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Export Development Plan
EMERGING EXPORTERS PROGRAM
Confidential
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Disclaimer
This document has been developed based on information gathered during
participation in the Emerging Exporters Program 2015.
This Export Development Plan (EDP) builds on the learning’s from the Program and
provides and overview of market and competitor information to help the participant
validate their business’ export program.
The information contained in this report is based on details provided by the person or
corporation attending the Emerging Exporters Program. It also based on projections
and assumptions, the accuracy of which cannot be guaranteed and are subject to
uncertainties outside the control of CVEN Inc.
CVEN therefore cannot accept any liability for any losses incurred by the user of this
Document.
© Copyright 2015 CVEN Inc.
This document has been prepared for the participants of the Emerging Exporters
Program, whose name is indicated on the front cover. Reproduction of material in this
document is prohibited without the consent of the CVEN.
Confidentiality
The contents of this document remain the property of the Business participant and
cannot be copied, released, or in any way used for any purpose without the prior
authorisation of the Business participant. All intellectual property rights remain with
the property holders.
Prepared by:
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CVEN Inc
ABN 55 857 506 141
Level 3, Suite 319
566 St Kilda Road
Melbourne Vic 3004
Contents
Disclaimer .....................................................................................................................................2
Contents ........................................................................................................................................3
Company Introduction .............................................................................................................5
Business Characteristics ...........................................................................................................5
1.1.
Company Overview................................................................................................ 5
1.2.
Business Management.......................................................................................... 6
1.3.
Organisational Chart ............................................................................................. 7
1.4.
Product Description ............................................................................................... 7
1.5.
Certifications ............................................................................................................ 8
1.6.
Capacity to achieve export objectives ............................................................ 8
1.7.
Competitive Advantages ................................................................................... 11
1.8.
Competitive Weaknesses .................................................................................. 12
Export Regulations ................................................................................................................. 12
1.9.
Commodity Codes .............................................................................................. 12
1.10.
General Import Regulations .......................................................................... 13
Market Selection ..................................................................................................................... 14
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Country Analysis...................................................................................................................... 14
Competitive Analysis ............................................................................................................. 15
1.11.
Market A – Competitive Environment........................................................ 16
1.12.
Import Tariff & Documentation ................................................................... 16
1.13.
Competitor Pricing............................................................................................ 17
International Market SWOT ................................................................................................. 17
Company Export Requirements ......................................................................................... 18
1.14.
Supply Contracts and Terms of Trade ........................................................ 18
1.15.
Export Documentation Requirements ....................................................... 18
1.16.
Export Sale Process – Flow Chart ................................................................ 20
1.17.
Initial Dialogue, Inco terms & Costs ........................................................... 21
1.18.
Q u o t e s , P r o f o r m a I n v o i c e s , & S a l e s C o n t r a c t s .............. 21
1.19.
Insurance .............................................................................................................. 22
1.20.
Banking & Foreign Currency ......................................................................... 23
1.21.
Intellectual Property ......................................................................................... 24
Export Pricing Strategies ...................................................................................................... 24
Government Support ............................................................................................................. 25
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Company Introduction
Describe your business, its history and reason for being.
Give a snapshot of the operations, processes and products.
Business Characteristics
1.1.
Company Overview
Describe your operating structure - P/L, Partnership Inc.
Where is your business located, who are the owners and how many people do
you employ?
What products do you produce ? – snapshot
Distribution or service region.
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1.2.
Business Management
How is your business managed?
What are the primary responsibilities of the business managers?
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1.3.
Organisational Chart
Insert an organizational chart.
1.4.
Product Description
Describe your products in specific detail?
Depending on what it is you sell, you might include this as a new section at 3.0
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1.5.
Certifications
What certifications do you hold?
1.6.
-
HACCAP approved production facilities
-
Specific manufacturing licenses
-
Qualifications that are relevant to your industry customers
Capacity to achieve export objectives
Domestic Experience
Describe your domestic operations and market success?
If you have international experience describe them here.
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Capacity for Growth
What are your company’s growth strategies?
Do you have production capacity, IP & systems behind the services you offer?
Explain how your operations can support growth from overseas customers.
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Supply Channel Experience
Critically important in sustaining export sales is the ability for the business to
manage its supply lines. The forecasting export demand into the production
schedule or work flows will be important as is the need to establish workable
lead times for international orders.
Impact on Cash Reserves
Sales growth means demand for raw materials or staffing and this will impact
the cash flow situation of the business. Does you financial capacity allow
increased production?
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1.7.
Competitive Advantages
The importance of identifying the company’s competitive advantage &
competitive weakness is critical in shaping the communication and positioning
strategies of the business when entering international markets.
A competitive advantage exists when a company is able to deliver the same
benefits as competitors but at a lower cost (a cost advantage), or deliver
benefits that exceed those of competing products (a differentiation advantage).
A company creates a competitive advantage by leveraging its resources and
capabilities to create an advantage that ultimately results in superior customer
value.
What are your competitive advantages?
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1.8.
Competitive Weaknesses
In the same context, competitive weaknesses stem from competencies
competitors have or can leverage better than your business.
It’s important to list your competitive weaknesses to show that you have
considered where and how you will fit in the marketplace.
Export Regulations
To obtain export approval for your products, the Australian Government may require
various approvals. What regulations and approvals are relevant to your business?
1.9.
Commodity Codes
Commodity codes are used to assess the import customs tariff on goods
seeking entry into a foreign country.
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1.10. General Import Regulations
Import Regulations may vary from country to country. Identify them and list
them here. This is general commentary at this stage.
Labeling Standards
Applicable or not? Almost all countries demand that the importer details are
displayed on the products for traceability. Consider how you might incorporate
this into your production.
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Specifying Documentation in Export Contracts
Sales Contracts are required to outline the export documentation that will be
provided with each sale. It is important that the buyer understands they have
the responsibility for clarifying the final importation requirements and checking
compliance.
Market Selection
The market selection component of the Export Plan is a significant component and
serves to validate why you are doing what you are doing. It should provide the reader
with a clear understanding of what regions were explored and why specific markets have
been selected.
It might take the following form:
1. Initial review of trade data based on the identified HS codes for your products
2. Short listing of markets based on growth and pricing information obtained
3. Evaluation of the entry and compliance requirements for each of the short-listed
markets
Consider to explain the review criteria and what elements you considered important
when evaluating a market. Such components are product/company specific but might
include:

