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Management Issues Involved in the Export Decision

Is your company's management committed to pursue exporting operations? Make sure you've answered the following questions.

Management Objectives
What are the company's reasons for pursuing export markets? Are they solid o !ectives "e.g.# increasing sales volume or developing a roader# more sta le customer ase$ or are they frivolous "e.g.# the owner wants an excuse to travel$? %ow committed is top management to an export effort? Is exporting viewed as a quick fix for a slump in domestic sales? Will the company neglect its export customers if domestic sales pick up? What are management's expectations for the export effort? %ow quickly does management expect export operations to ecome self&sustaining? What level of return on investment is expected from the export program?

With what countries has usiness already een conducted# or from what countries have inquiries already een received? Which product lines are mentioned most often? Are any domestic customers uying the product for sale or shipment overseas? If so# to what countries? Is the trend of sales and inquiries up or down? Who are the main domestic and foreign competitors? What general and specific lessons have een learned from past export attempts or experiences?

Management and Personnel

What in&house international expertise does the firm have "international sales experience# language capa ilities# etc.$? Who will e responsi le for the export department's organi'ation and staff? %ow much senior management time "a$ should e allocated and " $ could e allocated? What organi'ational structure is required to ensure that export sales are adequately serviced? Who will follow through after the planning is done?

Production Capacity
%ow is the present capacity eing used? Will filling export orders hurt domestic sales? What will e the cost of additional production? Are there fluctuations in the annual workload? When? Why? What minimum order quantity is required to make a shipment worthwhile? What would e required to design and package products specifically for export?

Financial Capacity
What amount of capital can e committed to export production and marketing? What level of export department operating costs can e supported? %ow are the initial expenses of export efforts to e allocated? What other new development plans are in the works that may compete with export plans? (y what date must an export effort pay for itself?

Approaches to Exporting

Direct Exporting
In this approach# the exporter handles every aspect of the exporting process from market research to foreign distri ution and collections. A significant commitment of management time and attention is required# ut this approach can maximi'e profits and sales growth. Most )irect *xporters take advantage of one or more sales and distri ution channels in a given market y forming in&country usiness partnerships with agents# distri utors and+or !oint venture partners. ,o learn a out services designed to match -... companies with uyers and+or usiness partners# see the /0artners and ,rade 1eads2 section

Exporting Indirectly

hrough Intermediaries

With this approach# a company engages the services of an *xport Management 3ompany "*M3$# an *xport ,rading 3ompany "*,3$ or other intermediary capa le of finding foreign markets and uyers for its products. ,he exporter retains considera le control ut gets access to well&esta lished expertise and trade contacts.

o Find Potential EMCs and E Cs!

4ffice of *xport ,rading 3ompany Affairs & 0romotes the formation and use of export trade intermediaries and development of !oint export ventures y -... firms. My* & 5ind *M3s and *,3s speciali'ing in your industry through this online directory.

Indirect Exporting
Indirect exporting refers to strategies where y a -... manufacturer or service provider seeks out domestic uyers who represent foreign end users or customers. Many -... and foreign corporations# general contractors# foreign trading companies# foreign government agencies# foreign distri utors and retailers# and others in the -nited .tates purchase -... products and services for direct export# or as a supplement to products+services they offer to foreign customers. In this case a company may know its product is eing exported# ut it is still the domestic uyer who assumes the risk and handles the details