GETTING READY TO EXPOR ASSESSING YOUR EXPORT READINESS While there are exceptions to every rule, export veterans and trade specialists know that certain factors make the preparation to international markets easier, faster and less risky.
To test your â€œexport-abilityâ€?,
answer the following questions and then check your score:
1. Is your product or service already available? (Select A, B or C)
A. Currently in production ___ B. At the prototype stage ___ C. At the idea stage only ___
2. Is your product or service current selling in your domestic market?
A. Currently selling, and market share is growing ___ B. Currently selling, but market share is low ___ C. Currently selling, but in only one city ___
3. Do you have the surplus production capacity or available specialists to meet increased demand for your product or service? Yes___ No___
4. Do you have the financing required to adapt your product or service to suit your target market and to promote it?
A. Financing is in place ___ B. Financing is being arranged ___ C. No financing is available ___
ABOUT YOUR FIRM
5. Is management committed to sustaining your export effort? Yes___
6. Does your firm have a good track record of meeting deadlines? Yes___ No___ 7. Does management have experience in export markets? Yes___ No___
GUIDE TO EXPORTING Having determined that you are export-ready (through the Exporter-Readiness Diagnostic considerations), the next step is to begin your export planning.
The Export Plan and Key Elements
Market Research Methods
Four Ps of the Marketing Plan: Promotion
Initiating and Managing Customer Relations
Glossary of Trade Terms
Export Plan Template and Reviewing the Business Plan
Four Ps of the Marketing Plan: Product
Four Ps of the Marketing Plan: Place
Guide to Making a Business Offer
Moving Your Products: Distribution and Export Logistics
GETTING READY TO EXPORT Back to menu |
EXPORT PLANNING When your company decides to look towards foreign markets for selling your product(s) you need to make an Export Plan. The Export Plan is basically a Business Plan with an international market focus
(specifically, the target market(s) you have selected). The Exporter Plan describes the company’s target market(s) in detail, clarifies your export goals, activities and objectives, and determines the resources necessary to achieve your anticipated positive results.
It is essential that you spend the time and effort needed to plan your efforts in an organized, efficient and straight forward way. Not only is it vital for your company in terms of providing a working guideline for your efforts but it is also a principle way of communicating your company’s strengths and goals to important contacts en route to and within the target market. Indeed, many key decision makers, from financial officers to importers, will be reviewing and evaluating your Export Plan as you proceed to the get your goods to market.
As we move on to reviewing the Exporter Plan in more detail, it is important at this time to note that even as you proceed to plan toward the export market, it is vital not to do so at the peril of your domestic/ existing markets. In other words, as you plan to export to new markets, continue to maintain and manage the market(s) that have led you to this point of success.
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In summary, Export Plans are developed in order to: Define the target market: the risks, demographics, demand, logistics, legal issues, commercial issues such as currency; Set a course and define a purpose for your business activities; Identify your company’s strengths, weaknesses, opportunities and threats; Identify financial an other resource demands of exporting; Substantiate qualification for obtaining credit/export financing For many companies, if there is no plan it is next to impossible to get any export financing.
Some key questions to ask yourself when creating your export plan: Customer profile: Who already uses your product/service?
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Product modification: Are they required? Transportation: How easy? Expensive? Local representation: Requires training, assembly, service? Exporting services: Unique, world-class? Delivery? Capacity: Can you serve domestic and foreign markets?
We turn now to some of the key elements of an Export Plan:
Key Elements of an Export Plan · · · · · o o o o · · · o · · · · · ·
Analysis of domestic market performance Export objectives and goals Market Research (leading to and including Target market(s)) Delivery of product/service Marketing Plan sales strategy pricing strategy promotional strategy distribution channels Sales forecasts - monthly, annually Production plan - ensuring enough capacity, machinery, raw materials, personnel Assessment of risk - what will competitors do? What are you contingency plans? What political or economic risks exist? Evaluation - how to judge if you are successful Financial forecast - will you make money? Do you have sufficient cash flow? How will you finance your exports? Bank? Equity? The plan is not static – be prepared for change
The full details of what your Export Plan should include are outlined in the Export Plan Template (next section available only if registered). Please note additional resources regarding making your Export Plan are available from various sources on-line and elsewhere. These include: ExportSource.ca - http://exportsource.ca/gol/exportsource/site.nsf/en/es01875.html Developing an Export Strategy - http://www.unzco.com/basicguide/c1.html Developing and Export Plan - http://strategy.sauder.ubc.ca/antweiler/baim500/exportplan.html
GETTING READY TO EXPORT EXPORT PLAN TEMPLATE As a key tool for export success an export plan needs to include clear set of directions to identify every step of the process. In this section you will find a suggested format for an export plan.
