Market Penetration: The business should be able to identify potential buyers which match the target market criteria. For example, the Kerry's Group acquisition of food ingredient companies in the US market.
Low Levels of Competition: This should make it easier for the company to get established in the market and gain market share. When Ballygowan entered the spring water market there was little or not competition within the Irish market.
Premium Prices: This will enable the company to charge customers a premium price which is a competitive advantage for the business. For example, Waterford Crystal charges premium prices for its products in foreign markets.
Competitive Advantage: The business should be able to build up a sustainable competitive advantage based on the market knowledge that it familiarises itself with.
2. What is the sales process and buying cycles in the target export market? .
The business will need to research the buying process operating in the target export market. This research should outline the stages involved from the initial inquiry to actual purchase. The business should seek ways of reducing the number of steps in the buying cycle in order to maximise their profit margin. A long buying cycle would obviously have a strong negative impact on cash flow.
3. Who are the main competitors and what are their weaknesses?.
A business will need to establish who are the main competitors, their size, product range, financial capabilities, pricing policy, product functionality, customer support and use of distribution channels. Since the BSE crisis the Irish beef sector had to re-evaluate its competitors and has had to open up new export markets.
Barriers to Entry for SMEs to the International Market.
1. External Barriers .
Financial Problems.
These problems include currency devaluations and the high cost of capital in foreign markets. All exporting businesses are at risk to currency fluctuations.