Strategic Exporting and International Market Expansion

Strategic Exporting for Small and Medium Businesses

• Export Online: Small and Medium Businesses (SMBs), System Unibex, and Dun & Bradstreet.

Phases of International Market Entry

• Phase 1: Planning; Phase 2: Design; Phase 3: Development; Phase 4: Launch and Maintenance.

Motivations for Global Expansion

• General Motivations: Aggressive firms aiming to be more long-term and active in a large number of markets, willing to dedicate organizational resources to the management of foreign business.
• Proactive Motivations: Profit advantage, international sales, and unique products. Note: Profitability of international startups is often low due to high costs; there is a significant gap between perception and reality for those with no experience. Other factors include imponderable influence, competitive edge (leading to international success), research and development, and taxes.
• Foreign Sales Corporation (FSC): Firms with tax deferrals and awareness of violations of regulations.
• Reaction to Competition: Fear of losing the domestic market, fear of the domestic market becoming internationalized, and strategies for quick entry or quick withdrawal.

Operational Factors and Market Pressures

• Overproduction: Looking to sell the remaining stock; acting as a safety valve during an economic recession. Note: This can cause frustration in customers.
• Product Lifecycle: Success in other markets, level of need, and high-technology products.
• Excess Capacity: Equipment not fully used, fixed costs applied to domestic production, and market penetration strategies based on variable pricing (which may cause anti-dumping and over-taxation problems).
• Proximity to Consumers: Borders, extensions of domestic markets, and the European market.

Internal and External Export Triggers

• Proactive Approach: Service marketing and strategy-oriented; soliciting an international marketing order.
• Reactive Approach: Acting after receiving an unsolicited order.
• Internal Triggers: Enlightened management, new management, or significant internal events.
• External Triggers: Demand, other firms, distributors, banks, chambers of commerce, and export agents.

Evolutionary Stages of Exporting Firms

• Stage 1: Uninterested Firm: $5 million revenue, less than 111 employees, managed by the President; not exploring exporting.
• Stage 2: Partially Interested: $5 million revenue, 1 employee, average export of 222,222; managed by the President and Marketing Manager; uncertain about exporting in the future.
• Stage 3: Exploring Firm: $11 million revenue, 111 employees, 555,555 in exports; managed by the President; planning on exporting and exploring opportunities.
• Stage 4: Experimental Exporter: $5 million revenue, 111 employees, 755 in exports, 11 customers. Factors: Unique product and technological advances. Focus areas: Marketing and financial information.
• Stage 5: Experienced Small Exporter: $11 million revenue, 111 employees, $1.5 million in exports, 4 customers; managed by the President and Marketing Manager. Factors: Managerial urge.
• Stage 6: Experienced Larger Exporter: $55 million revenue, 111-255 employees, $6 million in exports, 14 customers. Factors: Competitive pressures and tax benefits.