What is export potential? It is the company’s ability to take advantage of its business opportunities abroad.
Export potential is derived from a set of enterprise characteristics such as domestic marketing performance, resources and products. It is, therefore, measurable at the enterprise level. We shall suggest what internal characteristics make up a successful exporter.
There are also external factors which we shall discuss first. A characteristic of the external factors is that you cannot influence them as an individual exporter. Some important external factors are as shown in the following figure.
The inherent strengths or comparative advantages of your company, e.g. its resources, location, climate and cost structure of the economy will set the stage for your enterprise’s export efforts.
Government Policy on taxes, financing schemes, information and incentive programmes, and other matters plays a significant role in aiding export efforts. It may also hinder exporting through bureaucratic red-tape and restrictions on imports, foreign travel, advertising abroad and other means.
The relationship between your currency and that of your export customer (exchange rate) floats, e.g. changes continually. As your currency weakens, it gives you a competitive edge in export markets. As it strengthens, you may lose competitiveness.
Exporting succeeds when there is a good fit between your product and your market. A good fit exists when you can respond to an export opportunity with exactly the product benefits the export customer wants. It is up to your company to capitalise on the opportunities that always develop in specific export markets.