Developing a sound export strategy helps you define your export aims and match your resources to those aims. Your export strategy will help you manage the market sectors you have identified as core business. Focusing your resources enables you to provide quality responses and service to your new export customers.
Your strategy should be backed by a sound export business plan which will not only shape a clear path to your strategy, it will also help when dealing with bankers, financers, joint ventures or government agencies.
Many companies began exporting by responding to an order and haphazardly developing as they went through trial and error without a clear plan, coming across many pitfalls on the way.
Export business, however, requires a lot of focus and clear direction to make the right choices as you go. Reactive exporters may quickly give up on selling to international customers, concluding prematurely that it’s not worth the effort or that it’s easier to serve customers closer to home even if that means the business may not grow. Doing the hard initial work of deciding how you want to develop and grow your international sales increases your chances that the best options will be chosen, resources will be used wisely, and execution will lead to a successful result.
BUILDING AND EXPORT BUSINESS PLAN
The export business plan can and should be kept simple. At first it need be only a few pages long because important market data and planning elements may not yet be available. The initial planning effort itself gradually generates more information and insight. As you learn more about exporting and your company’s competitive position, the export plan will become more detailed and complete. Your plan should be a flexible management tool, not as a static document. You should not hesitate to modify the plan and make it more specific as you learn along the way.
Export Plan Resource – Materials
The US International Trade Administration Export.gov offers a very well done video series including “My Export Plan”
Austrade offers a useful Export Business Plan Template
A crucial first step in planning is to develop broad consensus among key management personnel on the company’s goals, objectives, capabilities, and constraints.
The purposes of the export plan are:
- To assemble facts, constraints, and goals
- To create an action statement that takes all of those elements into account
The plan includes specific objectives, sets forth time schedules for implementation, and marks milestones so that the degree of success can be measured and can motivate personnel.
Key issues to address in the plan:
- Choice of product and modifications required
- Target Markets
- Customer profiles
- Marketing and distribution channels used to reach customers
- Special challenges in each market (e.g. competition, cultural differences, import controls) and strategies to address these
- Determining the export sales price be determined
- Personnel and company resources to be dedicated to exporting
- Production capacity required
- The cost in time and money
- Carrying initial costs and managing working capital requirements
- Return on investment expected
- Senior management requirements
- Time frame for implementing each element of the plan
- Evaluation and modification of the plan