Advantages and disadvantages of exporting Dhaka Footwear shoes in

Uzbekistan:

Any company, before committing its resources to venture in the export business, must carefully
assess the advantages and disadvantages of exporting into a new market. While some companies
enter the export business unintentionally after receiving order to purchase from foreign buyer
that found their product. Others make a deliberate move and conduct thorough research before
entering new market. Whether it is unintentional or deliberate move companies need to evaluate
and carefully assess the advantages and challenges of exporting before committing resources.

The reason for Dhaka Footwear Ltd. to consider exporting is quite compelling; the following are
few of the major advantages of exporting:

 First and fore mostly, Bangladesh has the competitive advantage of having cheap labor
cheap labor, good leather quality, huge supply of raw materials, and preserve efficiency
in our climate by immediate processing through- salting, spinning, blading. Furthermore,
the sewing quality is good, there is huge demand for upper and supporting accessories
(pin, solution, eva, ribbon, stickers, aylot) are cheap in Bangladesh. In short, Bangladesh
has got the resources, that too at a lower price.
 Increased sales and profits. Selling their shoes in the Uzbek market the company never
had before boost sales and increases revenues. Additional foreign sales over the long
term, once export development costs have been covered, increase overall profitability.
 Enhance Domestic Competitiveness. Most companies become competitive in the
domestic market before they venture in the international arena. Being competitive in the
domestic market helps companies to acquire some strategies that can help them in the
international arena.
 Diversification. Selling to multiple markets allows Dhaka Footwear ltd. to diversify their
business and spread their risk. They will then no longer be tied to the changes of the
business cycle of domestic market or of one specific country.
 Lower Per Unit Costs. Capturing an additional foreign market will usually expand
production to meet foreign demand. Increased production can often lower per unit costs
 and lead to greater use of existing capacities, which has been the case for Dhaka
Footwear already.
 Create Potential for Company Expansion. Companies who venture into the exporting
business usually have to have a presence or representation in the foreign market. This
might require additional personnel and thus lead to expansion. Therefore, Dhaka
Footwear Ltd. will have great opportunities for expansion.
 Sell Excess Production Capacity. When and if Dhaka Footwear Ltd. over produce for any
reason they can probably sell their products in the Uzbek market and not be forced to
give deep discounts or even dispose of their excess production.
 Gain New Knowledge and Experience. Going international can yield valuable ideas and
information about new technologies, new marketing techniques and foreign competitors.
The gains can help a Dhaka Footwear Ltd’s domestic as well as foreign businesses in the
future.
 Expand Life Cycle of Dhaka Footwear Ltd’s products. Many products go through various
cycles namely introduction, growth, maturity and declining stage that is the end of their
usefulness in a specific market. Once the product reaches the final stage, maturity in a
given market, the same product can be introduced in a different market where the product
was never marketed before. For example, a specific design of Dhaka Footwear Ltd’s
shoes may go out of fashion in Bangladesh, yet it may remain in style in Uzbekistan, or
sometimes the choices may simply differ.

While the advantages of exporting by far outweigh the disadvantages, small and medium size
enterprises especially face some challenges when venturing in the international marketplace.
Some of the disadvantages of Dhaka Footwear Ltd when exporting to Uzbekistan are:

 Product Modification. When exporting, Dhaka Footwear Ltd. needs to modify their
products (make different sized shoes to fit the Uzbek customer) to meet The Uzbek
country safety and security codes, and other import restrictions. At a minimum,
modification is often necessary to satisfy Uzbekistan’s labeling or packaging
requirements.
 Market Information. Finding information on foreign markets is unquestionably more
difficult and time-consuming than finding information and analyzing domestic markets.
In less developed countries, as in this case Uzbekistan, reliable information on business
practices, market characteristics, cultural barriers are quite difficult to avail.