Developing An Export Strategy for Small And Medium Size
Enterprises.

Exporting can be a really exciting experience for every business and if performed professionally, can reap massive rewards and potential
growth. With globalization and the speedy development in communication technology, we are open to unlimited resources and
considerable opportunities that were not available to us a few years or decades ago.

These opportunities can take many companies to the next growth level and profitability peaks as we can easily step up our export marketing with the powerful export tools available at our disposal.

But before we go any further, it is important to give a concise and simple explanation of what is an export strategy? An export strategy is
the decision taken to assess a product or service potential in a foreign market through a value planning process and approach to exporting the product or service.

In our existing market settings, exporting is a major mechanism to grow businesses as it offers new markets, a huge spread of customer base, and better profitability. Comparing growth rates, the international market outpaces the domestic market as many companies experience a growth rate of between 20% – 30% annually as they engage in exporting their products and services in the global market. Local competition turns to deteriorate as companies who export enjoy economies of scale with a lower cost of production which gives an upper advantage both home and abroad.

However, all these may sound rosy and easy but export success can be achieved by understanding the international trade environment producing good products to be sold at reasonable prices, being able to determine if you are really ready to export, setting an organizational
structure that can fully optimize both staffs and cooperate performances and having an in-depth knowledge of the export rules and regulations in each of the targeted markets. Lack of these capabilities is preparing to fail in the global market.

Success in exporting comes with, commitment and planning which will guide you with the right strategies to put in place in other to achieve
your export goals and objectives. The commitment must be from the company, the staffs superseding the export department while planning gives you the roadmap to follow and the available options you can take advantage of as you prepare to export, the policies and resources which may include capital and the level of professionalism used to achieve your goals and objectives.

A committed company, with well-strategized planning, full of professionalism, will guarantee success and sustainability in the international market. A more casual approach may achieve your company’s’ short term goals but will lead to distress, possible financial losses, and frustration in the long run.

However, a sustainable export strategy must be able to cover real costs, ensures the payments of the goods and services before exporting and the ability to obtaining a justifiable return on investment or funds employed. Companies are likely to waste their resources if they fail to set up the right strategies geared towards guaranteed success in the global market.

Besides, companies seeking global markets must be able to familiarize and align company policies with export rules and regulations, understand the ever-changing needs of the market, the export pricing requirements, securing the right partnerships in the market, highly flexible and an ability to adapt, without forgetting a full understanding of the markets cultural values.

Developing An Export Strategy

In other to develop a fully fleshed export strategy, we will have to cover numerous export variables from looking in the mirror and answering specific questions which will determine the success of your export venture, planning and right to the point of securing an IP protection right which will be analyzed in the subsequent paragraphs.

To begin with, you need to answer the most important question of why do you want to export? It is very crucial to determine the reasons
behind your export ambitions. Are you exporting for diversification purposes? For growth? To improve turnover? Seeking new markets? To
extend the life cycle of your products? Only a clear answer can guide you towards a clear strategy to follow. Failure to determine the
motivating factor for exporting will only portray a lack of focus.

Are you already successful?

What is your product success in its own origin or local market? An already successful product in its local market provides a good chance
for the product to be successful in the foreign markets with the similar existing product in use. It is important to note that markets that differ significantly according to the local market conditions may offer limited or no opportunities for exporting. These differences can be seen in factors like social, environmental or cultural differences, the availability of suitable alternatives, low bargaining power, government regulations and other factors that can come to play.

Market Research

An in-depth market research aligned with your objective or WHY? is very important. Understanding or getting to know the market properly
will justify your “why?”. Inadequate market research will only emphasize lack of preparation and a high way to failure. You will have to study the global statistics for your industry and identify the demand and from which areas are they coming from? Talk with your embassy in
those markets for more information about the market.

Explore these markets by yourself probably through trade shows and witness the presence of competition. Look into the legal and tax issues of your industry in the new market. Are there any restrictions and can you meet the legal requirements in this market?

Most importantly, you will have to tell yourself the truth. After a thorough market research, you must have encountered some
strengths, opportunities, and weaknesses. Now is time to answer the question are you ready for the challenge? Is the market worthy of your business? Did you manage to identify potentials in the market that will satisfy your major objectives? If the obstacles outweigh the potentials, then be sure to ignore the market.

