This was originally posted September 2011 under Expertexporter’s wordpress blog.
Are you new to exporting or seeking to diversify into new international markets? Then don’t forget to identify, analyse and evaluate opportunities before leaping in. By following this process, you can remove some of the uncertainty of exporting.
Identify – Opportunities can be identified through a combination of desk research and field work. Desk research is the collection of secondary data which allows an organisation to examine potential markets and reject any which do not meet particular criteria. If desk research reveals that there is significant opportunity in a particular market, this can be followed up with a market visit. The visit should include meetings with agents, distributors or key industry personnel to determine the potential in a particular market. It goes without saying that advance planning will improve the success of such a visit, so it is important to have a clear set of objectives and have meetings arranged in advance.
Analyse – If research identifies possible business opportunities, then it is time to analysis them to see if they can be translated into business success.
A SWOT analysis will help determine the strengths, weaknesses, opportunities and threats associated with particular market opportunities. Strengths and weaknesses are internal and can be controlled but opportunities and threats are external factors and cannot be controlled. The strengths of the current operation can be harnessed to follow up on opportunities whilst plans should be put in place to reduce weaknesses and manage threats. It is also worth doing a PESTLE analysis which involves looking at the political stability of the market and the economic, socio-economic, technological, legal and environmental factors.
Evaluate – If you still feel confident about the potential of the market after analysing it from every angle, the final step in determining the validity of an opportunity is evaluation. This involves taking a look at market size, growth rate, market trends, market accessibility and market profitability in order to rate the attractiveness of the market. Care must be taken at this stage; an overestimation of any of the above factors could result in poor decision making and exposure to unnecessary risk.
The identification, analysis and evaluation process is not something that should only be done once. A regular review of the market place will keep you up to date and ensure that you are prepared for changes which could impact on your business. Who knows what exciting new business opportunities might reveal themselves.