Unit 3 – globalEDGE Chapter 14
Exporting

Exporting can help play a major role in business development and growth, as well as influx into the economy that the firm does business in. Reduction in tariff barriers, lower transportation cost, and economies of scale have all helped exporting become an even bigger player in the field. When considering exporting as an option for the firm, one must consider several things, including but not limited to, the advantages and disadvantages of exporting, how to approach exporting, how to manage the transactions, what the payment methods are, and be prepared to make some adjustments and/or changes to the product to cater to the target market they are entering.
Some of the challenges involved with exporting are advantages and disadvantages. It is up to the firm to decide which outweighs the other before moving forward with the decision. Advantages include the ability to diversify the client base and create new opportunities for sales. When a firm becomes saturated in their current market, they might hit a plateau. One of the ways around that is to go to a new market. There is an increase in sales and profits by selling goods and services to a market the company never had before boost sales and increases revenues. In addition, foreign sales over the long term, once export development costs have been covered, can increase overall profitability. Firms can also benefit with lower costs per unit. The foreign market will allow the firm to expand production to meet the new demand. The increase in production can offer lower cost per unit and lead to greater use of existing capacities. A firm can also experience a potential company expansion. Firms who venture into the exporting business usually have to have a presence or representation in the foreign market. This might require additional personnel which would lead to an