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Is your business ready to export?
Is your business
ready to export?
There are a few critical factors that
will affect the export readiness of
your business. Each is explained along
with some questions which you could
answer in order to get an indication
of your enterprise's export readiness.
1. Management's
commitment to exports
Exporting requires quite a bit of
your time, especially in the early
stages of market development. If you
have a small staff that is already
thinly stretched in handling your
local business, it will be difficult
for you to take on a new and serious
commitment of exporting.
- Are you able to commit a substantial
amount of time to developing an
international market in the initial
stages?
Yes _ No _
- Are you convinced that exports
are an important aspect of your
future survival?
Yes _ No _
- Do you have a long-term view
on developing your export market,
meaning that, even if it took
time before you succeeded in winning
your first order, would you still
remain committed to exporting?
Yes _ No _
- Are you prepared to rearrange
the way your business operates,
should it be required, to become
internationally competitive?
Yes _ No _
2. Management
skills in international business
There are differences between
doing international and domestic
business. These differences lie
in the methods of developing international
markets, processing export orders,
ensuring payment and dealing with
all the risks involved. You will
therefore need specific skills to
do business in this way.
- Do you have any experience,
or have access to available expertise,
in selling products to other countries?
Yes _ No _
- Do you have any experience,
or have access to available expertise,
in processing export orders?
Yes _ No _
- Do you have any understanding
of the export procedure and knowledge
of the various role-players involved
in the process?
Yes _ No _
3. Financial
resources
The commitment to export will
require additional finances, over
and above the financial requirements
needed to service your local market.
If you are currently struggling with
cash flow in order to keep your domestic
operation going, you may have trouble
finding the resources needed to start
exporting. Your business may have
to accommodate a time lag between
when you start promoting your products
abroad, and finally achieving your
first order. You might even have to
do the first few orders at very little
or no profit.
- Do you have (or have access
to) adequate financial resources
over and above your local needs
to support an export market development
programme? (International market
development is often more costly
than in the domestic market.)
Yes _ No _
- Can you afford to fund you export
market development for at least
12 months without receiving returns?
Yes _ No _
- Can you afford to invest in
adapting your product or packaging
if required?
Yes _ No _
4. Technical
know-how
International competition
means competitors' products measuring
up against one another, resulting
in a constant striving to improve
functionality, design and efficiency
in order to keep existing or to
win new market share.
- Does your business or do you
have access to the technical expertise
required to ensure that your product
is suited to international markets
in terms of design, quality and
function?
Yes _ No _
- Does your business undertake
research and development to improve
your product?
Yes _ No _
- Are you familiar with the attributes
of the products of potential international
competitors?
Yes _ No _
5. Capacity
to supply / manufacture
Enterprises should take care
in developing new markets if they
do not have the capacity to supply
the needs they create. Common problems
include offering products to buyers
who are likely to place orders far
larger than the enterprise can ever
supply or where enterprises export
excess capacity in times of a poor
economic climate at home, but then
have to sacrifice their export markets
once the local economy picks up again.
The cost and commitment required to
develop an export market is too high
to give up just because you have run
out of capacity.
- Do you have spare capacity to
produce over and above your domestic
market needs?
Yes _ No _
- Can you increase your capacity
to produce at short notice and
without any major capital investment?
Yes _ No _
6. International
marketing intelligence and know-how
The desire to develop an
export market usually results from
some form of intelligence being
obtained by the enterprise, giving
it reason to believe that there
is an international market for its
product, and that it has a chance
to compete. This knowledge is vital
in selecting markets and initiating
the market development process.
- Do you have any current knowledge
of international competitors,
their products or prices?
Yes _ No _
- Do you have information on the
size of the world market for your
product?
Yes _ No _
- Do you have any knowledge of
potential buyers for your product?
Yes _ No _
FOR EVERY "YES",
GIVE YOURSELF 1 POINT
AND FOR EVERY "NO",
GIVE YOURSELF 0.
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| TOTAL UP YOUR SCORES FOR EACH
SECTION AND MULTIPLY THE SCORE
BY THE WEIGHTING FACTOR. |
| MANAGEMENT COMMITMENT X 4
= |
| MANAGEMENT SKILLS X 1 = |
| FINANCIAL RESOURCES X 4 = |
| TECHNICAL KNOW-HOW X 3 = |
| CAPACITY TO SUPPLY X 3 = |
| MARKETING INTELLIGENCE X 1
= |
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TOTAL
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If your total is less than 35,
your organisation is probably not
ready for exporting. You should
then focus attention on those areas
in which you had low scores.
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