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Samenvatting 'Export a practical guide'
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Complete summary of the book 'Export, a practical guide' gebruikt bij het vak Exportmanagement at the HAN Nijmegen, second year, commercial economics
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SAMENVATTING EXPORT: A PRACTICAL GUIDEHOOFDSTUK 1 PREPARING FOR EXPORT
Governments have 3 major export objectives:
1) General strategy: to improve the competitive position of the domestic (=
binnenlands) business world with regard to foreign companies
2) Trade policy: to lift as many barriers as possible to foreign trade
3) Export policy: to stimulate domestic companies to do business abroad
The government uses the following instruments to stimulate export / international trade:
Trade policy (international agreements). Most countries do the majority of trade with
countries in the same trade block (bijv. EU)
Government subsidies
Export-credit insurance against political risks and damages (bijv. Atradius)
Contacts with foreign governments
Information and promotion (trade fairs, exhibitions)
Free trade is when a government has no restrictions (like paying duties) on trade with
producers from other countries. Price is determined by supply and demand. When a
country wants to protect its market against foreign countries, trade is not free but
influenced by government measures. 2 important reasons for protection are
(un)employment issues and wanting to avoid dumping (overproduction).
Governments can implement protection in 3 ways:
1) Import duty: a form of tax raised on the import of an article so that foreign articles
are more expensive
2) Import restrictions: the number of imports is restricted. The limit is set either on
quantity or on total number. If imports exceed this quota, a higher amount of duty is
raised on the extra items
3) Non-tariff restrictions: non-financial measures, divided in 3 groups: custom,
hygienic and technical restrictions
A passive exporter someone who doesn’t think through exporting, someone who for
example once in a while sends off an order abroad. An active exporter is truly focused on
keeping exports going. He has a solid export business plan, founded on market research,
and export is one of the main strategic objectives. A company that does international
marketing familiarizes itself with the foreign market and adapts the elements of its
marketing mix to satisfy the needs of the customers abroad. An international
entrepreneur is focused intensely on the foreign market.
Possible incidents that lead to passive export are:
An unexpected request from abroad
Noticing a local demand for a unique product when you’re on holiday
Friends or family living abroad point out export opportunities
Meeting an importer at a trade fair
Active export is based on strategic considerations such as:
Being less dependent on local market demands, spreading risks better
Economies of scale
Increases commercial opportunities
Following an important customer onto the international market
Keeps staff employed
Successful product at home may have potential in a foreign market
A product that’s at the end of the PLC at home may be exploitable in a foreign
market
An export plan is based on an internal, external and SWOT analysis and contains a
planning with objectives, a strategy and an action plan for the coming year(s).
Pagina 1 van 17
,Interns can give starting exporters a way of trying out export ideas without having to
commit to permanent employment.
HOOFDSTUK 2 INTERNAL ANALYSIS
Strengths of your company are the knowledge, skills and means that fit the needs and
wants of present and potential customers and which competitors do not have or not as
strongly as you do. Strengths allow you to exploit opportunities and avoid threats. (Column
++ in a checklist)
Weaknesses are deficiencies (= gebreken) knowledge, skills and means. (Column - - in a
checklist)
Internal analysis gives you insight into the opportunities and limitations for export for your
company.
Not every weakness will negatively influence export activities nor will a strength
necessarily be of positive influence. For example, if a company has excellent road transport
facilities, this won’t necessarily benefit customers overseas because they require other
forms of transportation.
HOOFDSTUK 3 EXTERNAL ANALYSIS
For most countries, the majority of trade is done with countries in the same trade block.
The initial selection criteria of a typical exporter for choosing an export country are:
It is nearby, allowing him to manage it himself
It has a culture basically similar to the export country so there are no unpleasant
surprises, or
It holds opportunities that may lead to expanding export to all corners of the world.
For choosing a country to export to, an exporter could, should or need to:
Make a choice together with people in the field, who know the local market
Check out where the competition is exporting
Make a list of priorities, based on potential profit, expected turnover and estimated
risk. These priorities form the basis of the selection criteria.
