Question

What are the benefits of engaging with a product export business to developed countries for a company? Write an essay not more than one paragraph.   (10 pts)

Answer 1

SOLUTION

BENIFITS ENGAGING WITH A PRODUCT EXPORT BUSINESS IN DEVELOPED COUNTRIES

The reason for your company to consider exporting is quite compelling; the following are the few of the major benefits of exporting:

Increased sales and profits. Selling goods and services to market the company that never had before boost sales and increases the revenue. Additional foriegn sales over the long term,once export development costs have been covered,increase overall profitability. Enhance domestic competitiveness. Most companies become competitive in the domestic market before they venture in the international arena. Being competitive in the domestic market helps companies to acquire some strategies that can help them in the international arena. Gain global market shares. By going interational companies will participate in the global market and gain a piece of their share from the huge international market place. Diversification. Seeing to multiple markets allows companies to diversify their business and spread their risk. Companies will not tied to the changes of the business cycle of domestic market or of one specific country. Lower Per Unit costs. Capturing an additional foriegn markets will usually expand production in the foriegn market. Increased production can often lead to the per unit costs and lead to the greater use of existing capacities. Compensate for seasonal demands. Companies whose products or services are only used at certain seasons domestically may be able to sell their products or services in the foriegn markets during different seasons. Create potential for company expansion. Companies who venture into the exporting business usually have to have a presece or representation in the foriegn market. This might lead to expansion. Sell excess production capacity. Companies who have excess production for any reason can probably sell their products in the foriegn market and not be forced to give deep discounts or even disposeof their excess production. Gain new knowledge and experience. Going international can yeild valuable ideas and informations about new technologies, new market techniques and foriegn competitors. The gains can help a company as domestic and as well as foriegn business.

NOTE: The bold letters indicates each point which is been explained in the above paragraph