Export And Import Strategies 13 1 Exports Imports

Export And Import Strategies 13 -1

Exports & Imports • Exporting refers to the sale of goods or services produced by a company based in one country to customers that reside in a different country • Importing is the purchase of goods or services by a company based in one country from sellers that reside in another 13 -2

Advantages of Exporting • Lower investment way to enter foreign markets • Lower risk way to enter foreign markets • Expands sales • Achieves scale economies • Diversifies sales 13 -3

Characteristics of Exporters • The probability of a company’s becoming an exporter increases with company size, but the extent of exporting does not directly correlate with size • Companies export to increase sales revenues, use excess capacity, and diversify markets 13 -4

Pitfalls of Exporting • Companies new to exporting (and also some experienced exporters) often make many mistakes • One way to avoid mistakes is to develop a comprehensive export strategy that includes an analysis of the company’s resources as well as its export potential • Companies can also improve the odds of export success by working with an experienced export intermediary 13 -5

Designing an Export Strategy • As a company establishes its export business plan, it must: – assess export potential – obtain expert counseling – select a country or countries where it will focus its exports – formulate its strategy – determine how to get its goods to market 13 -6