Is your Company Export Ready?
Determining whether you are ready to enter the international business arena requires both an examination of your commitment in terms of resources as well as your ability to compete with international competition. There are a few relatively simple exercises you can do to determine if your firm is export ready. These do not require a large commitment of time or resources, but are worthwhile exercises.
Determining whether you are ready to enter the international business arena requires both an examination of your commitment in terms of resources, as well as your ability to compete with international competition.
Evaluating your Export Potential
There are a few relatively simple exercises you can do to determine if your firm is export ready. These do not require a large commitment of time or resources and are worthwhile exercises.
The first exercise is the SWOT Analysis. This acronym stands for Strengths, Weaknesses, Opportunities and Threats.
Analyzing your strengths and weaknesses requires you to have a hard look at what your company does and does not do well. This not only highlights the strengths you can use to give you a competitive advantage in the international market(s) you choose to enter, but can also highlight the changes or improvements you can make to your business to limit or eliminate your weaknesses.
Opportunities and threats are external forces to your company that may influence its performance or public perception. For example, government legislation could open potential opportunities for your business, but may also be a threat if the politics in the region are unstable. Threats can also include competitors entering the same market or residents of the country mistrusting North American products.
After determining your organization’s own strengths and weaknesses, it is necessary to evaluate your future competition in the new market. Knowing your own value proposition as well as your competitors can lead to a successful market entry. Entering in a highly competitive market with seasoned competitors who have deep pockets and high levels of customer loyalty can result in failure; even if you have a superior product. As a new entrant to an unfamiliar market, a competitor’s strengths and weaknesses should be identified and understood.
Developing your competitor analysis requires a significant amount of market research, using both primary and secondary sources. When conducting your research it is important that you go beyond just strengths and weaknesses. Your research must also identify;
- how they manage/ make decisions;
- who the key personnel are and what their drivers are; what the company’s overall objective is for both their business and their individual products;
- how satisfied they are with their present position in the market;
- the changes they are likely to make in that position and how you can threaten it;
- where they currently conduct business and if there are any known expansion plans; and
- their history of giving and receiving investments.
Benchmarking or competency analysis is an evaluation process designed to determine your own company’s capabilities against competitors. The analysis evaluates marketing, finance, manufacturing, and organizational functionalities to determine a weak or strong position against your competitors.
After completing a competitor analysis, SWOT analysis, and benchmarking, the next steps are to develop a market entry strategy and a market plan.
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