Export requirements

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Export requirements

Scientific ability and human experience is one of the most important assets and wealth of any organization. Training and development in many organizations is an integral part of human resource development. Professional organizations have mandated training hours for employees throughout the month and year, and consider this program to be an investment in human resources, considering the fact that technology has a direct impact on employee skills, this impact can be useful or harmful, but since there is also the discussion of individual management, by doing it, people can benefit from technology to accelerate to achieve individual and organizational goals. Of course, we must keep in mind that it is not only organizations and companies that care about the training of their human resources, but also the people or personnel of an organization for their personal growth and empowerment, outside the organization towards training and acquiring new skills. Education in the field of trade and international commerce is one of the integral components due to the specific legal and executive sensitivities as well as numerous complexities in the course of trade. In the first step, exporting goods may seem very simple in appearance, but in reality, it is a business full of risk and with its own risks along with new opportunities. Appropriate export training and acquisition of trade and international business skills are a lever in order to deal with these threats, risks and facilitate an attractive path in export.

Effective training should lead to learning and learning should lead to behavior change. From the point of view of Peter Drucker, a famous expert in the field of management, EFFECTIVENESS means doing the right thing. So, we conclude that if the training does not change the behavior, then the training was not correct and worthy, and we should not expect significant feedback from it in the organization, the company’s mechanism or individual changes.

Classification of target people to receive export training

1- Export training to the individual:

As it is clear from its name, a person takes part in export and trade training to obtain information and his personal capability, which may be done with the purpose of employment in the structure of an organization or a trading company, or the person may be employed to improve his knowledge. His executive position in the organization to take the relevant training course.

2- Export training for entrepreneurs or small companies:

In this part of the training, the business owner has the desire to export goods for the export of goods or goods, or he wants to hold an export training course in his company in addition to himself, other people and personnel to enrich the knowledge of exporting goods in order to be updated.

3- Internal export training for a large organization or company:

Usually, these companies have departments called human resources and similar things within their structure, which pay a lot of attention to training planning and human resources development.

What is export performance?

In this discussion of export, export performance refers to the degree to which a company achieves its goals in the process of exporting a product to international markets (Kavusigel and Zhou 1994) or the impact of marketing issues on export performance. In fact, export performance is defined as the ratio of the company’s actual performance to the goal.

If the company can achieve its export plans, the export performance will be equal to one. In an ideal case, this ratio will be greater than one, and in unfavorable conditions, the export performance is less than one. Of course, it should be noted that export performance is related to the actual performance of the company on the one hand, and on the other hand, it is related to accuracy in targeting. If the export target is not chosen carefully, the evaluation of the export performance will be of low quality and will not be helpful. Setting a low target for a company can lead to an inflated ratio when the actual performance has not been good. Also, the overly strict and unreasonable goal can also challenge the company.

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What is the export network ?

A set of relationships that help businesses sell their products are called export networks. For example, big businesses establish agencies, branches, offices, or even factories in other countries to facilitate the export process. These policies are sometimes implemented by governments to support small and medium industries.

For example, governments may open retail stores in different parts of the world to support local crafts. Of course, legal issues should also be considered. The existence of legal structures in some countries has also caused companies to think of transferring a part of their factories abroad, and in fact, they have started to create an export network. For example, strict environmental laws in Europe have caused many cement factories in European countries to be closed and transferred to developing countries.

These are part of the benefits of creating an export network, other benefits of a strong export network are flexibility and lack of serious damage in regional and local crises. For example, after the devastating 2012 tsunami in Japan, Japanese companies faced many problems with supply and production, but a large number of these companies were able to keep their foreign units active and avoid the complete shutdown of their company during the crisis and after.

Another advantage of creating international export networks is the company’s approach to diverse and competitive global markets, which itself increases efficiency and better market knowledge inside and outside the company. Undoubtedly, one of the important concerns of managers is knowing the market and predicting its future. If managers have a strong export network, they can benefit from the experiences of their various markets and use these experiences in their other markets. The range of company networks can be divided into several categories:

Local export networks :

The radius of local export networks is within the borders of the country. In the local export network, the infrastructure related to transportation, the diversity of subcultures, the level of technology, the knowledge of manpower and the size of the local market are influential factors. Local export networks make it possible to produce and sell goods within the borders of the country. Of course, it is possible to export products to other countries as well, which is usually done by intermediaries without the involvement of the manufacturer. In this way, traders who have the necessary information from foreign markets buy goods and export after taking possession of the goods.

