Export - International Expansion strategies

Corporate Level Strategies

Prepared By

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Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

International Expansion

Export

• Exporting is defined as

the sale of products and

services in foreign

countries that are

sourced or made in the

home country.

Export

• Exporting is an effective

entry strategy for

companies that are just

beginning to enter a

new foreign market.

Export

• It’s a low-cost, low-risk option compared to the other strategies. These same reasons make exporting a good strategy for small and midsize companies that can’t or won’t make significant financial investment in the international market.

Direct exporting

In direct exporting, the firm becomes directly involved in marketing its products in foreign markets, because the firm itself performs the export task (rather than delegating it to others).

Direct exportingTo implement a direct exporting strategy, the firm must have representation in the foreign markets. This can be achieved in a number of ways: – Sending international sales

representatives into the foreign market. – Selecting local representatives or agents

to prospect the market. – Using independent local distributors who

will buy the products to resell them in the local market.

– Creating a fully owned commercial subsidiary to have a greater control over foreign operations.

Indirect exporting

The market-entry technique that offers the lowest level of risk and the least market control is indirect export, in which products are carried abroad by others. The firm is not engaging in international marketing and no special activity is carried on within the firm; the sale is handled like domestic sales

Indirect exportingThere are several different methods of indirect exporting: – The simplest method is to deal

with foreign sales through the domestic sales organisation.

– A second form of indirect exporting is the use of international trading companies with local offices all over the world.

– A third form of indirect exporting is the export management company located in the same country as the producing firm and which plays the role of an export department.

ExampleThe mumbai based American Dry Fruits (ADF) which began selling a range of packaged foods liked Chutneys, Spices, Canned vegetables, ready to eat dals, etc under different brand names later moved to other countries with large Indian population.