A Guide on Starting MSME in India - Part VIII
How to enter foreign market?
Expanding into international markets can also be a powerful boost to your business’s bottom line. This is a way of growing your business that requires quite a commitment of time and resources, but can be extremely rewarding.
Exporting takes time and effort. It also takes resources and a strong commitment to compete beyond your current borders. The secret to export success is preparation and a carefully researched export plan. This is your source of direction as you embark on your journey into foreign markets. An export plan helps you to act – rather than react – to the challenges and risks encountered in international business. And in addition to helping you implement your export strategy, it can help you obtain financial assistance, investors or other strategic partners required to make your export venture a success.
An export plan comprises many elements – a description of your company, its market and industry, and your business objectives; information on your products or services; an analysis of the target market and industry, including trends and forecasts; an examination of the competition and their strengths and weaknesses in contrast to your own; international marketing strategies, including customer profiling and the development of sales and distribution channels; employment and training issues; financial requirements and forecasts; and much more.
Thorough market research helps you make sound export marketing decisions by giving you a clear picture of the economic, political and cultural factors that affect your ability to sell your product or service. Ultimately, market research saves you time, money and effort by reducing your exposure to unknowns.
There are many market entry strategies. These strategies can be grouped into three categories. Direct exports, as the name implies, involve direct marketing and selling to the client. But in less familiar markets, with different legal and regulatory environments, business practices, customs and preferences, direct exporting may not be an option. A local partner, for example, may be better able to manage these complexities and serve your potential clients better.
Indirect exporting is frequently used to enter new markets. Businesses selling products enter into an agreement with an agent, distributor or a trading house for the purpose of selling (or marketing and selling) the products in the target market. Due diligence is critical when selecting an agent or distributor for indirect exporting.
The third market entry strategy involves strategic partnerships with other companies or individuals with complementary skills and capabilities. A partner can often provide the insight, contacts and expertise that fills the gap in your export readiness. A strategic alliance with a company selling a complementary product or service can provide more effective market access, resulting in more foreign sales in less time.
Every market has its own set of rules and regulations covering safety, health, security, packaging and labeling, customs and duties among other things. Additionally, these rules and regulations may vary depending on the product or service you are exporting. It is critical that you understand the rules and regulations that apply to you before you ship your goods or open your foreign business location. Product-based businesses with shipping requirements will benefit from developing a relationship with a freight forwarding company and a customs broker. Whether you are shipping by truck, rail, sea or air, the documentation will likely be extensive and potentially confusing. The services provided by these businesses will assist you in determining the most efficient and least risky options for shipping your goods across borders.
Import / Export
The Directorate General of Foreign Trade (DGFT) in India and its regional offices under the Ministry of Commerce governs import exports. Authorised dealers may freely extend letter of credits and send remittances for imports. Import export procedures are much more relaxed compare to the past restrictions and the Government of India is in the process further relaxing the norms so as to make import export in India globally competitive.
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