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Management Issues Involved in the Export Decision

Is your company's management committed to pursue exporting operations? Make sure you've

answered the following questions.

Management Objectives

What are the company's reasons for pursuing export markets? Are they solido!ectives "e.g.# increasing sales volume or developing a roader# more stale

customer ase$ or are they frivolous "e.g.# the owner wants an excuse to travel$?

%ow committed is top management to an export effort? Is exporting viewed as a

quick fix for a slump in domestic sales? Will the company neglect its export

customers if domestic sales pick up?

What are management's expectations for the export effort? %ow quickly does

management expect export operations to ecome self&sustaining? What level of

return on investment is expected from the export program?

Experience

With what countries has usiness already een conducted# or from what countries

have inquiries already een received? Which product lines are mentioned most

often?

Are any domestic customers uying the product for sale or shipment overseas? If

so# to what countries? Is the trend of sales and inquiries up or down?

Who are the main domestic and foreign competitors? What general and specific

lessons have een learned from past export attempts or experiences?

Management and Personnel

What in&house international expertise does the firm have "international sales

experience# language capailities# etc.$? Who will e responsile for the export

department's organiation and staff?

%ow much senior management time "a$ should e allocated and "$ could e

allocated?

What organiational structure is required to ensure that export sales are

adequately serviced?

Who will follow through after the planning is done?

Production Capacity

%ow is the present capacity eing used? Will filling export orders hurt domestic

sales?

What will e the cost of additional production?

Are there fluctuations in the annual workload? When? Why?

What minimum order quantity is required to make a shipment worthwhile?

What would e required to design and package products specifically for export?

Financial Capacity

What amount of capital can e committed to export production and marketing?

What level of export department operating costs can e supported? %ow are the

initial expenses of export efforts to e allocated?

What other new development plans are in the works that may compete with export

plans?

(y what date must an export effort pay for itself?

Approaches to Exporting

8/13/2019 Management Issues Involved in the Export Decision

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Direct Exporting

In this approach# the exporter handles every aspect of the exporting process from market

research to foreign distriution and collections. A significant commitment of management time

and attention is required# ut this approach can maximie profits and sales growth.

Most )irect *xporters take advantage of one or more sales and distriution channels in a given

market y forming in&country usiness partnershipswith agents# distriutors and+or !oint

venture partners.

,o learn aout services designed to match -.. companies with uyers and+or usiness

partners# see the /0artners and ,rade 1eads2 section

Exporting Indirectly hrough Intermediaries

With this approach# a company engages the services of an *xport Management 3ompany

"*M3$# an *xport ,rading 3ompany "*,3$or other intermediary capale of finding foreign

markets and uyers for its products. ,he exporter retains considerale control ut gets access

to well&estalished expertise and trade contacts.

o Find Potential EMCs and ECs!

4ffice of *xport ,rading 3ompany Affairs& 0romotes the formation and use of export trade

intermediaries and development of!oint export venturesy -.. firms.

My*xports.gov& 5ind *M3s and *,3s specialiing in your industry through this online directory.

Indirect Exporting

Indirect exporting refers to strategies wherey a -.. manufacturer or service provider seeks

out domestic uyers who represent foreign end users or customers.

Many -.. and foreign corporations# general contractors# foreign trading companies# foreign

government agencies# foreign distriutors and retailers# and others in the -nited tates

purchase -.. products and services for direct export# or as a supplement to products+services

they offer to foreign customers. In this case a company may know its product is eing

exported# ut it is still the domestic uyer who assumes the risk and handles the details

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