Distance

Compliance

Competitiveness

Cultural acceptance

Traditional or new export markets for AUS products
Country Analysis
The country analysis provides valuable insights into the country’s history, culture and
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business environment. Now the specific markets have been selected, consider
identifiying key facts around these markets that are relevant to your product.

Demographics

Economic overview

Political

Intellectual Property

Legal conditions

Business Culture
Competitive Analysis
The competitive landscape in the identified markets provides insights into market trends,
historical and forecasted growth rates and importantly details on the identified
competitors.
This is another significant component of your research and is one of the most
challenging components as much of the information you will be seeking will not be
easily identifiable.
Sources can include:

Business Monitor International

IBISWorld

USDA Gain Reports

Euromonitor

Austrade

DFAT Country reports

Other exporting countries trade agencies
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Consider breaking this section up to Identify each of the chosen markets as follows.
1.11. Market A – Competitive Environment
Provide key data about this market and its potential. Discuss levels of
competition, awareness of the products and their use/demand. Who might is
the market leader, any relevant trends or environmental aspects that award
opportunities or risks in the future.
1.12. Import Tariff & Documentation
Include details on any relevant import duties you have identified along with
any specific market entry/compliance requirements that are pertinent to this
market.
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1.13. Competitor Pricing
Depending on your product or service this section can be quite detailed.
Obtaining competitor pricing structures is very challenging but the more
confidence you have in the data you have collected the more validity you will
have in your export program.
The objective here is to show that your business can compete in the market
and that your investments in developing this export program into this specific
market will return dividends to the business.
International Market SWOT
A SWOT analysis is a simple yet highly effective tool to help you identify the
strengths/weaknesses, opportunities/threats in your business. In the formation of your
export plan, it helps you to focus on advantages while identifying limitations or risks
that you need to mitigate.
When you conduct a SWOT analysis you should have an objective in mind.
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INTERNATIONAL STRENGTHS
INTERNATIONAL WEAKNESSES
INTERNATIONAL OPPORTUNITIES
INTERNATIONAL THREATS
Company Export Requirements
This component focuses on the export documentation and procedures required to
support your export program. These headings can be used to clarify your export
processes and show that you have considered the systems and procedures your
company will use.
1.14. Supply Contracts and Terms of Trade
The importance of using clear and concise sales contracts and commercial
export documents are paramount in international trade. Cultural
misunderstandings, differing expectations and the level of importer experience
each impact the export sales process.
1.15. Export Documentation Requirements
Export transactions are inherently more complex than sales made in the
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domestic market. Differing payment instruments, variations to packaging,
labeling, delivery terms and agreed documentation are important and need to
be specified and agreed to by all parties.
For this reason, all export transactions should include at a minimum the
following:
1 – Quotation or Proforma Invoice – which acts as a formal quotation
confirming the price offered, lead time, payment terms, delivery terms, labeling
and documentation to be provided with the sale.
2 – Contract of Sale – confirmation of the sales agreement as a whole. This
document outlines the detail of the sale and each parties responsibilities to
complete the transaction. Details of the agreed packaging configuration, the
shipping and delivery dates, payment terms & due dates,
documentation/certification, price, quantity, destination and any other
elements agreed to in the negotiation.
3 – Commercial Invoice, Packing List and Shipping Declarations – used
by freight forwarders and importers as a declaration as to the consignment
being transacted.
This section provide you the opportunity to confirm these document templates
have been developed and are part of the exporting process your business has
developed.
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1.16. Export Sale Process – Flow Chart
Initial Dialogue
Inco Terms & Costs
Proforma Invoice /
Quotation / Export
Sales Contract
Confirmation /
Acceptance
• Understand the product requirements from the customer and validate their sales channel,
suitability and experience
• Send company profile and export product range.
• Send export price list once satisfied with buyer bonafides
• Consider the freight options and decide on a suitable delivery/production plan and inco terms
(FCA, FOB, CIF etc)
• Note that the price list will include MOQs.
• Buyers may seek to negotiate variations to this minimum requirement
• Quotes EXW (ex Works) should be avoided when selling goods internationally
• Construct an Export Sales Contract to formalise the details of previous email discussions
• Construct a Proforma Invoice or Quote as required
• Ensure the requirements of both parties, leadtimes and export documents are clearly specified
