EXPORTING OR INTERNATIONALIZING (I): THE IMPORTANT THING IS THE STRATEGY

We already know that one of the ways out of the Spanish crisis for our companies is to export, but how can this be achieved?

One of the most important aspects to achieve international success is to first understand that selling abroad is a process, a path that must be followed with a firm step and a long-term mindset. Moreover, success does not even consist of exporting, if we understand it as one or several isolated sales, since in order to succeed in the international environment it is necessary to consolidate the brand in each territory, make it known and move forward with it and with the needs of consumers in each country. Exporting is selling, internationalization is being there, having a presence, and being a company integrated in the target market.

Internationalization is a long-term strategy that requires a great effort from companies to change their mentality, train their teams and increase their productive, financial or logistical capacity to be able to meet the increase in sales. The ultimate goal could be to move production centers to the destination country and manage all commercial or administrative tasks from there, although this will depend on the sector. For example, a wine company that sells in China will not be able to move its production to that country and produce the same wine, or another that moves to a country where production costs are higher than those in its own country and are not offset by the cost of transporting the products.

Starting down this path is always difficult. The steps prior to launching into foreign markets require an open mind and the firm decision of the entire organization (especially the commitment of the management) to provide the necessary means and not to give up in the long process of internationalization. It is necessary to create a trained and motivated team that understands that selling abroad does not mean internationalizing, and that sees the process as an opportunity for innovation, efficiency and constant improvement in products, services and procedures.

In addition, a powerful structure (commercial, productive or logistical, among others) is essential to be able to meet needs that are expected to increase. And this structure must be open to innovation, since going beyond the borders will increase the demands on the company due to the increase in competition and market players.

In fact, many theories suggest that efficiency gains in exporting companies are the cause, not the consequence, of exporting, indicating the importance of working on the company’s foundations, long before making the first international sale. Specifically, a 2011 Bank of Spain study states that “this superior performance (referring to exporting companies performing better in terms of productivity, innovation, size, etc.) would be present before those companies exported, i.e. exporting would be the effect, not the cause of a given company’s competitiveness“.

In future articles we will continue to discuss the implications of the internationalization process on the growth of companies, and the aspects to be taken into account in this process.

Original source:

First issue:  “Exporting or internationalizing (I): The important thing is the strategy” byLaura Arribas.

Second delivery: “Exporting or internationalizing (II): First analyze, then attack”

Third installment: “Exporting or internationalizing (III): “Ways of accessing the market”

Fourth installment: “Exporting or internationalizing (IV): “Branding is key”