jueves, 24 de marzo de 2011

Why export? What motivates it?

The important of internationalization of a brand or company has proved to be worth it in all the cases and could be the difference between live or die in the market. Internazionalitacion could be understood as the process of selling a product or service in an international market or foreign country. The world is changing, the customer receive information everyday and trends change as fast as you can change your clothes, due to those facts companies should maintain constant search for new markets in order to survive.

During this chapter of the international marketing, we can see and analyze the importance of export, what motivates the company to do it, the export process and many strategies that companies applied in their export process.

There are many motivations that makes a company wants to export or start an internationalization process but in order to be successful in this there are some aspects required, such as the level of commitment from the senior management and all the staff involve. Otherwise this process won’t have the results expected by the company. In the other hand, it’s also important to make a market research; this to make sure company is targeting the right market in the new environment and to find out if the competitors are already serving this market and how it’s done, this to draw the right strategies to conquer this goal.

One of the reasons why companies decide to internationalize or export their goods or services are the need to respond to this globalize world, where every company should start thinking how they can grow sustainably in a more saturated national market or how to be more competitive facing international competition in local market. Due to those reasons and more, we find in the reading, two types of reason to internationalize; these are proactive and reactive reasons.

The proactive reasons represent the stimulus for strategic changing but contrary to these, are the   reactive reasons, which influence the company to respond environmental changes and adjust them by changing their activities.

The main proactive reason for entering an international market is mainly the profit advantage, this means the constantly quest for more incomes but this time looking into other markets. Second is the capacity to produce unique goods, in this sense the company could have a substantial added value to provide to the customer but in this globalize world , where the technology flows so fast, this advantage couldn’t be so long. The exclusive information is another proactive stimulus, this includes information about foreign customers, markets or market opportunities that other companies have not see. This particularly stimulus can be create by the international research made by the company. There are other stimulus such as managerial impulse where the desire, impetus and enthusiasms of the high managers impulse the international process; the taxes benefits and the search of scale economies.

The reactive stimulus, which are important to analyze them but is a stimulus where no company should use to increase competitive or act in this international process.  Many companies react due to the competitive pressure made by other companies in the industry. In this case, the fear of losing part of the share of the market by other company that has being benefit from the international market and the scale of economy make the company react. Another stimulus is the overproduction, in this stimulus companies see the international market as a solution to sell the production that is in stock but most of the time this strategy is only made for the short term, facing the possibility that next time international buyers won’t buy the good because they are looking for long term business relationships. The last stimulus goes by the hand with the next one that is the decrease of domestic’s sales and how the companies see the foreign market as the short term solution for that situation and not a strategic decision. The overcapacity and the proximity to clients and ports are the other stimulus that makes companies starts an internationalization process.

During the export process, the company faces many changes, in order to make does changes something or somebody has to start it. The intervention of this person or thing is call exchange agent. These agents are divided in two groups internal and external. The first one refers to the well formed management which discovers the high value that international markets have and decide to explore them. Also in the internal exchange agents, we can find the second level of exchange agents, where the new managements or new workers influence in the decision to invest in conquer new international markets. On the other hand an internal event such as decreasing of sales could lead to the quest of new markets.
From external exchange agents, we can notice how the arrival of international industries to our home market leads to a substantial increase in the interest of a company to start an international process. Also commerce chambers, governmental agencies and other institutions can make companies start those processes by giving them important information about new opportunities in foreign market. Those agents play an important roll in all internationalizations process that any company would like to start because they provide firsthand information about new markets and show the companies how export benefits them.

When exporting a product or good, we have to know as much as possible about the product/service that we are trying to export, this because in reality not all the products are manage the same way or receive the same treatment during the different stages of production and then exports. A good example of this, is the packaging stage where differ depending on the type con handling the product will have, the characteristics it contain, the specifications of the customers and so on. Also the transportation cost may defer depending on the size or weight of the package, this will affect our cost and finally can make our export less profitable. 

In order to make a successful export process or internationalization process, it’s important to take into account the different stages this should take, beginning with the market intelligence or market exploration and ends up with the adaptation of our product to that new market. In the other hand, it is important to analyze and understand the destination countries, culture, markets, competitors and exportation knowledge to can get a successful process.

As a conclusion, we can observe begin and how the different factors inside or outside the company affect in different ways the behavior of a company in the market. It’s also important to remind the important role of a good market research will make the way to success easier for the company or will make them go through the path of failure. 



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