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HOW TO START EXPORT:
EXPORT READINESS AND POTENTIALITIES
Presented by
Rahim Jabbar
January 2010
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HOW TO START EXPORT
Points of Discussion (1)Export: Extension to the International MarketChallenges in Playing in the International MarketMajor Criteria for Export Readiness
How to become competitiveEntrepreneurial spiritQuality products
General Overviewof Exporting ProceduresThe First Would-Be-Exporters Task: Selecting theMost Potential PMC (Product-Market Combination)
Finding Information on The International MarketThrough Research
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HOW TO START EXPORT
Points
ofDiscuss
ion (2)
Finding Information on The International MarketThrough Research
Determine what you need to know
Decide on the research techniquesPlan your research activitiesCollect relevant dataAnalyze the data collectedTransforminformation intelligence
General Entry Strategies Into the International Mark
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PRODUCT XIn the domestic
market
PRODUCT XIn the global
market
Entry strategy
What are itsstrengths?
weaknesses?
+ + +/ - - -
How canProduct Xbe made
successful?* * */ ! ! !
What are the
opportunities &challenges in the
international market
*Changes*Alternatives*Allocation of resources*Well planned program*Step-by-step*Flexible*Adaptive
What are the competitiveadvantages ofProduct Xin the domestic market?
What should be the
competitiveadvantages ofProduct X in theglobal market?
EXPORT : EXTENSION TO THE INTERNATIONALMARKET
Copyright Rahim Jabbar/2010
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CHALLENGES IN PLAYING IN THE
INTERNATIONAL MARKETChallenges of distances high cost of transport
shipping and insurance
Diverse languages, customs, traditions and national laws
Currencies, weights and measures, marketing practicesRisks and uncertainties
Customs procedures and formalities
Exchange control
Rates and payment ofimport dutiesComplicated distribution channel: multiple chain of
middlemen.
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Are you competitive enough? Do you have the right product? Are you willing to adapt your way of doing
business? Do you have enough number of competent people?
Do you have adequate financial resources? Will you be able to cope with increased demand? Are you ready to embrace opportunities tofind andwork with prospective trading partners in theinternational marketplace (Be assured that , they
will be willingly to support you through win-wincommercial arrangement!) Do you have realistic expectations?
MAJOR CRITERIA FOR EXPORT READINESS
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Possess a strong entrepreneurial spirit Be the first
Be the best Be different Be the customers choice in the exportmarket
Be open
HOW TO BECOME COMPETITIVE?
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ENTREPRENEURIAL PROCESS DIAGRAM
1.Motivationto make adifference
3.Spotting &
exploitingopportunities
Overcoming
obstacles
4.Findingrequiredresources
5.Usingnetworkextensively
6.Showing
determinationin the face ofadversity
7.
Managingrisks
GROWING
ENTERPRISE
THAT SUCCEEDS
8.Controllingthe business
9.Putting thecustomers first
2.CREATIVITY & INNOVATION
10.Financial,social,aestheticcapital
Recognitionof value
Source: Bolton & Thomson, Entrepreneurial, Talent , Temperament, Techniques, Butterworth Heinemann, 2000
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DO YOU HAVE A QUALITY PRODUCT?
Does your product performwell? Does it serve what it issupposed to do?
Is your product reliable?Is your product durable (long lasting)
Does your product have special features (attractivedifferentiation)Does your product conform to the quality standard ofthe target market?
Is your product serviceable? (ifits is non-consumer
product)Does your product look attractive? Is it aesthetic enough?Will the target customer have a good perception on yourproduct?
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Country of
Destination (COD)
Country of
Origin (COO)
TRADE POLICIES
Market regulations
Customs procedures
Import duties
Exporting lawsExporting procedures
Market Access Requirements
International Money Flows
EXPORTING: PROCEDURES, MARKET ACCESS REQUIREMENTSTRANSPORTATION AND FLOWS OF MONEY
*
*Packaging
*** **
*****Unpacking into
individual unit
LAND
TRANSPORT
LAND
TRANSPORT****
****Customs (COD)Foreign exchange regulations
Payment procedures
Foreign exchange regulations
Banking procedures
**
**Transshipment
SEA/
AIR
\TRANSPORT
Inter-modal transporation
***Customs
(COO)
***
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THE WOULD-BE-EXPORTERS FIRST TASK ISENSURING THE MOST POTENTIAL
PRODUCT-MARKET COMBINATION
EXPORTPRODUCT
EXPORTMARKET
EXPORTER
What are required of the product by themarket?
Which one is the most potential market ?
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(1) Determine what you need to know
(2) Decide on the research technique
(3)Plan your research activities
(4)Collect relevant data
(5) Analyze the data collected
(6) Transforminformation intelligence ( as a basis for planning
activities)
HOW TO OBTAIN INFORMATION ON
EXPORT MARKET THROUGH RESEARCH
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(1) DETERMINE WHAT YOU NEED TO KNOW
RESEARCH AT THE MARKET ANALYSIS STAGE
(1) Target Market (what country COD)
Market size (volume and value)
General condition (the country, culture, economy,
industrial market, consumer, market trend)
(2) Market Access Requirements
(3) Trade Flows (Import/Export)
(4) Market structure (supply chains, price elasticity, etc.)
