The two halves of exporting potential
The task
- You investigate the exporting potential of a New Zealand business in a particular market, with consultation.
- The work has four parts:
- plan an investigation — state the process you will follow
- consult — domestically first, and then internationally
- provide evidence of an investigation
- explain, then fully explain, then evaluate exporting potential
The definition that catches people
- Exporting potential has two halves:
- the export potential of the product in the offshore market — will it sell there?
- the export readiness of the New Zealand business — is this business in a position to export?
- Both halves are required. An investigation that proves there is demand in Japan for the product, but never examines whether the business could actually supply it, has answered half the question.
- The two halves fail in different ways, and both are common:
- a product with real demand, from a business with no capacity, no capital and no compliance systems
- a business that is completely export-ready, with a product nobody in that market wants
How far the investigation goes
| Depth | Consultation | Exporting potential |
|---|---|---|
| Explained | Consultation domestic | Exporting potential explained |
| Fully explained | Consultation international | Exporting potential fully explained |
| Evaluated | — | The risks and opportunities comprehensively explored |
- The international consultation is not optional. You have to consult someone offshore, in or with knowledge of the target market. Plan for it early, because it takes time to arrange and depends on people choosing to reply.
- The last step is evaluating: comprehensively exploring the risks and opportunities of exporting for that business in relation to that market, with business knowledge and business concepts carried through the explanations rather than parked beside them.
Choosing the business and the market
- The business. A real New Zealand business, connected to your life and community, that plausibly has export potential. It can be small — most New Zealand exporters are. What matters is that you can get information about it: its owner or manager should be willing to talk to you.
- It must not already be exporting to the market you pick. The business has to be one that does not currently export at all, or one that could consider exporting to a new offshore market. A business already selling into the market you choose leaves nothing to investigate: its readiness is proven by the fact that it ships, and its potential is demonstrated by its own sales, so the work turns into a description of what it already does.
- The market. One offshore market, named specifically — Australia, Japan, Singapore, California — not "Asia" or "overseas". Everything in the investigation is specific to a market: the rules, the competitors, the culture, the freight, the tariffs.
- Choose the market on evidence, not on preference. Reasonable starting criteria:
- Demand — is anyone there buying this kind of product?
- Access — is there a trade agreement, and what are the tariffs and import rules?
- Distance and freight — can the product get there in a state worth selling?
- Competition — who is already selling something similar, and at what price?
- Fit — does the business have any existing contact, ability or reason to be in that market?
- Say why you chose that market over the alternatives. That comparison is easy evidence of investigation, and it sets up the evaluation.
Planning the investigation
- Planning an investigation is a named requirement: state the process to be followed, in reference to the business and the market.
- A plan that satisfies it:
- the business and the market, and why each was chosen
- the questions the investigation will answer, grouped under readiness and potential
- the sources — who will be consulted domestically, who internationally, and what published material will be used
- the methods — interview, email, survey, desk research, agency contact
- the timeline, with the international consultation started early
- how the evidence will be recorded