Export as a growth strategy.

With a domestic market of only four million people, the opportunity for many firms to grow is significantly restricted. This is particularly true for a business that is focusing on a small niche in the market. Once the New Zealand market has been developed to a mature stage, the business needs to either look at adding new products or services into it’s range or find new markets in order to grow.

So why take the risk of venturing offshore and where does one start?

It’s a Big World Out There.
The why is easy. It is all about opportunity and potential for growth. The world is a market measured in billions and there is no reason why more New Zealand companies don’t get out there and join those companies that have gone before them and offer their wares to the world. Once thought of as pretty much a supplier of relatively low value food commodities, New Zealand is now competitive in a surprisingly wide range of goods and services. According to an NZIER report on NZ exports in June of this year, there are over 5,000 products recognised in the international trade classification system. New Zealand exports around 2,000 of these.

Of these 2,000 odd products, NZ had a comparative advantage in 611 product groups and these products came from nearly all tradable sectors of the economy. Although food and agricultural products tended to have a higher comparative advantage, other sectors also scored pretty well. So to say that you don’t produce something off the farm and so no one would be interested in me doesn’t stack up these days.

Getting Started.
As with any sound business plan, the first step is doing your homework. Moving into export should be done on a committed basis and with the longer term vision in mind. The cultures in many markets overseas are much older and different to ours. They work on a longer time frame and expect you to also show a longer term view. A few factors to think about before you plan that first sales trip include:-

Get company-wide commitment. Every employee should be a vital member of the international team, from the owner to customer service through engineering, purchasing, production, and shipping. You are all in it for the long haul.

Define your business plan for accessing global markets. An international business plan is important for defining your company’s present status and internal goals and commitment, but it is also required if you plan to measure results.

Determine how much you can afford to invest in your international expansion efforts. Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford basis?

Plan at least a two-year lead time for world market penetration. It takes time and patience to build a consistent export division.

For help with these elements and all the other things you need to think about when considering a move into exports, contact the author: Andy Burrows at iconnorthshore@gmail.com