Any company, before committing its resources to venture in the export business, must carefully assess the advantages and disadvantages of exporting into a new market.
While some companies enter the export business unintentionally after receiving an order to purchase from a foreign buyer that found their product, others make a deliberate move and conduct thorough research before entering a new market. Reasons for your company to consider exporting are quite compelling.
Here are ten major advantages of exporting:
Increased sales and profits
Selling goods and services into a new market boosts sales and increases revenues. Additional foreign sales over the long term, once export development costs have been covered, increase overall profitability.
Enhance competitiveness
Most companies become competitive in the domestic market before they venture into the international arena. Being competitive in the domestic market helps companies to acquire some strategies that can help them in the international arena.
Gain global market share
By going international, companies will participate in the global market and gain a piece of this huge international marketplace.
Diversification
The opportunity of selling to multiple markets allows companies to diversify their business and spread their risk. Companies will not be tied to changes in the business cycle of their domestic market or of one specific country.
Lower per unit costs
Capturing an additional foreign market will usually expand production to meet foreign demand. Increased production can often lower per unit costs and lead to greater use of existing capacities.
Compensate for seasonal demands
Companies whose products or services are only used domestically during certain seasons may be able to sell their products or services in foreign markets during different seasons.
Create potential for company expansion
Companies who venture into the exporting business usually have to have a presence or representation in the foreign market. This might require new work premises and additional personnel and thus lead to expansion.
Sell excess production capacity
Companies who have excess production, for whatever reason, can probably sell their products into a foreign market without being forced to give deep discounts or even dispose of their excess production.
Gain new knowledge and experience
Going international can yield valuable ideas and information about new technologies, new marketing techniques and foreign competitors. The gains can help a company`s domestic as well as foreign businesses.
Expand life-cycle of product
Many products go through various cycles, namely introduction, growth, maturity and finally the declining stage which is the end of their usefulness in a specific market. Once the product reaches maturity in a given market, the same product can be introduced to a different market where the product has never previously been marketed.
If you would like to discuss how we can support your organisation to expand overseas, please contact us here or speak to Shelley or Stuart on +44 (0)121 214 6204.