The top 10 factors that hinder exportation include lack of technology to boost competitiveness, high-cost funds to finance export transactions, lack of government incentives to support exportation, the reluctance of banks to fund export businesses, lack of skills to handle complex paperwork involved in exportation, unstable exchange rates, high tariff, and non-tariff barriers, lack of support from government institutions, high cost of doing business which make products to be uncompetitive and inability to meet the quality requirements of the export markets.
From the listed barriers that confront a business that wants to internationalize, it is highly imperative for any business that intends to explore the opportunities in the export market to also be ready to manage the challenges and also mitigate the risks. This has led to the concept of internationalization readiness or export readiness.
What is ERA(Export Readiness Ability)?
Export readiness is a business potential that enables an organization to move from local operations to operating in foreign markets.
Definitions of Export Readiness
From 1990 till 2014 different kinds of definitions were defined by different authors and organizations such as Cavusgil (1990), Liesch and Knight (1999), Van and Viviers (2005), Tan et al (2008), and USAID (2009) about export readiness in different parts of the world, they all agreed to the fact that to explore the opportunities in the export markets, there are basic qualities or characteristics that such a business must possess. However, if these qualities are absent in a business, such an organization is deemed to be unready for internationalization or selling in markets abroad.
Export Readiness Assessment Factors
Various work has been done in different parts of the world by different authors to identify the factors that must be considered by a business before such a business can be deemed export ready.
The various kinds of literature review on the challenges that created barriers to internationalization plus the ones on the concept of export readiness highlighted several factors. These were collated and analyzed by the author to arrive at a model called the 15Ps of Export Readiness Evaluation Criteria. The factors listed in this model are very comprehensive and have significantly improved on the areas of the weaknesses or areas not covered by each of the reviewed literature.
The 15 factors are promoter, products, pricing, predisposition, purpose, promotion, proficiency, production, payment, positioning, partnership, purchaser, people, paperwork, and potential.
