due to damaged goods or misplacement during loading and offloading activities (Deardorff, 2014).
The company will comprehensively use the third party logistic supply chain management that will be responsible for freight, custom and freight consolidation, distribution of the goods to potential customers, warehousing costs and order fulfillment from local markets. The approach will enable the business to establish international network and promote the knowledge involved in importing and business that may be established. With consideration of the approach the company will be required to devote more resources to the market to justify the impacts driven by high commission rates and managing costs (Bertani, 2008).
A Plan to Mitigate Risks
As an exporter one is prone to risks that may negatively affect the operation of the business in long-run determined period of operation in any country. These risks may include security concerns of desired destination, political instability, foreign exchange factors which agitate increased risk in commercial sector and unforeseen tariffs which may be applied at the boarder of each country. Political risks are contributing factor to default in payment, delay shipping and safety of the staffs working in the respective countries. Therefore, to mitigate the political risks will be necessary to check on political stability of the country and comprehensive trends in changing climate before making any form trading agreement. Moreover, the business will be focused on entering into trade agreements with countries with more political stability (Bertani, 2008).
The business will not further assume rules and regulations of the country regarding import procedure, employment terms and procedure, property rights, and the systems of taxations being practiced. These would go a long way in mitigating transactional and commercial risks that may affect the entire operations of the business. Moreover, the company will seek advice from respected legal practitioners from the country being involved in the business to ensure full compliance to rules and regulations (Deardorff, 2014).
Bertani, C. (2008). Advanced technologies and methodologies for risk management in the global transport of dangerous goods. Washington, DC: IOS Press.
Deardorff, A. V. (2014). Terms of trade: Glossary of international economics.
Gibbon, P., & Ponte, S. (2005). Trading down: Africa, value chains, and the global economy. Philadelphia: Temple University Press.
United States. (2003). International trade. Washington, DC: U.S. G.P.O., Supt. of Docs.
Weiss, K. D. (2013). Building an import / export business. Hoboken, NJ: Wiley.
Westwood, J. (2012). Building Your Business Through Export. London: Kogan Page.