Page 79 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes
Example: Charms & Co., based at Panipat, is a manufacturer of Home Textile & Home
Furnishing fabrics, Rugs, Mats, Durries, Bathmats, Tablemats & Covers, Cushion covers,
Handloom Bed covers, Curtains, and Bags. It now purpose to explore export opportunities.
Some of the decisions that face the company could be summarized as follows:
Is the company management really committed to the task of exports?
Have they worked out a detailed proposal for entering foreign markets including setting
of export objectives?
Does this export proposal match the overall company objectives?
Is the company in a position to afford/divert the required finance, production and human
and other resources to the export project?
In terms of cost-benefit analysis, does the export plan justify investment in exports?
What products should the company plan to export to begin with?

Which countries offer most demand for such products?
What will be the right time to enter the said foreign markets?
4.1.2 Common Pitfalls

Let us also take a close look at some of the common pitfalls of exporting. An exporter must
safeguard himself against falling prey to any or many of these:

Failure to realistically analyze the proposed export operations
Inability to develop a suitable export-marketing plan
Half-hearted commitment/lack of full sponsorship by the Top Management

Careless/hasty decision-making
Chasing orders all over the world

Unwillingness to be flexible in terms of product offerings
Lack of initiative in gathering sufficient market/buyer information
Acute focus on short-term gains.
Scanning the general business environment: The decision to export itself needs the analysis of
general business environment both at the domestic and international level. However, once you
have actually made up your mind to start export business, you need to scan and study the
general business environment at length. A starting point could be a geographical segmentation
followed by a ranking of different countries on pre-selected parameters like market size and
potential for growth. Financial indicators like GDP & PCI, Risk, Governmental Regulations and
Control, State of Infrastructural Development, Nature and size of Domestic and Foreign
Competition, Accessibility, etc. Each criterion could be assigned weights and the countries can
then be ranked on the basis of their overall scores. Easy as it may sound, it is a very complex
exercise. However, computer software packages have made the task relatively simple and very
much possible these days.
This initial screening will give the serviceable potential pockets. Generating a possible set of
products to fit these pockets is another essential step an exporter needs to take simultaneously.
The focus has to be on finding a strategic fit between the proposed products and potential

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