Once you have decided that it is time to take your products or services to new markets, it is important that you start planning your entry strategy. But how to start planning if you still don't decide exactly where you are going to take your products?
One of the essential points in any export strategy is to choose the right market for your products (globally, consumers may have very different buying patterns from each other).
According to the Trade Africa Promotion Program “Deciding which country to sell your export products to, will be far easier if you start examining only two countries and comparing them. If you choose to look at more potential target countries, you will need a lot of time, because country research is probably the most time-consuming part of exporting. Most experts recommend targeting only one country at a time”.
The Global Trade and Supply Chain Management suggest “Once you have identified which of a short list of countries that may be suitable for your business to export to, your next step is to perform some due diligence on the risks that exist in each country”.
They suggest answering these questions regarding the country you have in mind to export to:
- Security: How safe is the physical environment?
- Political Stability: How stable are political institutions?
- Government Effectiveness: Does political culture foster strong business environment?
- Legal and Regulatory: Will the legal system safeguard investment?
- Macroeconomic Risks: Is the economy stable and predictable?
- Foreign Trade and Payments: How easy is it to get inputs/money in and out?
- Financial Risks: How healthy is the local financial system?
- Tax Policy: Are taxes low, predictable and transparent?
- Labor Market: Could labor market factors disrupt operations?
- Local Infrastructure: Will infrastructure deficiencies negatively affect operations?
MARKET SIZE AND TRENDS
In principle, the larger the target market, the more export opportunities it will provide. However, even more important is the trend of this market. Study the evolution of the penetration of your product and the GDP per capita of the country, and if both indicators are positive you will have found a promising market, since the demand for your product will tend to increase.
We are here to help you. Building an exporting strategy isn’t an easy task, but it gets considerably easier once you have all the elements of a high-quality market research. Infinitus can help you with this and all the other steps involved in the exporting process. Contact us to start looking into your personalized strategy!