On the other hand, if you can address the risks and challenges involved in a remarkable way, then the
market is worth venturing.

Decide on your plan of Action

How aggressive do you want to enter the market? You will have to decide where you want to focus your attention in a bid to achieve your
objectives for the market. From this stage, it is possible to determine your competitive advantage in the market and focus all your resources
on achieving your objectives for exporting in the specific market.

Have you the right sales and marketing strategies?

Identifying the customers and the market is one thing but engaging with the right sales and marketing strategies is a whole other game
that is completely different from your local market. Are you very familiar with the market culture? Are you flexible and ready to change
your product presentation in the new market? Have you allocated the right team to handle export activities? Besides, have you a clear picture of what your sales and profitability will look like? And above all have you plan how your products or services will be delivered? Are your terms of trade well designed to meet your needs? Are you ready to serve beyond local expectations? Eliminating delivery delays and providing documentation on time?

Have you secured the right partnerships?

Have you carefully selected your partners to take over most of the challenges you might face in the market? Have you considered a local
agent or distributor with full knowledge of the market? Are you considering getting help or created the right acquaintance with other
institutions and organizations ready to provide you with the right information? Institutions like the chambers of commerce in that
market, embassies, and other related departments of trade?

What are your payment plans?

Many businesses fail globally because they fail to guard themselves against bad debts and non-payments. It is very important to double-check with your partners and make sure they can keep to their words especially when it comes to payment of bills and invoices. It is always
important to always negotiate a payment plan that will protect your cash flow. Always received your payments before shipping overseas
and put in place alternative plans to re-sell if a customer fails to comply with the trade agreement. Always have in place a comprehensive sales contract and be 100% clear with the payment terms.

And lastly, have you a plan to cover yourself from common risks?

This is in case you will need to consider a credit insurance protection for non-payment, the risks of exchange rate going against your favor, and insuring your goods for any unforeseen circumstances during transit. Can you secure an intellectual property right for your products
in the market to prevent counterfeiting?

Providing answers to the above questions can confirm the existing market potentials which will indicate if exporting is a viable option or
not to export. This is also essential to provide a clear focus and direction for the exporting company and its ability to export its goods
or services. Also, the information gathered can help in planning a successful export strategy for the company.

The Approaches to Export your goods and services overseas.

In developing an Export Strategy, the method derived or used greatly affects the export plan and how it will be designed. The methodology
will need to reflect the strategies and policies that are required in order to achieve the company’s export objectives. There are mainly two
methods or approaches to export which can be distinguished from the company’s level of commitment and involvement in the exporting
process. This includes Indirect and Direct Exporting.

Direct Exporting

Through Direct Exporting, a supplying company takes the total engagement of the movement of its products from the origin to the various overseas markets. The company handles the market research, the export plan, every export negotiations, freight forwarding, and insurance. With exporting directly, the exporting company sets up its own distribution network and agents in every market of interest. Exporting directly requires a team of professionals with a significant level of devotion and commitment.

Indirect Exporting;

This is exporting to overseas markets without active engagement with all the complexities and risks involved in Direct Exporting. This is considered exporting passively and without any direct involvement in the whole exportation process. Indirect Exporting minimizes the overall risk for the exporting company and the associated cost involved in exporting directly.

Exporting indirectly can be performed in different ways;

• Supplying goods to local export agents, merchants, or resellers. It is the place of the local purchaser to take upon itself the exporting
  decision and even without the knowledge of the supplier.
• Supplying the products to local buyers with foreign customers. The domestic buyer may have control of some potential foreign
  markets and will pay a better price for the products.
• Selling to a selected intermediaries and export trading companies. The supplying company sells to an intermediary company with the
  ability to locate new foreign markets and buyers for the supplying company’s products. They work with a network of foreign distributors and agents.

To develop your exporting strategy, it is very important to consider your motives and reason to export. This will enable you to have a clear
vision and focus. With a clear vision and focus, it will be very easy for your company to identify any shortcomings and can be able to address them in line with the objectives and purpose of the company’s exporting requirements. It is very important to understand exporting requires a lot of commitment and time to grow your business globally with the spread of new markets and across borders.