WHAT IS EXPORT?Is the act of producing goods or services in one country and selling or trading them to another country.
IMPORTANCE OF EXPORT Need for survival Growth and profitability in the long term. The entrepreneur doesn’t depend exclusively on the local market Diversifying the risk of operating in one market. Improve corporate image to customers and suppliers. New challenges
TYPES OF EXPORT Exports are divided into two main categories:Direct Exports:The type of exporting in which firms enterforeign markets directly and do their ownexport marketing.
Indirect Exports:The export is made through anintermediary, who in turn sell to overseascustomers. Sales are negotiated with a trader in theexporters country with payment made in localcurrency from the traders office.ExamplesManufacture Under LicenceLicensing and FranchisingProject ManagementJoint Venture
ADVANTAGES DIRECT EXPORT INDIRECT EXPORT*More control over the *Provides a way to export process penetrate foreign markets without the complexities*Potentially higher profits •* Risks of direct exporting.* Closer relationship to theoverseas buyer andmarketplace
BENEFITS OF EXPORTThe decision to export can have direct economic benefits including the opportunity to -Expand your business -Increase profitability -Spread your risks -Reduce your dependence on the local -Use excess production capacity; and -Buffer against seasonal demand.
RISKS OF EXPORTING While exporting offers great benefits, there are also new risks you may not previously have encountered, that need to be considered. Risks include:Political Risk The political instability of your destination countryLegal Risk legislation will affect all aspects of your business transactions.Financing Risk Credit risk - Transfer risk
Transport Risks include damage, loss, theftand, for some products, exposure to theelementsInadequate Resources adequate resources, including raw materials, components and human and financial resources to meet the export requirement.
ACTORS INVOLVED IN THE EXPORT PROCESS-Exporter (individuals or businesses).-Banks.-Ministry of Foreign Trade.-Customs Administration.-Customs Transport Agent.