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In this post, I would like to share my opinion about what are the most significant problems a business has to consider when choosing to export a product or service.
Personally, I believe the factors that most influences exports mean the basic conditions of export, which is whether the national conditions and related regulations of host country is suitable for the companys goods or services to be sold locally. Because this is the first step of international market selection, only after choosing an appropriate foreign market, the company is willing to export.
In Hollensens Global Marketing (2016), he enumerated four aspects which will affect the entry mode decision of companies:
1. Intrinsic factors
2. Extrinsic factors
3. Desired mode characteristics
4. Transaction-specific behavior.
Therefore, I think the three factors most affecting exports are:
1. International experience (internal factor). International experience determines the export method, the export method decides the export performance. There are many ways to export, take indirect export as an example, agent is the one of the branches, many SMEs or companies lacking export experience is in the process of agency export, they lost control of products, agents may use inappropriate marketing methods resulting in low performance, or even they are also responsible for selling other companies similar and competitive products together. Abundant international experience can avoid these risks to make more proper choice and improve performance.
2. Country risk / demand uncertainty (external factor). High country risk or demand uncertainty will prevent corporations to enter.
3. Direct and indirect trade barriers (external factor). Tariffs, product or trade regulations and standards etc..
I think these three factors are the basis, but it does not mean that other factors are not important. Do you have any different views on this?