Export Strategy for an Organisation: Thai Handicraft - Coursework Example

EXPORT STRATEGY By Brief synopsis Thai handicraft is a company that specializes with the handcrafts. The company wants to expand its business to Belgium. The company already has enough products that can be taken to Belgium market. It is part of the company strategy to enter the global market to increase its competitiveness and also increase its sales and profits. The company products are the best since they are originally made and also they are environmental friendly in that they are not to cause pollution in any way. The company products have the potential to succeed in the Belgium market due to the following reasons. The products have gained a lot of dominances and competitive in Thailand markets; the company emerging the best due to the high quality of the products and the price. The products also have unique features that have enabled them to be different from those of similar companies. Export of goods and services entails consideration of various factors. These include the following. The company goods and services capability to win the market is the first factor that stimulates the expansion of the business. The availability of fund to finance the exporting activities is also a key factor that requires to be considered. It entails the ability of the company to meet the prospective demand and supply the product to the country. In order to enter into another country, it is also important to consider the following. It is important to evaluate the target country rules and regulations, terms, and conditions. In addition, the economy of Belgium in terms of its growth and development, market availability and its nature is an important factor to consider. In addition, it is important o consider the means through which the goods will be supplied in the country. It is also important to consider the risks associated with the business and activities of exports. Recommendations The issue is to establish a market for the company handicraft products in Belgium. The company is going to export handicrafts from Thailand to Belgium. It will entail using the direct exporting methods. These include selling directly to the customers; it will involve establishing an export department. One of the importance’s of this is that it will entail an establishment of a closer relationship with the market and the buyer. The other direct method that will be appropriate is the use of sales agent. The sales agents will be closing the sales and taking orders on a commission basis. According to Mikić (2011) in order to ensure effectiveness, they will not take financial responsibility or collect payment for the sales and also they wont assume any risk or responsibility for the product. The company management will handle credit and arrange the terms of payments with the clients. The company will also adopt the exporting indirectly through intermediaries. In this case whereby the market is new, the company will engage the services of a company already established in Belgium and lays a way for the Thai Handcrafts Company to supply and sell its products. The company can directly approach the potential companies such as Belgium Suppliers and Distributors Company, The Intel and Textiles Company among others. The company directors may also opt to approach the international trade consultants and any other intermediaries to access a well-established expertise and trade contracts. The use of indirect methods can also entail the company retaining considerable control over the export activities and process, and the company will be in a position to gain other benefits of exporting. Such benefits include learning more about the foreign competitors, the new technology, and other market opportunities. Background Belgium is the country that has a promising market for our product due to the following reasons. The country has a highly developed transport network that is important in this case since the products will be distributed to the structure of all parts of the country. The country was the first to undergo an industrial revolution in the early 19th century. It is known to have a superb transportation infrastructure of highways, railways, canals and ports. The country economy is supported by the industrial sector accounting for 75% of GDP and agriculture 1% of GDP. Thailand is a newly industrialized country. The country depends mostly on exports. The exports account for more than two-thirds of its GDP. In 2012, Thailand had a GDP of US$366 billion (Pearce, 2013). The industrial and service sectors are the main sectors in the Thai gross domestic product where they account for 39.2% of GDP. Thailands agricultural sector produces 8.4% of GDP. The company has the potential to supply its goods and services in large quantities as the market demands. In that, the company will benefit from the economies of scale. In relation to the authority of Belgium, there are incentives to encourage and motivate foreign investments. Due to this the country strives to encourage better ethical standards. There is an established relationship between Thailand and EU, and since Belgium is a member of EU it will be easy to carry out the business. Research on the assessment topic Belgium has a promising market due to the following factors. The country 80% trade is with EU member states. However, the government is seeking to diversify and expand trade opportunities. The Belgium country has adopted the anti- protectionist rule. The authorities also try to maintain a hospitable and open trade and investment climate thus it is a best opportunity for the company to invest in the country. There are no or fewer trade disputes in Belgium. The aim of the company to export its products will be welcomed warmly in Belgium. As identified the country encourages new foreign investments as means to promote employment level of the country. The foreign companies in Belgium offer 11% of the total workforce, and the