Regional export networks :

In order to take advantage of the relative and absolute advantages of neighboring countries, large companies establish export platforms in these regions. For example, many large companies in the world have established their factories in China in recent years in order to use the cheap labor force of this country. Also, transportation and having water borders can be another reason for creating these platforms in neighboring countries and the region.

On the other hand, the close culture of ethnic groups in a region and the closeness of language are also effective in strengthening regional networks. The noteworthy point in this matter is the migrations in one region. Immigrants can be an important source for expanding the network of countries. This network can be very valuable especially for immigrant family members. In other words, immigrants are an opportunity for their family members who can create a valuable network. Family ties can be trusted and dependable because of the strength of the relationship.

International export networks :

Usually, large and multinational companies pave their way to penetrate markets by creating international export networks. This network is spread in different regions of the world and the business can sell its products in countries that are considered favorable markets. In fact, the international export network is a collection of nodes divided in the best and most ideal geographical locations in the world. Businesses that have an international export network first choose the best areas to establish a node and then form their export network.

Global export networks :

Global export networks:

The global export network is the best type of export network and has a location in almost all countries of the world to sell or distribute products through it. Not many companies have the ability to create a global export network. Coca-Cola, Gillette, or even Samsung can be mentioned as perfect examples of a company with a global export network. These companies sell their products in more than 200 countries.

One of the advantages of the global export network is the production of standard and mass-produced products, which leads to economies of scale. This issue causes the companies that use the global export method to find a price advantage in front of their competitors. These companies can become valuable global brands with their integrated marketing policies.

Environmental effects in exports

In the first step, in order to enter and have a useful presence in international markets, company managers should investigate the macro environment of potential countries; In other words, several countries should be considered as priority and entry options.

In a broad view, the market of all the countries of the world is considered a suitable entry option for the company, but this situation is very rare and few managers are aware of defining such a level of the target market. At first glance, naturally, some countries have more suitable conditions for entry that should be given more attention.

For example, geographical conditions and neighboring countries, the existence of customs and economic unions, good diplomatic and commercial communications, etc. make some countries to be prioritized. Accordingly, companies that intend to enter international markets usually consider neighboring countries first. Also, the market of some non-neighboring countries may be a priority for companies due to favorable diplomatic relations. On the other hand, a number of markets may be at the top of entry due to specific conditions, the company’s position and the managers’ point of view. In this way, after determining the entry priorities, the company should investigate the conditions and macro environment of these countries in order to find the best point and area of presence.

Choosing the right market in international trade

It is possible to use the famous PESTEL model in examining the macro environment conditions of countries, which is a complete model for describing the macro environmental factors affecting a business, which we will discuss in detail in its various aspects:

• Political factors :

One of the most important factors affecting the success of businesses and manager’s decisions to enter international markets is the presence or absence of political stability in the host country. It has been seen that some countries show unstable political behavior very traditionally. On the other hand, there are countries that have more favorable and higher diplomatic stability and provide the environment for economic activities and businesses. It is natural that countries that are politically stable and show reasonable behavior in politics are better options for establishing business relations. Also, the government’s view on foreign investment and facilitation of exporters’ affairs can also play an important role on the company’s decision to enter a market. An important aspect of the efficiency of a government is to provide infrastructure in accordance with the country’s potentials, providing accurate and transparent information is also a positive factor in attracting economic actors in international markets and creating business networks.

• Economic Factors :

Another important factor in evaluating the macro environment of a country is the issue of economy, the importance of the economic factor is to the extent that the next steps in the process of choosing the target market rely on this factor. In fact, the next steps will examine the details of this factor. Nevertheless, in the first step, it is necessary to pay attention to macroeconomic indicators. The analyzed indicators at this stage include the three main indicators of interest rate, inflation and economic growth. High interest rate and inflation are unfavorable factors and high economic growth is considered a favorable sign for investors. Also, economic stability in a country is one of the signs of the efficiency of the economy and the decision-makers and economic officials of that country, and it reduces the risk of investing in the country. On the other hand, severe and sudden fluctuations in economic indicators may lead to the withdrawal of international investors.

