Export and strategy, the factors to conquer the market

Export and strategy: how to identify the best international markets to expand your business beyond Italian borders successfully?

At this particular time, which is still affected by the economic crisis due to COVID-19, the rising cost of raw materials and geopolitical conflicts, exporting is an option for many companies in every sector to consider in order to diversify risk and maintain good revenue.

What are the most popular export business areas today?

According to Istat, the following increased in September 2023. exports outside the European Union, of consumer durables (+6.5%) and energy (+2.5%).

These are not the only areas of interest; exports continue to grow globally, aided by the rise of an increasingly global and digitized market.

In fact, according to the Economic Observatory of the Ministry of Foreign Affairs and International Cooperation, Italy ranks sixth among the leading exporters on a global scale. In 2022, our nation reached a total turnover, related to exports, of as much as 624,710 million euros.

This is a sizeable number, which makes one realize the importance of foreign sales to our country's economy. 

Export, the need for a strategy that can meet every challenge

Many companies face the increasingly fierce advance of competitors even on an international scale.

Therefore, trading beyond Italy will become increasingly crucial for those who want to do business in the future, getting the most out of their business.

The Ministry of Foreign Affairs and International Cooperation summarizes the three main benefits associated with exporting:

• Growth: SMEs that diversify their markets grow at higher rates;
• Competitiveness: operating in different countries allows companies to accrue additional skills;
• Profitability: trading in several countries, allows for a better ROE than companies that trade only in Italy (13.9% compared to 9.6% for the latter). 

Despite the advantages, the process of internationalization however, cannot be the result of improvisation, but the result of careful analysis and research as well as judicious strategy.

There are more questions to ask about this, but one of the first is to determine what is the most effective method of achieving success in international markets. 

How to prepare for an export process, starting with choosing the right products 

One of the first steps in a winning strategy is to identify the product(s) to be targeted by the foreign sale.

There must be demand for such goods in the target countries, and there must be assurance that the goods comply with the relevant regulations in the target nations.  

At the same time, the countries in which we intend to offer products must be purposefully chosen.  

Distribution channels deserve further consideration and careful planning to avoid delivery delays and excessive costs.

In this sense, the figure of a International Advisor within a company that wants to expand its business boundaries, it can be critical to expanding its business decisively.

Such a role can in fact analyze the best tools to deploy, as well as methods and strategies, and identify where to target their proposals, getting the best results. 

It can also shed light on what results are desired and achievable by assessing every aspect of the company and its potential, establishing the basic assumptions of the export process. 

Indeed, it is not reasonably possible to achieve success and profit if you do not have the right mindset to open up to new markets and new customers. 

Pertanto, è fondamentale comprendere come affrontare l’internazionalizzazione della propria azienda, con il fine di acquisire tutti quegli strumenti innovativi che permetteranno di far penetrare in modo significativo il proprio business in altri paesi.

The essential steps to conquering new markets 

Before delving into market research and target country identification, it is a good idea to conduct a SWOT analysis of your company (strengths, weaknesses and what your value proposition consists of) by determining what sets you apart from your competitors.

Next, the destination country must be identified: 

• economic growth;
• request for the company's products 
• geographical and cultural proximity;
• Any duties and certifications.

are just some of the variables that need to be thoroughly analyzed to understand the potential of product exports in one or more target foreign markets.

Having determined the target countries, we delve into their analysis by determining competitors, potential leads and the famous 4 P's of marketing (product, price, promotion and place).

Finally, once the research phase is completed, the model of internationalization more appropriate. 

The analysis performed already provides guidance as to which model to adopt, but the final choice is also based on two other key variables: investment grade and risk appetite. 

With these elements in mind,

• Direct or indirect export: in the former case it is the company that handles sales directly, while in the latter it uses agents or distributors. For short periods, one can also rely on a Temporary Export Manager. It represents the simplest, lowest risk and investment model.
• Strategic partnerships: in this case, these are collaborations with local partners
• Opening companies abroad: this is the highest risk and investment choice, but allows full control of operations,

These are the key factors, to embark on an export path supported by an appropriate strategy. 

Then there is a further need that the company will have to address if it wishes to consolidate its presence in a foreign economy in the long run: not only to study the current market, but also to try to forecast its possible trends, possibly modifying its export strategy.

In fact, the latter is not a static element, but a potentially ongoing process that will enable the company to establish its brand more and more, through the most effective communication to express the value of its business proposition and achieving full customer satisfaction, having proactively intercepted their preferences.

Export, strategy and timing

Per un’impresa che vuole esportare le proprie merci all’estero, è necessario stabilire obiettivi tangibili in un periodo di tempo congruo.

This factor is essential for both the proper setting of the project and its completion. When you set too ambitious goals with too short a time frame, you may think that you do not have the qualities needed to succeed in international markets or that you have done something wrong. In reality, with respect to the set expectations, it is only necessary to give time to the results so that what has been done produces the right brand statement and brings the right gains.

Conversely, underestimated goals with too long a time frame risk making the project unprofitable and not getting the most out of it, with negative consequences for the brand.

If these concepts are embraced, all subsequent decisions, from strategy to useful business actions to acquire new customers, will go in the right direction, successfully conquering new markets. 

Octagona, through its team of vastly experienced professionals, can help your company seize every opportunity to successfully approach international markets, consistently and sustainably.

See our case studies and contact us for information on everything we can do for you, your business, and the growth it deserves.