government is willing to increase the employment opportunities (Piercy 214). Thailand has been a major exporter of various products to EU. The Belgium population comprises of a large group whose living standards are high. Their needs and wants are relevant in relation to the products the company supplies. This export strategy provides the following means for transportation. Due to the distance it is only possible to provide for two methods of transportation that is the air transport and the water transport. However, the quantity of the goods transported per time will directly attribute to the method of transport. There are many transport companies in Belgium; the best option is the DFDS Company. The company is strategically located in Belgium and offers the convenient link to the UK which will be beneficial to the company if it expands to other countries. The services of transport provided by the company are multi-modal, road-ferry-road, containerized and intermodal transportation. For the air transport, the COPEX AIR is the best option considering the reputation of the company. The company offers affordable charges and has good services compared to other companies and, in addition, the terms and conditions of engagement are compliable. The two companies have the most reliable documentation. The bill of lading, the freight bill and the FOB terms of sale are in accordance with the ability of the company to comply with them. The quantity of the handcrafts transported will be based o the prospective demand. The company will have to ensure that there is always be stock of the products in its warehouses in Belgium. Arguments against the recommendations Pursuing the exporting of the handcrafts will be faced with the following challenges. The entry to the market which will entail the use of direct and indirect exporting might be a challenge. In case the company starts by the use of direct exporting, it will be or expensive to establish itself. Such costs as warehousing, marketing, and transport costs will be high. The company will also be required to establish a section of employees who will be based in Belgium to facilitate the business. The other challenge the might be available is the choice of the deliverance of the goods methods. In that, the nature of the goods may entail either air or water mean of transport. However, it will depend on the quantity aimed to be supplied. The other risks to this business are there are cyber risks, economic developments, and corruption and bribery. Though the risks are in every aspect of the business, it is important to consider their possibility. The resource costs are also a major concern and a factor that may inhibit the attainment of the company recommendations and objectives. Arguments in support of the recommendations However, despite the possible challenges, the company has an opportunity to pursue the exporting strategy. The company will achieve the following if willing g to assume the risks of the exporting trade. Firstly, there is increased competitiveness of the company goods. In engaging in the international trade abroad entering to the Belgium market will benefit the company by gaining insights into different ways of doing business. Secondly, the company has the opportunity to exploit unique technology and expertise. Through engaging with a country like Belgium, there are chances of obtaining various advantageous aspects such as technology, and business ideas to expound the current status. And since the company has high-quality products and superior expertise it will have a competitive edge in the international marketplace. Thirdly, the achievement of improved return on investment is possible (Jain 2010). In this case, the company will pursue multiple benefits from exporting. These benefits include expanding customer networks and exposure to new ideas and technology. In addition, Belgium is one of the countries in Europe neighboring other developed countries and thus there is chance to study the market in the neighboring countries and determine the possibility of expansion. The company has the potential to pursue this goal also because of the following factors. The management is committed to expanding the business. The company also has adequate funding support n terms of time, resources and adequate budget for export activities. Furthermore, the company has personal expertise and commitment; the staff possesses international experience. In addition, the company handcraft products have more capability of success in the market. The company has the capability, adequate space and equipments to manufacture the products in any quantity and high quality. Implementation of recommendations As identified the authorities of Belgium are very welcoming to the investors. Hence, to enter the market will not be much difficult since there are no protectionism rules and regulations. The company handcraft products are of high quality, safe and are up to conformity measures required. The product licensing is also affordable. Due to this, the company has the choice of using the direct or indirect methods of export. Whatever the case the company opts to adopt there will ne the provision for contracts. In order to establish a good and firm market the application of the value chain concepts will be critical. The company will be in a position to recover the costs involved in operation through increased revenues and in the end there will be large profits. The export strategy is critical, and its implementation will lead to the achievement of increased gross margins and sales. In addition, the establishment of a strategic relationship between the business and other organizations is important. Reference list Jain, S. C. (2011). Export strategy. New York, Quorum Books. Mikić, M. (2012). International trade. New York, St. Martinʼs Press. Pearce, I. F. (2013). International trade. New York, Norton. Piercy, N. (2014). Export strategy, markets, and competition. London: Allen & Unwin. Read More