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Why You Need an Export Plan for 2015
2014 highlighted the increasingly volatile nature of the global markets. With businesses finding it increasingly difficult to adapt to market, technological and other developments, an Export Plan is critical to any company looking to develop and refine its export strategy, writes John Whelan, Export Sector Specialist at AIB.
Last year exporters had to adopt to price deflation in the Eurozone, new trade tariff barriers with Russia, extreme commodity volatility, rapid currency changes, the anti-gifting measures in China, a plethora of social unrest and social technology disruptions across the globe.
But, as the year progressed, the extent to which everything is connected to everything else became more apparent; the Russian incursion into Ukraine resulted in trade barrier measures by the US and EU, which in turn resulted in counter trade barriers by Russia and the rouble plummeting against all other currencies. The ending of quantitative easing (QE), by the US and the Bank of England, pushed up the value of Sterling and the dollar and damaged economic growth in Asia, Africa and South America. Shale oil production in the US precipitated the rapid fall in the price of a barrel of oil, improving the trade balance in major oil importing countries, and further weakening the Russian economy and many other oil producing nations.
IT related developments have had the biggest impact on Exports, not just last year, but in the past decade and most likely in the decades to come. A dominant factor has been the rise of the Internet and mobile devices facilitated by “cloud” data storage systems. The Internet is accelerating the trend for greater individualism and changing the way people communicate, buy, sell, provide services, manage companies, and control machines, vehicles and household equipment.
These developments mean companies have to continually adapt their products and services while often needing to adopt completely new business models and organisational structures. Organisational flexibility is becoming an increasingly important factor in determining a company’s success.
It is often difficult to pin down the impact of technological developments and therefore difficult for established companies to respond appropriately. We are increasingly seeing a situation in which the market leaders are often new companies that are in a position to unreservedly embrace the new technologies, or established companies but from a different sector.
We expect this development to become even more pronounced in the new world of “connected everything”. Increasingly, we are seeing that the speed and variety of technological developments exceed organisations' ability to adapt. The relatively large market leaders with a long history find it particularly difficult to adapt to the new situation.
These changes in the business and socio-economic world have made it increasingly more difficult to put together a workable plan for trading internationally. Yet, all the research has shown that 70% of business failure is due to a lack of planning.
AIB’s Export Plan
AIB has developed an Export Canvas, or Export Plan, which can help a business to identify strategies for reaching its market and customers in a cost effective way. It also enables a business to review, on one single sheet, its export strategy for the coming three years. While each year should have a clear client acquisition and sales target, it should always be borne in mind that for successful exporting you need to play the long game. Market entry for a specific country may be in year one, but it may take another two years to get a sustainable level of profitable sales in that market.
There are 12 main divisions to our Export Plan:
1. Strategic Export Objectives
2. Defined Exporting Goals for next 3 Years
3. Target Markets
4. Channel Market Barriers
5. Customer Analysis
6. Market Entry Strategy
7. Unique Selling Point (USP) of Product/Service
8. Competitor Analysis
9. Key Suppliers
10. Sales/Marketing Budget
11. Funding Structure
12. Risk Analysis
Get more details on each of the 12 sections and download your copy of the Export Plan by visiting http://business.aib.ie/exportplan
If you require finance to expand into new markets, talk to AIB today.
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