Business strategies for going global

Businesses which aspire to gain ground in the global market need to follow a logical and planned approach to export development. In the real world, a business rarely follows a straight-path approach, neither there is a mathematical theory of success to excel in export business operations. But research have shown that there are some key factors for export success, such as management and company commitment to export, some lasting competitive strength for the company and internal capabilities to support exporting.

To export or not to exportExport
development is a process and not an event. Most businesses fail to understand this. It is commonly recognized that a business needs a product or services which is in demand in overseas markets. But the fact that businesses need proper skills, resources, commitment and information to support sustained exporting activities over the longer term is often overlooked. Neglecting factors such as these can be a critical exporting barrier for small and medium-sized businesses. To benefit from export market opportunities, a business needs to make a sustained commitment in resources: effort, money and time. Before rushing out to export, a business needs to find out the right reason to export and test its export readiness. Checking readinessYou have been successful in the domestic market and are now looking to export to overseas market. Naturally you very excited. But are you ready? There are a number of questions you will need to consider in terms of assessing market opportunities and your

business' internal capabilities -
It will take more time, money and resources to establish your business in an overseas market than in a domestic one.
You will need to invest time and money before they see any return. You should have a long-range view.
As an exporter, you should be equipped with different skills such as finance, technical, marketing, administration and market experience.
You need to research the target market. It is also important to establish co-operative long term relationships with local partners.
Are your products ready for export? Have you analyzed your product's (or service’s) competitiveness? What are the advantages of your (or services) over other products already available in he target market in terms of quality, price and uniqueness ? Make sure that your product is ready for export. Research why the product will attract sales in the destination market. Also analysis whether your company has the capacity to tailor it to the requirements of the target market? Accessing capabilityAnother key test in determining your export capability is to analysis why your business is successful at the domestic level, what are your competitive advantages, and how these competitive advantages could help you in grabbing success in the international market as well. Try to draw a realistic picture of your business' strengths (factors such as uniqueness of product, competitive capabilities of your company or any other factor which is important to make your business competitive at international level) and weaknesses (such as lack of experience, lack of stuff or technology, inability to change product or packaging, lack of knowledge in marketing, etc.). It will help you to identify some fundamental success factors from both the customer and competitor perspective.
Considering trade barriers
The risks in exports are totally different from those encountered domestically, and they are unavoidable to some extent. But you can minimize them taking proper precautions. Find here some useful information regarding different export business risks-1. Political risk: The country where your client is located may experience major political instability. Such instability could result in defaults on payments, confiscation of property, exchange transfer blockages, etc.2. Legal risk: At domestic level, business are subject to a myriad of laws, regulations, restrictions. But internationally, there are much more complexities. International transactions are governed by unilateral measures, bilateral relationships, multilateral and regional agreements. This difference in law may have impact in such areas as taxation, currency dealings, property rights, employment practices, etc. 3. Credit related risk: While doing business internationally, trading can seem complicated and risky. Besides political, legal and other risks, the most common problem businesses face is the risk in the transaction. To overcome payment related risks, an exporter needs good understanding of different payment methods in international trade. Choose a payment method which provides you with some security. Try to avoid open account method, at least initially. 4. Internet frauds: Like in any other place, the Internet is not free from scammers and frauds. These people are are very cunning and being smart it is not enough to protect yourself from them. It is not only individuals who are targets for a variety of illegal schemes but also small as well as large business organizations.5. Quarantine compliance: Many countries (especially the European countries) have strict quarantine requirements to prevent the spread of contagious disease. Before sending a shipment, ensure that your products are allowed to be exported to the destination country. Besides the above mentioned risks, there may be some tariff barriers which exporters often have to face. For example, many governments impose high import taxes on certain products to discourages a foreign company's market entry and to provides some competitive edge to the local providers.

PRIYA KUSHWAHA
PGDM-3rd sem