Table of Contents Executive Summary 1. Introduction 2. Organizational issues 3. Products and services 4. Export objectives and goals 5. Target market overview 6. Market entry strategies 7. Regulatory and logistical issues 8. Risk factors 9. Implementation plan 10. Financial plan
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1. Introduction The introduction provides the background for the export plan. It should summarize the history and rationale for introducing the company into a foreign market, as well as any required financing and conditions for accepting any investments, if that is applicable. This section could include the company’s: Domestic market performance Export objectives and goals Target markets Business history (all aspects: including sales, profits, etc.) Vision and mission statement Purpose of the export plan Organizational goals and objectives International market goals Short and medium-term objectives for exporting Location and facilities
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2. Organizational Issues Ownership of the company Organizational structure Management Staffing Level of commitment by senior management Relationship between exporting and other operations Corporate experience and expertise in exporting Strategic alliances Export Team – skills and experience Labour market issues
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3. Products and Services Description of products and services Key product features Other features (intellectual property, after sales, seasonality, shelf life and other life cycle issues, etc.) Adaptation and redesign required for exporting Production of products and services (including capacity issues, etc.) Future products and services (new product Research and Development, etc.) Comparative advantage in production/product (advantageous selling attributes, etc.)
4. Export Objectives and Goals Indicate what you expect to achieve by entering an export market within a certain time frame, say within one year and within five years for example. You may wish to target rates of export growth as percentage of overall sales (compare to domestic sales) and also to discuss the goals and objectives of exporting as they compare with those of the company in general.
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5. Target Market Overview Demonstrate what you have learned through your international market research. Describe the following: Market Research undertaken Economic environment (GDP, wealth, trade balance, etc.) Size of market Key market segments/demographics Political environment in the target market Legal Environment Purchase process and buying criteria (distribution and promotion channels: direct customers to end-users) Logistics (transportation and infrastructure issues) Description of industry participants/ industry profile Market share held by imports Tariff and non-tariff barriers (licenses, quotas, fees, documentation) Industry trends and other market factors (e.g. cultural, social, business practices) Market outlook (buyer analysis and projected demand for the product or service)
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6. Market entry strategies (based mainly on issues of the Marketing Plan) Identification of key target market segment(s) Description of key competitors Analysis of competitive position Product for export market (modifications, adaptations, etc.) Competitive advantage Seasonality and life span issues, design, styles, etc. Standards, quality controls, packaging, labelling, language issues Intellectual property considerations Pricing strategy Export Pricing/Costing, Current market pricing Market Constraints on price points for entry Promotion & Sales Strategy Trade events and missions In-market (Point of sale, in store, etc.) Advertising (media, etc.) Development of sales leads Terms of sale Placement/Distribution strategy Description of intermediaries and partners Strategic alliances (Cooperation, joint ventures, licensing, franchising etc.) if applicable After Sales servicing (returns, warranties, etc.)
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7. Regulatory and Logistical Issues Intellectual and property protection International legal and regulatory issues Other legal and regulatory issues Timelines (from production to delivery) Use of trade service providers: Intermediaries such as customs brokers and freight forwarders Modes of transportation (including special needs such as refrigeration, etc.) Cargo and related insurance Inventory control and warehousing Trade documentation (Customs, inspections, certification – origin, safety, health, packaging, etc.)
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8. Risk factors Market (Foreign and domestic) Economy, political, social situation Demand Product Standards/certification Commercial Partners, clients, credit Payment Issues: Contracts, Credit, Dispute Resolution Currency
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Internal Risks (your company stability, staffing, expertise, etc.) Political and other risks 9. Implementation Plan This includes the key activities to be taken to achieve the objectives, including: Roles of various parties Tasks to be undertaken and timing Monitoring of evaluation criteria and process (including the methods to be used to track and measure the company’s progress in the market). 10. Financial Plan Revenues or sources of funding Cost of sales Marketing and promotional costs Other expenses or expenditures Operating budget
Note: You may want to also include a cover page and Executive Summary (1 to 2 pages) to these main content items.
Review/Summary of the Business Plan Before you can develop an Export Plan you need a current and comprehensive Business Plan that reflects the domestic operations of your company. A Business Plan, created for the use and benefit of all who have a stake in the success of the company, is vital for many reasons including dealing with increased competition and declining market share, initiating progress in product development and clarifying strengths, weaknesses and objectives. It is therefore worthwhile to first summarize the key components of the Business Plan. Essentials of a Business Plan
Executive summary Business objectives / product or service / market and customers / the management team / and the financial situation
Company details History and status / background and industry / objectives (mission and vision)/ overall strategic approach / Mission and Vision / primary business sector / main products / core purpose/activities Strategic Plan - SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats
Products/services Product and services description and comparisons / innovative features (patent coverage) / applications / unique technology used / product or service development objectives / product /service introduction schedule and major milestones. Market (domestic and/or international) A market summary & overview / market analysis & forecasts / industry trends / products or services to be introduced / entry strategy. Competition and risk factors
Marketing program/plan Objectives, marketing strategy, sales and distribution channels, customers, and staffing
Management Founders / stock ownership / organization and personnel / future key employees / staffing and education Human resources Facilities
Quality Assurance Plan ISO certification? Other standards and related requirements?
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Financial data and forecasts Capital required and use of proceeds Current liabilities and assets Funding sources Balance Sheets and tax statements Assumptions used / a 3 year plan / a 5 year plan
Appendices References / product descriptions, sketches and photos / recent literature on product market, etc.
A key element of the Export Plan is market research. The next section discusses this vital step in your export ·
planning and the development of your overall foreign market strategy. Product and services description and comparisons / innovative features (patent coverage) / applications / unique technology used / product or service development objectives / product /service introduction schedule and major milestones. Product and services description and comparisons / innovative features (patent coverage) / applications / unique technology used / product or service development objectives / product /service introduction schedule and major milestones.