Independent dimensions in which an individual enterprise can be summarized are given below:
1. Organizational Readiness to Export (ORE):
A number of factors internal to the organisation determine how well-equipped it is to engage in export transactions. These factors are listed here.
Manufacturing capacity:
There should be sufficient plant and equipment availability to supply the home market plus additional capacity to meet demands from abroad.
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Management and organisation:
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Exporting requires additional management time, especially in the early stages of market development. If your existing management structure is already thinly stretched by the domestic business, it will be difficult to take on the new commitments resulting from exporting. Similarly, the existing organisation may not be suitable for handling export sales.
Financial resources:
Marketing abroad requires additional working capital and capital for market investigations, promotion, product adaptation, and so on. It would be unwise to begin exporting if your company’s financial base is barely sufficient for your domestic business.
Technical knowledge:
An enterprise that has the technical workforce capable of product development and adaptation is likely to have a greater potential than one without such capabilities.
Marketing know-how:
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Although marketing expertise gained in the home market is not always directly applicable abroad, we find that enterprises with a substantial home market experience are better able to adapt to the requirements of export business.
Export experience:
An enterprise’s export performance to date and the lessons learned from successes or failures have a bearing on its export potential.
Management’s goals and priorities:
Management’s current plans for its domestic business, e.g. investment, product launches expansion of sales force have a direct relationship to its export potential. These require resources and management effort that may limit the enterprise’s ability to develop its export business.
2. Product Readiness for Export (PRE):
Product advantages carry over to the export market as well. If the enterprise’s products are successful in the domestic market, competitively priced, up-to-date in design and engineering and appearing to the selected customer segment, marketing opportunities abroad are likely.
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To assess your product readiness for export, you must look at each of your products critically, and identify their strengths and weaknesses. You must also do this analysis in the context of the targeted export markets.
Overall Assessment of Export Potential:
After doing the series of exercises given below, you should be able to summarise your major findings and conclusions about both ORE and PRE.
It is strongly recommended that you should carry out this analysis in collaboration with someone outside the company, e.g. an officer responsible for export promotion in your national enterprise agency.
By using a scoring procedure, or by making a subjective assessment, you can classify your enterprise under one of the three categories (low, moderate or high) in each of the two dimensions. Its position in the matrix given below is dictated, then, by its relative strengths in the ORE and PRE areas.
Depending on where your company lies in this matrix, a different set of recommendations will apply. You should not consider entering the exporting business unless you reach at least a moderate level in both areas.