Powerful money is also considered a positive factor and a unique incentive for foreign companies that intend to enter a new market. In fact, good export goals are directly related to having a strong currency in the same country. Because the price of imported products in that country is lower than the purchasing power of the people.

The presence of a large and active private sector is another sign of a favorable economy to enter that country. In countries where the private sector is weak and the work is carried out by the public sector and government-affiliated institutions, productivity is generally seen to be low and, unfortunately, corruption is at a high level. In case of lack of coordination, businesses may face serious risks. In an efficient and coordinated system with the private sector, the government adjusts macroeconomic, financial and commercial policies in a way that leads to the dynamism and improvement of the economy. Organizations and processes related to the government also cooperate with the private sector and international economic actors.

Perhaps the most important organizations related to international trade are the customs of the countries. In case of inefficiency of the customs systems and processes, the merchant will have to bear many direct and indirect costs and the work risk will increase. The existence of efficient and powerful financing systems such as the stock market, banks, financing and leasing companies is also a sign of the efficiency and dynamism of the nation’s economy.

• Social Factors :

Another topic of interest in analyzing the macro environment is the social factor. To investigate this factor, indicators such as population growth rate, demographic age pyramid, culture, literacy and social awareness, people’s work culture and commitment, work ethics and legalism should be taken into consideration. Basically, the favorableness of these indicators in a country can lead to an increase in demand and improvement of investment conditions in the country.

• Technological Factors :

Another significant factor in the analysis of the macro environment is the important factor of technology, which is the research and development activities, the automation of production processes, the rate of technological change among the important and effective indicators of the technology factor. The countries that have a favorable and favorable situation in this factor have a high quality of domestic products and it seems very difficult to accept foreign goods with high technology in these countries.

• Environment Factors :

Due to the increasing importance of the environment category in the world, this factor has become an important component in the analyzes of governments and nations. In addition to the index of environmental changes, the climate and weather of a country are also considered as important indicators in this factor. Countries in which environmental changes are considered seriously emphasize the use of products in accordance with the preservation of the environment. The reason for the wave of consumption of organic products in many countries is based on this. Therefore, businesses should pay special attention to environmental points while entering these markets. Favorable climate and weather can also have a positive effect on the demand and economic growth of countries. The climate is also effective on logistics and transportation methods, which directly affects the category of international trade and commerce.

• Laws (legal) Factors :

In the end, laws, as the final and effective factor on the macro environment of the country, are always taken into consideration by businesses. Some laws such as labor law, social security, trade law, anti-monopoly laws, consumer protection, import and export, etc. should be considered by organizations, merchants and companies to enter the international market. Individuals or companies may focus more on some of these laws depending on the method of entering a country’s market. Another point in examining the laws is the degree of acceptance of international laws in the country’s legal system. It is natural that the more international rules and regulations are accepted in the country, the risk of entering that country will decrease and the investment environment will be safer and less risky.

Mainly, there is no need for field research to review the laws, and the reports of the legal and specialized authorities of the countries and the international can be used for its preparation. In other words, the first step of the process of choosing the target market is not so complicated and does not require high costs. In this step, it is possible to remove unsuitable countries easily without field investigations.

By examining these factors and indicators, the company must first prioritize the countries to enter them. In this step, some countries may be completely left out and ignored due to the existence of some basic and structural weaknesses.

All.
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share on :

Export requirements

Classification of target people to receive export training

1- Export training to the individual:

2- Export training for entrepreneurs or small companies:

3- Internal export training for a large organization or company:

What is export performance?

What is the export network ?

Local export networks :

Regional export networks :

International export networks :

Global export networks :

Environmental effects in exports

Choosing the right market in international trade

• Political factors :

• Economic Factors :

• Social Factors :

• Technological Factors :

• Environment Factors :

• Laws (legal) Factors :

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