Business

Export Business
Businesses no longer need to limit themselves to their own
domestic market – the entire world is within their reach
Introduction
• World marketplace is now open
• Marketplace
• unconstrained by distance,
• unrestricted by technology and
• unmindful of country of origin
• Export company should consider
• Enhanced Competitiveness
• Diversified Markets
• Greater Economies of Scale
Exporting
• Business opportunities
• Increase sales
• Company size
• Smallest company can make it big on the international scene
• Before the launch of export venture
• Human and Financial Resources
• Competitiveness
• Expectations
• Fundamental Factors
• First factor - resources and ability to trade
• Second - skills and knowledge of its people
• Third - ability to put these to work to achieve the greatest
productivity and growth
Benefits and Challenges
Benefits Challenges

• Increased Sales • Increased Costs

• Higher Profits • Level of Commitment

• Less Dependence on Traditional • Sensitivity to Cultural Differences

Markets

• Diversified Markets • Paperwork

• New Knowledge and Experience • Accessibility / Approachability

• Global Competitiveness • Competition

Export Business Plan
• Three general steps
1. Situational Analysis
2. Market Analysis
3. Financial Analysis
Cont.
• Three general steps:
1. Situational Analysis
• Company Overview
• Company mission and objectives
• Quality and quantity
• Affordability
• List of products or services
• List of products or services difference from local
• Availability of Resources
• Capacity analysis
• Existing production
• Maximum production
• Current financial analysis
• Human resource analysis
Cont.
• Three general steps:
1. Situational Analysis
2. Market Analysis
• Market size/ Market Share/ Analysis of Competitors
• Distribution Channel/ Logistics
• Market Research
• Targeted market
• Market Information
• Price for type of product/service
• Sufficient demands for product/service
• Breakeven template
Cont.
• Three general steps:
1. Situational Analysis
2. Market Analysis
• Geographic Analysis
• Economic trends
• Regulations
• Analysis of Customers
• Gender, age, location, income, population
• Marketing Mix
• Price
• Discount policies
• Product
• Changes/modifications to the product
• Promotion
Cont.
• Three general steps:
1. Situational Analysis
2. Market Analysis
3. Financial Analysis
• Sales Forecast
• Methods of Payment
• Unit Sold, sales price line, total sales
• Cash flow report
• Break-Even Analysis
• Balance Sheet
• Profit & Loss Statement
Exporting Services
• export readiness assessment
• export counselling
• export preparation and training
• information on trade fairs and missions
• introduction to foreign buyers visiting
• contacts in international markets
• leads on worldwide business opportunities
• liaison
• export financing and insurance
• market information and intelligence
Types of Import/Export
Businesses
• Export trading company (ETC)
• finds out what foreign buyers want
• finds domestic companies that can export the goods
• Export management company (EMC)
• help to ship goods overseas
• help in hiring distributors, creating marketing materials and
preparing shipping logistics
• Import/export merchant
• buy merchandise from a manufacturer 
• resell that merchandise around the world
Export Business &
Management
• Conducting the export activity in an orderly, efficient and
profitable manner
• Need For export business & management
• Earning foreign Exchange
• International Relations
• Balance of payments
• Reputation in the World
• Employment
• Research and Development
• Standard of Living
• Economic Growth
Systematic Approach
- Export Business & Management

• Identifying Export Products

• Market Selection
• SWOT Analysis
• Export License
• Export Pricing and Costing
• Understanding of Foreign Exchange Rates
• Export Risk Management
• Packing and Labelling of Goods
Cont.
• Identifying Export Products
• Consistent standard quality, comparable competitors
• Price of the exported product should not fluctuate very
often - threatening profitability
• Strictly check the government policies
• Study the various government incentive schemes and tax
• Exemption like duty drawback and DEPB.
• Seasonal changes of selected products
• Special packaging and labelling - food and dairy products
Cont.
• Market Selection
• The demand for product/service
• The size of the potential audience
• Whether the target audience can afford product
• Regulatory issues are that impact on exports of product
• Appropriate distribution channels for product/service
• Environment for doing business – language, culture, politics
• Financially viable to export to selected market
Cont.
• SWOT Analysis
• Useful method of summaries all the information generated
during the export planning
• Export License
• Goods mentioned in the ITC (HS) - classifications of Export
and Import items
Cont.
• Export Pricing
• Range of products offered.
• Prompt deliveries and continuity in supply.
• After-sales service in products like machine tools, consumer
durables.
• Product differentiation and brand image.
• Frequency of purchase.
• Presumed relationship between quality and price.
• Specialty value goods and gift items.
• Credit offered.
• Aggressive marketing and sales promotion.
• Unique value goods and gift items
Cont.
• Export Costing
• Export costing is basically cost accountant's job.
• Consists of fixed cost and variable cost comprising various
• elements.
• Advisable to prepare an export costing sheet for every
export product.
• Foreign Exchange Rates
• Major concern for companies doing business internationally
• Changes in the exchange rate can have major implications
for profitability of international operations
• Rate at which one country’s currency is exchanged for
another country’s
Cont.
• Export Risk Management
• Credit Risk
• Poor Quality Risk
• Transportation Risks
• Logistic Risk
• Legal Risks
• Political Risk
• Unforeseen Risks
• Exchange Rate Risks
Cont.
• Packing and Labelling of Goods
• Packing
• Physical Protection
• Containment
• Marketing
• Security
• Labelling
• Shipper's mark
• Country of origin
• Weight marking
• Number of packages and size of cases
• Handling marks
Setting up of Export Business
Cont.
• Business set up, Location, Name, Logo
• Proprietorship – Service Tax or VAT registration
• Obtaining PAN Card
• Opening Current Account
• Import Export Code (IEC) – on submitting company pan
card/applicant’s pan card, applicant’s photograph,
cancelled cheque business current a/c
• Obtaining the Registration cum Membership Certificate
(RCMC)
Cont.
• Registration
• Import - Export code (FTDR Act)
• Permission - Ministry of Commerce
• Registration - Export Promotion Council or Commodity
Board
• Get - Inspection Certificate
• Technical Sep.
• Payment method
• Shipping
• Documentation