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Export Business Plan for a Saudi Company
Export Business Plan for a Saudi Company. An export business plan by any company serves as a blueprint that defines the approach that the company will use to export or expand its export business. Prior to committing itself to the export business, a company must take to consideration the advantages and disadvantages that come with export into new markets. Importantly, companies pursue export due to the advantages of increased sales and profitability, enhancing competitiveness in the domestic market, diversification, gaining global market shares, and creating a capacity for the company’s expansion. Some of the challenges may include high financial costs, financial risk, high modification of products, and the need for export documentation and licenses. For a company in Saudi Arabia, the type of market research that should be conducted include research on potential markets, largest and fastest growing markets, market conditions, market outlook and trends, competing firms, and the buying power of customers.
Export Business Plan for a Saudi Company
One of the main areas of research is on the potential export markets that the Saudi Arabian company can export to. The research on the export markets will include a varied approach that considers a variety of factors that are country related as well as business related. As an example, the screening of potential markets should involve a look at the export statistics to different countries while also considering export statistics of the particular product that the company is selling. While most Saudi Arabian companies may be exporting their products to Asia, export statistics may indicate that the largest traffic of the products offered by the company goes to Europe. The advantage of this approach is that it helps the company narrow down on potential markets to explore, identify some constraints, and check the growth or decline of export to different countries. An example of the research available on this area can be retrieved from the UN Statistical Yearbook that has data on export-import trade and other country by country information.
While the information on potential export markets may be general, this can be narrowed down through research on fastest growing and largest markets with regards to exportation. Such a research focuses on the products that the company offers and may involve an analysis of data spanning about five years. A comparative analysis shows whether the growth has been steady and how well a country bounced back after a recession. According to Delaney (2016), a company should select the top three markets that are most penetrable and with the best potential for the product being offered (p24). An example of a primary source of information is Worldcasts that details product and market forecasts for 150 countries. The benefit of such a research is that it narrows down potential markets, gives the company an idea of what to expect in the market, and also provides information on different possible destination countries.
The next type of research focuses on market conditions of the selected target markets. Under this research, the company takes an incisive look at product trends and other factors that could influence demand. The research data should focus on the overall consumption, demographic information, factors that may affect marketing and product use, foreign barriers to the importation of the product, and any incentives influencing exportation of the product to the target market. The research also highlights issues such as shortage of resources, conflicts, political instability, and technological advances (Julian, 2014, 351). Potential primary sources of such information include the World Population publication that gives demographic information, the UN Statistical Yearbook, and Exporters Encyclopedia. The advantage of this research is that it gives deeper insight into the market outlook and trends in the shortlisted countries and thus allowing the company to choose those that show the largest business potential.
Analysis of the competition and buying power of consumers with regards to the particular product is an essential part of the market research that focuses on potential customers. An analysis of competition may be regarded part of market conditions research but this also aids in understanding the existing market share and the type of consumers that the company can target. On the other hand, the buying power of consumers can be identified through a consideration of various market conditions including compensation and the cost of living in the particular country. While competitor analysis should be done through a look at individual companies in the country, primary sources for consumer related information are the OECD surveys. The advantage of such research is that it sheds light on expected competition in the destination market and the expected consumption habit.
From the analysis in this paper, an export business plan should be informed by market oriented research that looks at the market trends and consumer related information. The essence of such information is guiding the company on potential target markets and narrowing down the markets to those with the highest potential. The choice of exporting destination will be informed by how well the company thinks its products will perform in the particular market. The ultimate measure is the expected growth and profitability for the company should it access a certain market for its export business.