EXPORTING Flashcards
What is exporting
(Probably the least risky way of entering an international market) Exporting occurs when goods and services produced in one country are sold in another.
What are the pros of exporting
Low risk - do not need to set up operations overseas - Making use of existing facilities in your home country and getting your product into new international markets
Increased size of target market
Production takes place in home nation and therefore quality can be controlled
Benefit from economies of scale and efficiency - increased capacity utilisation
What are the cons of exporting
Lack of in depth knowledge of local markets
Products may be specialised - Maybe your products might not be a good fit for that market.
Need to transport products - transport costs and torrid barriers
When is exporting most appropriate
Goods or services are easily transportable
Goods and services can be standardised across international markets - You don’t need to alter the product to make it appeal to the new market
There are reliable transport links
An organisation has production processes it wants to protect