After the first selection of promising countries, an exporter begins to narrow it down. The
selection criteria of this phase should be concrete and should meet the following
requirements:
Quantifiable: expressed in numbers or money, measurable
Relevant: delivers useful information
Discriminating: makes it possible to distinguish good from bad
An exporter has to conduct market research (desk research or field research) on for
example local politics, culture and competitors in order to figure out what export country to
enter first. Best is to eliminate the worst contender (= mededinger, land wat op de lijst
staat) first and work your way up the list. Field research can be hard to do yourself if your
export country is far away. In that case, ask your competition, use the local KvK, FeNedEx
and EVD.
Your target market consists of people who need or desire the product and are willing to pay
a fair price for it. Market selection can be divided into 2 phases:
1) Macro-economic criteria. General economic information. This forms the base of
the meso-economic criteria. Consists of economic structure, politico-legal structure,
demographic aspects, socio-cultural factors and technological level. After this phase
an exporter can already filter out the countries with the lowest total scores.
CHECKLIST : PAGINA 37-39
2) Meso-economic criteria. Highly detailed data that comes from facts about the
market or the industrial sector. Consists of potential buyers analysis, competitive
analyses, product, price, distribution, communication and a few other aspects.
CHECKLIST : PAGINA 40-41
Working through a completed external analysis, now the major opportunities and
threats can be described. Solutions to possible threats are not needed during this phase!!
Pagina 2 van 17
, HOOFDSTUK 4 CONSOLIDATING CONCLUSIONS
SWOT stands for Strengths, Weaknesses, Opportunities and Threats:
Strengths are the knowledge, skills and means that fit the wants and needs of
present and potential customers and which competitors either don’t or have not as
strongly as you do. With strengths you can generate higher market share and
profits. They are used to exploit opportunities and avoid threats.
Weaknesses are deficiencies in knowledge, skills and means.
Opportunities are favourable situations or factors in the business environment
that you anticipate will improve your market position or share.
Threats are the unfavourable situations or factors in the business environment that
you anticipate will diminish (= verminderen) your market position or share.
In a SWOT matrix, strengths and weaknesses
stand opposite opportunities and threats. It’s best
to limit to about 6 elements on both sides of the
grid per export market.
The next phase is to cross match the
opportunities and threats with the strengths and
weaknesses per export market in a
confrontation matrix (zie afbeelding hiernaast).
The objective is to see how far the organisation is
adapted to the export market and to discover
where the real challenges and obstacles are.
SMART stands for Specific, Measurable, Acceptable, Realistic and Timed: conditions that
are used to define objectives (= doelen). The difference between an objective and a goal is
that an objective is expressed quantitatively (= met getallen), a goal is expressed
qualitatively (= zonder getallen).
Specific Can only be explained in one way
Measurabl Use numbers to indicate the direction of
e objectives and evaluate progress
Acceptable There should be a platform acceptable to
all stakeholders
Realistic Ambitious but attainable (= haalbaar)
Timed The timeframe within which objectives
should be reached
To calculate expected turnover (= verwachte omzet) all resources (personnel, materials,
services, production capacity, warehousing etc.) need to be considered. You can use, for
example, data based on the number of present and potential customers and the average
amount they (will) spend with you. By subtracting the costs from the expected turnover
you get a picture of the expected profit (= verwachte winst) per export market.
With the help of the turnover and cost prognosis you can determine whether the short-
term export plans are commercially interesting and whether the objectives you had in mind
will be indeed realized through export.
HOOFDSTUK 5 ENTERING THE MARKET
There are two ways of entering the market: direct export (negotiating with your
customers directly) and indirect export (through a third party).
Using your own sales representatives has obvious benefits since in-house staff will be
totally familiar with the characteristics of your product / service. For someone to be able to
sell abroad, they need to have good social and communication skills, a high degree of
cultural awareness and fluency in the relevant languages.
Sending staff overseas means having a high cost of travel, accommodation and other
elements (hiring an interpreter). Local sales staff needs to be trained (on your expense) so
they represent your company well.
Pagina 3 van 17
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