air interview on the benefits of exporting
There are many good reasons or benefits for export include the following.
Exporting is a way to increase your sales potential; it expands the pie you earn money from, if you're stuck trying to make money on the local market in the case of South Africa, our market is relatively small compared to markets North America, Europe and Asia, while the local market may represent a sufficient sales potential for small businesses, for medium enterprises and the local market is too small and the only way to increase sales is to export.
It must be said, however, if you're not selling at regional and national level, you must first aim to expand your market share in the local market Once you have saturated the domestic market, then you only look beyond the borders of South Africa stated that there is no sales barrier that starts automatically when the end of your border increased sales also have an impact on profitability but not always positive productivity by reducing unit costs and can increase your size farm perceived and stature, which affects its competitive position relative to other organizations of the same size Moreover, research and development R & D and other costs can be offset by a higher sales base, or moving into exports can contribute to the overall expansion of the company to others, the exports tions may be way to test the possibilities of granting licenses abroad, franchising or production.
Obviously, you are not likely to enter the export market in order to make a loss Companies generally seek to make profits and the best profits in many cases, exports may contribute to increased profits because the average orders for international customers are often more than they are domestic buyers, as the importers generally for the container instead of by the pallet thus affecting the total sales and total profits Some products - especially those who are in the unique nature or very innovative can also command profit margins abroad than in the local market having said that, it is not uncommon - in fact, it is likely - you can receive smaller margins recipients of your export sales compared to the local market is the reason the highly competitive nature of global markets q ui requires exporters to lower prices, compression profits and reduce costs you can also see that in some markets give you higher profit margins, Whil e in other markets profit margins are much lower.
It is risky to be bound to the inner sole export sales market in a variety of diverse foreign markets can help reduce the risk that the Company may be exposed due to fluctuations in local and foreign business cycles at some point , UK, Australia and Germany will enjoy growth rates by selling in all these countries, the risk of weak growth in one or more of these countries will be offset by increased growth in other, resulting in a balanced portfolio global growth also with the difficult working conditions that many companies in South Africa face today, exports can help create and maintain jobs or reducing the risk of labor disputes that could otherwise cripple the company.
Exports contribute to the production capacity idle at work This is generally achieved more efficient use of existing plants, machinery and staff Moreover, because you now sell more products without increasing total costs in same measure, which has the effect of reducing your unit costs, a decrease in unit costs more productive overall operation make it a more competitive product on the local market and in foreign markets, or can contribute to profitability overall business.
Exporting is a great way to enjoy pure economies of scale with products that are more global in scope and have a wider range of acceptance around the world in other words, they can be used to other parts of the world without much adaptation this is in contrast to products that need to be tailored to each market, which is costly and time consuming and requires more than the latest product investment, the widest range of acceptance in the world, especially to younger customers, often called the world's largest consumer.
With increased export production and sales, you can achieve economies of scale and spread costs over a volume of recipes more you reduce the average unit costs and increase profitability and competitiveness in the long term exports may allow a company to expand its production facilities to achieve an economic production level This should not be confused with increased throughput on existing capacities, as stated above.
Minimize the effects of seasonal fluctuations in sales.
Being in the southern hemisphere, South Africa's seasons are opposite those of the northern hemisphere for companies that sell seasonal products such as fruit producers, and swimwear manufacturers or lotion solar, be able to sell these products in the northern hemisphere when our season ends, contributes to the realization of a model of longer and more stable sales This increases sales potential of these products and also helps reduce risks.
A good reason to start exporting is when the local market is too small to support the production of a business or when the market becomes saturated for companies that produce heavy industrial machinery or who have invested in large plants, they should be able to sell enough of their manufactured goods to justify the investment and to ensure that the unit price of goods are kept low enough with relatively small markets such as South Africa, it is usually not long before the local market is saturated and provides additional opportunities for sales limited Many large South African companies have had to turn to foreign markets to justify their existence examples include most vehicle manufacturers such as Opel, VW and BMW; paper producers such as Mondi and Sappi; and mining houses like Anglo American and De Beers is the same with international companies such as Volvo, Philips and Roche They only way companies such as these can justify their investment is to sell abroad because their local markets respectively are too small.
It is not unusual for a recession in the local market to act as a spur for companies to penetrate export markets that may offer greater opportunities for sales Although this may have the advantage of offering a current sales potential for the company in question, the danger of this approach is that when the local market improves, these companies abandon their export markets to focus on the local market now carrying foreign importers become disillusioned with this type of exporter and often see all companies to the same south African and will want nothing to do with the south African exporters, even if they are serious.
All products go through a life cycle of the product In the beginning they are new and increase sales dramatically, before stabilizing sales outside and they become what is known as the products mature and eventually sales begin to decrease and the product is going down now, a product that has entered its declining phase may have a life elsewhere and finding a market where the product may be sold again, you are essentially extend the cycle Otherwise life of the product, even if it is a common enough product, it can also be nearing the end of its life cycle on other overseas markets especially in major markets such as Germany, United Kingdom and the United States and they can decide to terminate the product Although the market may have declined to a point that makes not profitable for these companies to continue manufacturing the product in question, the e market may still be large enough for you to supply the market declining This has the effect of making more efficient use of exis ting plant infrastructure and other investments in the production of this extends sales, reduced unit costs even further and may allow higher margins to generate when you have a product that is almost its life cycle, you should always look to see if you can find a market for the product abroad.
The global market is a highly competitive place and participating in this market, you need to be just as effective and quality conscious It is generally the case that successful exporters are also very successful in their markets because of their efficiency and of attention to product quality.
A company can have a unique product that is not yet available elsewhere In this case, these untapped markets are likely to lead the export activities of the company Other companies may want to take advantage of the large volume purchases major markets overseas, as in the United States, Europe and Asia.
The more formal theory of internationalization examines factors customers, competitors and the costs that govern the process of internationalization theory argues that abroad, or may, in some cases, businesses can go global in response to their customers moving abroad Otherwise, they can track their competitors decide to enter a foreign market especially to attack an overseas competitor that has entered the domestic market of the company, in its own domestic market competitor Finally, companies can go abroad to take advantage of labor costs, skilled labor or other cost factors such as low telecommunication costs or energy that are much better in a foreign market, for example the expansion in India to take advantage of programming skills and lower wages could result in a major benefit for a company of local software development must say, however, that these factors are more likely to be relevant for large enterprises, instead of small-scale export operations.
For some companies, the status of being involved in international trade is very important for them.
Too often, however, many local companies in South Africa simply follow their domestic competitors in exports or they turn to export markets because of the difficulties in local markets saw low growth in the domestic market mentioned above above Alternatively, a company can use exports as a way to offload excess production capacity None of these reasons are very strong reasons to move in exports in the latter case, when local sales pick up again the export business weather does not then account its export markets to focus on new domestic sales, often leaving foreign companies the lurch creating a bad impression and resistance to future export sales.
The various benefits of exporting, advantages, export, the market is saturated.