BUS 616 Exporting and Growth for Small Business

Topics: International trade, Export, Import Pages: 6 (1187 words) Published: May 22, 2015

Exporting and Growth for Small Businesses James Ward
BUS 616 International Businesses
Dr. Iweka
April 13.2015

The opening case explores how three small companies that is Morgan Motors, Malden Mills, and Wadia have fruitfully improved their trades and profit margins through exporting their products to foreign market. Morgan Motors, a company that manufactures sports car in Britain exports almost 70 percent of its products overseas. Wadia, a Michigan-based company that produces high-end compact disc players, relies on exports for eighty percent of its sales output. Malden Mills firm on the other hand is an American based company that manufactures high technology textiles. In the year 2006, the company earned its sales from exports. Malden Mills, the maker of Polartech, a great technology fabric used in loftier priced outwear, tackled a different type of task than Morgan Motors and Wadia. Though the latter two companies created specialty stuffs for small market functions, Malden Mills made a difference and produced a product for a superior market, but a market that was in weakening thanks to globalization and the occurrence of low cost manufacturers in countries that are still developing. Malden Mills, and the South Carolina Export Consortium, looked into new opportunities for its product and gotten a loan from the Export-Import Bank that permitted the firm to utilize its capacity in a better way and improve its markets especially the exports. Benefits of Exporting Products for Companies Export sales are of critical importance to some small companies like Morgan Motors and Wadia. As of their small local markets, every companies need export revenues for the company to survive. Morgan Motors, in an axial, ships almost or more than 70 percent of its production abroad because it’s local market that is based in the United Kingdom is too small to make adequate sales. A situation like that also happens for Wadia, a maker quality priced compact disc entertainers. The market position for the accessories in Wadia’s national market of the United States is too minor to support the company that forces Wadia to expand globally. Wadia mainly relies on exports and it can be rated at approximately 70 to 80 percent of its total sales. Morgan Motors and Wadia both made the assessment to export for parallel reasons. Morgan Motors produces sports cars for a very insignificant market position. The size of the market position in Britain is very small for the company to endure, so Morgan had to get bigger into other markets purposely to remain in business of making sports cars. On the other hand, Wadia produces high quality priced compact disc players for audiophiles. Their goods are so specific in a manner that just 20 percent of its total sales come from the homeland marketplace. Students will undoubtedly recognize that for both of these companies existence meant foreign enlargement, and that by aiming similar positions in foreign markets, they could expand their sales at a recognizable state. Impediments in Exporting Success A big weakness to exporting is simply the lack of knowledge of the opportunities offered. Other mutual weaknesses include poor market examination, unhealthy understanding of competitive circumstances, lack of customization for domestic markets, poor distribution plan, poorly performed promotional awareness, problems acquiring financing, underestimation of the dissimilarities and expertise needed for foreign market through way, underestimation of the amount of paperwork and procedures involved. Companies can take the following steps to improve their likelihood of succeeding in export marketplaces that is: Exporting firms need to identify market opportunities

deal with foreign exchange risk
navigate import and...

References: Lefebvre, E., and Lefebvre, L. (2000). Small and Medium-Sized Enterprises, Exports
and Job Creation: A Firm Level Analysis (Industry Canada. Paper No. 26).
Ottawa: Research and Publications Program.
Fugazza, M. (2004). Export Performance and Its Determinants: Supply and Demand
Constraints. Study No. 26. Geneva: UNCTAD
Harless, A. (2006). Exports, Imports and Wages: What Trade Means for US Job
Quality. Washington, DC: Center for National Policy.
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