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 objectives (e.g., increasing sales volume or developing a broader, more stable customer base) or are they frivolous (e.g., the owner wants an excuse to travel)?
  • How 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? How quickly does management expect export operations to become self-sustaining? What level of return on investment is expected from the export program?

Experience

  • With what countries has business already been conducted, or from what countries have inquiries already been received? Which product lines are mentioned most often?
  • Are any domestic customers buying 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 been learned from past export attempts or experiences?

Management and Personnel

  • What in-house international expertise does the firm have (international sales experience, language capabilities, etc.)? Who will be responsible for the export department's organization and staff?
  • How much senior management time (a) should be allocated and (b) could be allocated?
  • What organizational structure is required to ensure that export sales are adequately serviced?
  • Who will follow through after the planning is done?

Production Capacity

  • How is the present capacity being used? Will filling export orders hurt domestic sales?
  • What will be 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 be required to design and package products specifically for export?

Financial Capacity

  • What amount of capital can be committed to export production and marketing?
  • What level of export department operating costs can be supported? How are the initial expenses of export efforts to be allocated?
  • What other new development plans are in the works that may compete with export plans?
  • By what date must an export effort pay for itself?

Go Back to Develop Your Export Plan