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Expansion
into international markets becomes a serious question for most growing
companies. In today's interconnected global economy, the question
of whether or not to export , demands thorough Market research and
focused International Marketing Strategy due to the substantial
risk and resources called for in expanding sales internationally. |
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SITUATIONS
IN WHICH WE RECOMMEND TO PURSUE EXPORT MARKETS |
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Demonstrated international demand for your products
• Higher international prices for your manufactured goods
• Moderate or slow domestic market growth with strong, unsaturated
or growing markets abroad
• Competitive pressures in your domestic market reducing prices
and margins
• Competitors leveraging their profitability in foreign markets
to increase their market share in your domestic market
• Relatively low labor or capital costs as compared with foreign
manufacturers
• Strategic needs: capital, technology, capacity, partners,
government assistance, etc.
• Intangible needs conforming with multi-cultural or internationally
oriented corporate culture |
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Exporting stabilizes a company's cyclical
changes in sales and profits by allowing the company to
sell to foreign markets in boom times while its home market
is in recession. |
A growing company's home market size
eventually limits sales and earnings. Where corporate strategy
or shareholder expectations demand continued revenue and
earnings growth, foreign export markets can respond by eventually
delivering additional customers. |
Companies with differentiated or low
priced goods perform very well in foreign markets. Differentiated
or "specialized" products can be sold for higher
prices abroad than domestically. Low priced goods and commodity
products (e.g., industrial parts) can easily undercut foreign
competitors' market share. In either case, higher margins
can result from exporting. |
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Export sales require market validation
through first-hand research of a target market's conditions and
how they affect the sale of your product. Whether you plan to export
directly or through an agent, preliminary marketing (i.e., business
discovery) and market research are essential to verify your products
exportability to a given foreign market. |
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