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A beginners guide to export strategy

Release Date

17 March 2014

To pull together a comprehensive and detailed trade export strategy you have to start somewhere – a simple strategy around:
 
(a) Why would I want to trade? And 
 
(b) Where would or should I trade? 
 
Simple enough questions so here are some simple answers!
 
A. So why would I want to export to another country? 
In simple terms you first need to understand where your business is at and where your product may be in terms of its lifecycle. For example is it a mature product in the local market and you need to look for new countries to sell it in - or is it a product that is the latest in technology and you need to get it out, across the world asap!?. Or is it just as simple as there are increasing risk factors in your local market around matters such as currency devaluation and you don’t want to keep all of your ‘eggs in one basket’. The answer to all of the above is maybe it is time to get some global exposure for your business – so if that’s the case then what next?
 
B. So, where should I trade? This is a big question as there are over 190 countries in the world with numerous trading blocks and trading agreements – but before you get into the nitty gritty of a detailed strategy let’s look at how to approach this question.
 
Firstly – start with your own market – what countries have similarities to your own country and what countries are trade friendly with your own country. Make a list and then ask, are there agreements in place and is there a strong trading history between countries. By using these similarities research can generally be easier to undertake when looking at competitors and regulations in the potential ‘new market’ you could be looking to move into.
 
Anything else to consider? Yes, now that you have a list of countries the next step as a business is to try and understand what you want to know about these international markets. To do this you need to develop a framework on how to research these ‘new markets’ assisting you in creating a more detailed shortlist of countries.
 
So what would this framework look like?
Pretty simple – Again look at your own business first – think about what skills you have in your own company that might be relevant – language skills? – sales skills? Then draw up a small graph and place all of the variants at the top of each column that you would need to look at in each country you are considering. These variants might include – language – travel time – suitability of product – the type of promotion required – variations on products / service required for the new country. Then on the graph use a numbering system against each variant with a difficulty level for each country and at the end of the exercise simply add up the numbers and get a mark for each country. 
 
Don’t forget to look back at your own skill set and see if they match up well with some of the potential new markets.  
 
At the end of this you will have a number allocated to each country providing an indication of the level of difficulty that might be required for market entry. 
 
Now that you have a more select list of countries you can then move to the next step – research!
 
Your focus should be on matters such as national population, regulations, how these countries operate, what competitors are there and can you compete effectively? Ask how do people market themselves in these countries, what is their business etiquette and will all of your marketing need to be realigned to suit cultural factors. Ask yourself - will it cost a lot to promote yourself in Country A over Country B?

For example does Country A have requirements around what language you must use when selling a product whilst Country B does not – a this point you can start to weigh up some costs factors.
 
You should now be at a stage that you have decided either (a) yes or no I want to embark on international trade and (b) if yes to (a) made a shortlist of what countries you would like to focus on.   
 
From there you should consider looking at talking to an expert in the market you are seriously considering entering. People who have the knowledge and experience in answering some of the questions you may have when doing your research and can then assist in establishing cost effective and target international marketing plans and set you up with trusted partners already in those markets. 
 
One more point often asked – when do you stop researching the markets you are about to enter? The answer is never – always regularly review your market – go to trade shows, keep on top of economic data and keep asking yourself the same questions you originally asked when first entering that chosen market.
Once you have made the above decision you then start to get into the real detail behind a trade strategy and that’s when you should consider bringing in the experts!

About the Author:


John Carvin, Business Manager, Australian Business Consulting & Solutions
 
Originally a lawyer in Australia and the UK, he saw the light and after running his own successful business for the last 6 years he has joined ABCS working across all areas of our group.  
 

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