External Expansion Limited

Thursday, 13 February 2014

DISADVANTAGES OF INTERNATIONAL TRADE

Although consciously prepare to export our products, there are issues that are not predictable and greatly affect our international business opportunities. We propose to meet some of them and get an idea to anticipate these problems.

At the time of preparing the company in order to export products abroad, we follow a series of steps we overcome obstacles that prevent the entry of our products to the destination country.

There are a number of guides that tell us how to prepare our product to ensure that your marketing out of our borders. Among the first things to keep in mind is that we must understand that the name of our product is to mean the same in the destination country than in ours, not to mean or represent something else, totally wrong within the country. We should also verify that the colors of the packaging or the product are usually accepted and not collide with the beliefs of the destination country, as well as, its design and presentation must conform to what customers from that countries can expect from the product that you offer. The size or quantities of the product are things to consider, as it is not the same form and amount used in some countries than in others even talking about the same product. The details and product description must conform to the legal regulations of the destination country, in terms of the measurement systems according to weight, volume, quantity, density, etc., As well, to the languages, to be printed on their labels or references .

All these preparations are directly related to the uses and customs of each country. To export must anticipate, understand and appreciate the tastes and preferences of end customers abroad. Will adapt our product packaging is required there, not believing that because in our country it is highly accepted in foreign countries too. Adapt the product to use in the destination country, as it may differ even in small details. We will guarantee to meet the functional requirements of product quality in terms of customer service and environmental effects that may cause our product in the country of destination. Obviously, we will avoid many of these points, if we start exporting our product in countries that accept such.

Once all these preparations they are made, we will have invested much time and money, but also know when we will recover these investments. But what nobody tells you is that will be this only without change in the backdrop, but this is rarely the case usually, less in a globalized world, as there are variety of changes that do not control that affect our intentions in international trade.

Although we believe that all these previous steps, to make our product be exportable, are an inconvenient, since it involves a number of changes that cost time and money to guarantee us success, they are not, because we can control and is in our hands make feasible .

Meanwhile, there are a number of factors beyond our control, these factors are primarily macroeconomic, but significantly affecting microeconomics and are truly inconvenient that are not available to anticipate or solve our hands. So we understand, changes in government decisions affecting international markets, affecting specific individuals activities.

A clear example is when a country decides to devalue their currency, therefore, their products become more competitive in price towards foreigners. If we are exporting to the country that has decided to implement a monetary policy as described, will affect us to some extent. It is important to diversify our exports or imports always trying to sell or buy in countries with some stability, but never stop being subject to an exchange rate that sometimes we can be favorable and others less so.

Another drawback is usually that some countries do not invest to improve the international marketing of its products, either because they do not have adequate infrastructure such as main and rural roads of good quality, or because they lack fast customs arrangements, and processes of health control does not duplicate and efficient, which leads to significantly harm all delivery times and commitments to our overseas buyers, as well as in case of perishable goods, these issues have a clear and measurable impact on the quantity and quality of deliverables.

The regional free trade agreements between countries, neighbors or not, although at first we can benefit from them, over time, as a result of the changes and evolution of markets, governments and policies, may also potentially affect our exports. Many times we can find regions in terms of economic production, which reach not incorporate such integration for the purpose of trade negotiations, the end being a disadvantage. In many cases, large integrated production chains for business to business and integrated financial systems for these markets, forgetting or delaying the integration of people, because by putting obstacles to cross borders slows economic development. This requires that there are clear and transparent schemes of labor mobility, not only for workers but also for employers.

For more information or requires related services in this article, please contact through our website www.externalexpansion.net or directly to our email info@externalexpansion.net.

Until the next article...

Leonardo Dufau 
LinkedIn

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