10 Key Elements to an International Export Strategy
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Many companies decide to go international but few put a detailed export strategy in place and hence often fail. Many companies will talk about the number markets where they sell their products/services but few will tell you whether they are profitable in those markets. Companies often assume that in time they will become profitable in foreign markets and that they just need to keep on pushing their product and as they managed to enter a market without a strategy, they believe that their “strategy” will see them through and ensure a good outcome. Unfortunately, internationalisation is not so simple and a strategy is key to long term growth.
An international export strategy refers to a plan of action developed by a company or organisation to expand its business operations into international markets and effectively sell its products or services overseas. It outlines the goals, methods, and steps required to enter and succeed in foreign markets while maximising the export potential and minimising potential risks.
A comprehensive international export strategy typically includes the following 10 components:
Market Research: Conducting research to identify potential target markets, assessing their demand for the product or service, analysing competition, understanding cultural factors, and evaluating regulatory requirements.
Market Selection: Carefully selecting the most suitable target markets based on the research findings, considering factors such as market size, growth potential, competition, and cultural fit.
Product Adaptation: Adapting the product or service to meet the specific needs and preferences of the target market, including modifications to packaging, labelling, branding, or functionality as required.
Pricing Strategy: Developing a pricing strategy that considers factors like production costs, transportation expenses, import taxes, local pricing norms, and market positioning to ensure competitiveness and profitability in the target market.
Distribution and Logistics: Establishing an efficient supply chain and distribution network to deliver products or services to international customers, considering factors such as transportation, warehousing, customs regulations, and fulfilment processes.
Marketing and Promotion: Creating an effective marketing and promotional plan tailored to the target market, utilising various channels such as advertising, public relations, digital marketing, and trade shows to raise awareness and generate demand.
Legal and Regulatory Compliance: Ensuring compliance with international trade regulations, export controls, intellectual property rights, licensing requirements, and any specific laws or regulations of the target markets.
Financial Planning: Assessing the financial implications of entering international markets, including costs associated with market entry, currency exchange, financing options, and evaluating potential returns on investment.
Risk Management: Identifying and addressing potential risks associated with international expansion, such as political instability, currency fluctuations, trade barriers, intellectual property theft, and developing contingency plans to mitigate these risks.
Monitoring and Evaluation: Establishing metrics and key performance indicators (KPIs) to measure the success of the international export strategy, monitoring progress, evaluating outcomes, and making necessary adjustments to optimise performance.
By developing and implementing a well-defined international export strategy, companies can enhance their competitiveness in global markets, access new customer bases, diversify revenue streams, and capitalise on international growth opportunities.
OpenVentures is an export advice company. We not only understand the challenges in new market entry but also understand the key elements that make a successful market entry. We offer services in market research and analysis, business development (including partner selection), international marketing, export advice (including trade finance).