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RESEARCH AT THE MARKET ANALYSIS STAGE
(5) Market trends and growth patterns
(6) Segmentation segment to be targeted
(7) Competitors
(8) Buyers/Customers/Consumers
(1) DETERMINE WHAT YOU NEED TO KNOW
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QUESTIONS THAT MUST BE ANSWERED DURING THE
STAGE OF FORMULATING MARKET ENTRY STRATEGY
Product andpositioning
Price
Distribution channels
Target buyers/customers/consumers
Promotional activitise
(1) DETERMINE WHAT YOU NEED TO KNOW
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QUESTIONS TO BE ANSWERED FOR ANALYSING
FEEDBACKS
Product sales (volume, value, share)Pricing levels (level of acceptability)
Distribution (where is it sold)
Buyers/customers (who/what kind of people that like your
product)
Promotional activities (howfar the level of awareness and
how are the target peoples cultural responses?)
(1) DETERMINE WHAT YOU NEED TO KNOW
(continued)
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(2) DECIDE ON THE RESEARCH TECHNIQUES
(1) DESK RESEARCH)
SOURCES:
CBI: http://www.cbi.nl (for EU market)
Bureau of Statistics
Chamber of Commerce
Trade Associations
Embassies
Banks
Information Centers Public libraries
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(2) THROUGH INTERNET
Data might have long time lags (two to three
years late) or you have to pay
(3) FIELD RESEARCH (much more expensive)
Plan the trip
Arrange for appointments
Select the most appropriate time
Prepare the list ofquestions
Focus the discussions on most relevant topics
(2) DECIDE ON THE RESEARCH TECHNIQUES(Continued)
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(3) PLAN THE RESEACH ACTIVITIES
DETERMINE CATEGORIES OF DATA PER COUNTRY
BY SUBJECTS
PLAN THE RESEACRH ACTIVITIES
BY COUNTRY
SUBJECT
SOURCES OF INFORMATION
WHEN/WHAT TIME
SUMMARY AND CONCLUSIONS
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(4) COLLECT RELEVANT DATA
WHAT TYPES OF INFORMATION THAT HAVE
BEEN OBTAINED AND EASY TO OBTAIN?
STARTING FROM WHAT COUNRTY?
Trade statistics
Market information
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(5) ANALYZE DATA INFORMATION
SELECT AND CROSS-CHECK THE DATA FOR
RELIABILITY AND DIRECT BENEFIT
Reliability who are the sources
Benefitswhat are your objectives , time coverage
of the data/information
Completeness
Comparability
Consistency Always refer back to your problems & objectives
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(6) TRANSFORM INFORMATION INTELIGENCE
FIND CAUSAL RELATIONSHIP AMONGST THE ISSUES
YOU FOUND TO MAKE A COMPELTE STORY
PREDICT WHAT MIGHT HAPPEN IN CERTAIN
CONDITIONS&SITUATIONS
SUMMARY OF RESEARCH RESULTS:
Reasons for doing the research
Research objectives
Methodology (how the research was conducted)
Major findings Consumers/customers, competitors, market trend,
opportunities and threats.
Attachments: (statistics, list of addresses, etc.)
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MANAGING RESEARCH ACTIVITIESFOR EXPORT MARKET
PREPARATION OF RESARCH AND SUPPORTING
BUDGET:
When will it start?
How long is the time required tofinalize it?
Research never stops! Changes happen at a very
high/accelerated speed
Howmuch is budget needed?
REQUESTING THE ASSIATNCE OF EXTERNAL PARTIES
Select what part you can do by yourselfor on your own
When is the help from a third party is needed?
Get to knowfor sure on how to get the help from a third
party.
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THREE OPTIONS TO ENTER THE GLOBAL/
INTERNATIONAL MARKET
Indirect
Export
Direct
Export
PRODU
CTION INTHE TARGETED
DESTINATION OF
COUNTRY (COD)
Three Options
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OPTIONS FOR INDIRECT EXPORT
IndirectExport
Export trader(collectors from local/
domestic producers)Trading houseRoving InternationalPrivate Trader
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DirectExport
Buyers in COD
Agents in CODDistributors in CODRepresentative in CODSister Company in COD
OPTIONS FOR DIRECT EXPORT
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Production inthe Country of
Destination (COD)
Assembling in COD
Contract Manufacturing
Licensing agreement
Franchising
Joint venture company
Strategic alliance
Local /domestic
production in COD
OPTIONS FOR PRODUCTION IN COD
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SUMMARY: STRATEGIC OPTIONS TO ENTERTHE INTERNATIONAL MARKET
Indirect
Export
Direct
Export
Production
In the Country of
Destination
Three Options of the Strategies
Export trader
Trading house
Roving International
Private Trader
Buyers in COD
Agents in COD
Distributors in COD
Representative in CODSister company in COD
Assembling
Contract manufacturing
Licensing agreement
Franchising
Joint-venture company
Strategic alliance
Local/domestic
production in COD
S T A G E W I S E