Why should a company want to export?

Reactive or Proactive Exporting

All Zimbabwean companies which have so far sent their products to international markets, either ventured into exporting for proactive or reactive reasons. Proactive exporting entails planning for the activity and making some necessary investments in resources and time. Reactive exporting is a result of being pushed by circumstances, especially in the Zimbabwean domestic market, to go into exporting without careful considerations. Zimbabwean companies who proactively plan to participate in exporting business are, in most cases, better positioned than companies that simply react to environmental factors. In this blog, I recommend all the companies SMEs or large corporate companies to adopt the proactive exporting, as the approach breeds sustainable export development. If one company simply reacts, mistakes can be done, as the managers will be pressed for time and resources.

Benefits of Exporting

There are several benefits of successful and proactive exporting and these are, but not limited to, the following:

• The Zimbabwean market may not provide the opportunity for growth that the company needs, as the products may not be fast selling. There may need to raise foreign currency to increase your plant’s capacity. Developing export markets is just as important as developing new products for growth purposes.
  
  
• Participation in an international environment may sharpen on Zimbabwean companies’ innovative skills and open up opportunities that might never come your way if you limit yourself to the Zimbabwean market.
  
  
• Zimbabwean companies need to diversify their markets. They should not live with an illusion that everything that they produce will be absorbed forever by the Zimbabwean market, especially with the current excess demand. Any Zimbabwean company should be looking for the increased security they can achieve by spreading potential risks over a variety of markets. Putting all eggs in one basket can expose companies to more risk, but by selling products in a number of international markets, Zimbabwean companies can reduce their exposure to economic downturns in any one of the markets including home market.
  
  
• Operating in an environment of excess demand of some goods, which is characteristic of the contemporary Zimbabwean market, may result in production of sub-standard quality goods. Zimbabwean companies need to ensure that they expose their markets to international competition before the competition comes to the home market, by exporting their products.

Having said all of this, the management of the company should not simply assume that the successful Zimbabwean product will start selling in any international market. There are many more factors which need to be considered. Find out how we can help each other to build your exports by identifying these other factors, in subsequent posts.