Exporting is a growth strategy used by companies—whether due to the limited size of the domestic market, because they’ve reached a saturation point locally, or because their products meet international standards with minimal adaptation.
There are also companies that target specific markets that are highly receptive to national offerings but still underdeveloped within the country. This increases the need for businesses targeting those markets to develop international expansion strategies, often regardless of the development stage they’re currently in.
In our consulting experience advising on commercial matters and developing internationalization plans for companies across a wide range of sectors and industries, we frequently see that the need to boost sales—which is what ultimately drives the export process—tends to obscure the fact that there are key strategic elements that must be addressed. These elements also help consolidate the company’s performance in the local market.
These are essential aspects that touch on the core of the company: its purpose, long-term vision, and reason for being—which often cannot be fully assessed or defined in the rush of daily operations. This highlights the need for a commercial planning process before designing any action plan abroad.
This process involves several steps or levels of analysis:
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Thoroughly analyzing the company’s current situation, identifying weaknesses and strengths, especially in the commercial area and in light of the export process.
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Designing a value proposition for a specific market segment, determining the desired positioning for that segment, and setting clear objectives.
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Defining key variables to achieve those objectives (action plan), such as products/services, pricing, communications, and distribution channels.
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Projecting income and expenses related to those objectives, executing the plan, and setting tracking and performance indicators.
The overarching idea is that the international expansion process should be developed in a planned and structured manner, arising from the strategic reflection of partners, owners, or directors, as applicable.
Mission, Vision, Values
As a starting point to define the company’s unique characteristics—those that shape its positioning—it's necessary to establish the concepts of mission, vision, and values, if this hasn’t already been done. This will foster reflection, discussion, and clarity around foundational ideas.
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The vision indicates where the company wants to go.
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The mission explains how and why it will get there.
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The values ensure the company is on the right path to do so.
Value Proposition
This is essential for identifying what makes the company’s offering different from the competition.
A value proposition can be defined as what the company is capable of offering a customer segment to solve a specific need. It is something the company does well and for which there is little—or ideally no—competition doing the same.
To define this proposition, it’s critical to understand the competition, pricing, teams, and quality of offerings in depth. On an international level, this involves researching accessible information sources such as trade offices, industry reports, online research, and more—which requires contacts, knowledge, and resources.
In today’s environment, social media plays a crucial role in accessing not only competitor information (products, prices, features), but also in understanding potential customers and their needs and opinions (co-creation).
The company should be able to answer: What can we offer that’s different?
The answer to this will determine the competitive advantage and shape the company’s positioning—meaning the space it occupies in the customer’s and broader community’s minds.
It’s important to find ways to specialize—targeting a niche that no one else is serving—and focus on doing something very specific, very well. Specialization eliminates much of the competition, allows for more concrete and effective commercial prospecting, and helps build authority in a given field.
This goes hand in hand with the customer segment and is a simultaneous and iterative process: the better we understand the segment, the more tailored the value proposition; conversely, limitations in the value proposition may prevent access to certain segments.
Target Market Segmentation
According to our consultancy, this is the most fundamental task—it allows the company to understand what the market actually demands. The output of this task is identifying who the customers are and understanding their characteristics.
This is an analytical, research-driven process using formal techniques. Given the evolving nature of any business, this should change over time as new customer segments emerge, new interests arise, or the company introduces new products or services.
Objectives
Objectives are a central part of the plan. Everything before them leads up to defining them, and everything after should aim to achieve them.
Marketing Plan
This involves defining strategies for the key marketing variables: product or service, pricing, communication, and distribution.
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Product/Service: What will the company focus on offering? Branding (name, logo, etc.) is part of the product/service definition.
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Price: What is the goal behind the set price? Is the aim to be the cheapest? Or to be the highest quality? This connects directly to the desired positioning.
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Price setting must consider internal factors (e.g. total costs) and external ones (e.g. competitors, market specialization, customer type).
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Communications: Identify the best ways to reach your target audience—traditional and digital media, messages, content, frequency. Social media is a key element of this strategy.
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Channels or contact methods: How will the company reach and interact with its target audience?
For each of these four variables, the company must define guidelines and action steps that align with its value proposition and target market, and that help achieve the established objectives.
Action Plan
Once strategy and tactics are defined, a specific action plan should be laid out for the relevant period—ideally short term, with weekly action items.
Financial Projections
This involves forecasting sales, costs, and financial indicators for the chosen timeframe. While projections always carry a degree of uncertainty, they are essential for executing the commercial strategy.
It’s common for a successful export process to strain a company’s financial capacity, as it may not be prepared to meet the resulting demand levels. This can lead to what we call a growth crisis, whose negative effects can spill over into the company’s internal operations. That’s why it’s critical to forecast potential sales volumes and plan financial leverage strategies to handle significant sales increases.
Monitoring and Control
It’s necessary to establish how often progress will be monitored, what types of follow-up will be conducted, what control mechanisms will be used, and who will be responsible for executing them.
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Lic. Stefania Scarone – Managing Partner, G&S Consultores
Lic. Verónica Griffin – Managing Partner, G&S Consultores