and agreed to in the documentation
• Receive confirmation from the buyer and await deposit payment PRIOR to undertaking any
production arrangements
• All leadtimes are stated as being from "confirmation of order" which means payment
• When confirmed, advise the Buyer and begin production/despacth in line with the agreed terms
• Commercial Invoice
• Packing List
• Non Wood Packing Declarations
• Shippers Letter of Instruction
• Certificate of Origin
• Any additional documentation as agreed in the export contract
Export
Documentation
• Prior to the release of any cargo, payments must be finalised as agreed in the sales contract
Despatch of Cargo
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1.17. Initial Dialogue, Inco terms & Costs
Similar to domestic transactions, a quotation is an offering from your business
to a buyer. The difference with international quotations is the detail
surrounding the terms of the sale and at which point the transfer of ownership
is to occur.
Quotations
Quantity and product type
Any modifications necessary to meet the buyers import requirements
Delivery requirements – destination and incoterms
Payment terms confirmed – xx% on order balance prior release etc.
Inco Terms are a set of internationally accepted terms that identify at what
point ownership of the cargo transfers to the buyer. This is critically important
for not only does the title of the goods transfer, but also the risk associated
with the transportation and delivery of the cargo.
Payment Risk – It is important to understand the concept of payment risk in
international trade. It is costly to obtain money from a person or persons based
in a foreign country and operating under a different legal system.
Payment terms are often a source of negotiation in international trade and
should be well managed. Rules around payment need to be set from the
beginning and should be strictly adhered to.
1.18. Quotes, Proforma Invoices, & Sales Contracts
Quotations - as required.
Proforma Invoices - A proforma invoice is more like a confirmed purchase
than an invoice. It confirms the agreed details of the transaction but it is not an
official invoice.
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Sales Contracts - Similar to a Proforma invoice, a Sales Contract confirms all
the negotiated details of the sale. The sales contract is the key instrument used
to confirm that both parties understanding the transaction. It is the document
that must be adhered to in any sale and forms the basis of the agreement
should there be a dispute.
At a minimum it will specify:
-
The parties to the transaction
-
The goods being transacted and their agreed price
-
The packaging details
-
The payment terms
-
The delivery terms (Incoterms) and lead time
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The currency
-
The documentation being provided with the transaction
1.19. Insurance
Insurance forms an important part of doing business internationally and needs
to be considered as part of the business’ export development. As with
business in Australia, some insurance is considered mandatory to safeguard the
business. Other insurance policies are optional and implemented when the
business wants to offset an identified risk in its activities.
Common International insurance requirements are:
Marine Insurance – Covering goods at sea or in transit to a foreign
destination
Trade Credit Insurance – Covers accounts receivables for protracted default,
bankruptcy and insolvency.
Product Insurance – Product liability insurance
Specify the insurance policies your company has in place to support your
international development.
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1.20. Banking & Foreign Currency
Payment for goods and services in a currency other than AUD is common in
international trade. One party is almost certainly going to need to engage in
foreign exchange.
Such transactions add a layer of complexity to a sale that is not experienced
when selling products in the domestic market.
General concepts for working with foreign exchange are:
-
A facility must be established with your bank prior to any transaction
being undertaken
-
An exchange rate MUST be confirmed with the bank and used as the
basis to cost the sales contract
-
Where the contract will be paid at a future point in time (i.e under a
negotiable instrument such as a letter of credit), an exchange rate can
be obtained for this future date. It will provide certainty in the
transaction and reduce any foreign exchange exposure.
Here you should specify in what currency your company will trade and if
required, how you will handle any foreign exchange risk.
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1.21. Intellectual Property
Trademark and brand name registration can be extremely important. Similarly,
when the brand is introduced to foreign markets, consideration should be
given to who owns the trademark in the foreign market.
Export Pricing Strategies
Discussion of the export pricing strategy you have decided on and why. Provide details
of the discounting procedures you may wish to use and any additional ‘market support’
you intend to offer to support your products penetration.
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Government Support
All levels of the Australian Government are highly supportive of your company’s export
development. This component allows you to communicate the support and engagement
you are leveraging.





Grants
Trade Missions
Inbound Tours
Government in-market advisors and networks
Industry Associations
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