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You are here: Step 1: Considering exporting > The various environments you will encounter abroad > The economic environment  
The economic environment

Surveys have shown that the economic environment tends to receive the greatest amount of attention from export planners. The primary concern in analysing the economic environment is to assess opportunities for marketing the company's products abroad or possibly for locating some of the company's production and distribution facilities outside of South Africa. Indeed, when striving to identify potential countries to focus on, one of the major differentiating factors will be the differences in the economic environments that exist between potential target countries.

Decisions about how much of a product people buy and which products they choose to buy are largely influenced by their purchasing power. If a large portion of a country's population is poor, the market potential for many products maybe lower than it would be if they were reasonable prosperous. If a country is expected to enjoy rapid economic growth and large sectors of the population are expected to share in the increased wealth, sales prospects for many products would clearly be more promising than if the economy were stagnating.

Thus, if you are comparing potential countries to focus your export efforts on, you must consider factors such as the general economic outlook, employment levels, levels and distribution of income, growth trends, etc. It should be borne in mind, however, that when income levels drop, people will generally cut back on their purchases of luxury items before they cut back on necessities. Thus, poor countries which are allocating scarce foreign exchange reserves only to necessities (e.g. cheap clothing, simple agricultural tools, etc.) may prove to be more reliable markets than rich countries for certain export products.

Below are some of the economic factors which should be of interest to the exporter. To learn more about these factors, please follow the corresponding links:

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Step 1: more information

Step 1: Considering exporting
      The various benefits of exporting
      The various drawbacks to exporting
      The difference between domestic and export marketing
      The various environments you may encounter
            The sociocultural environment
            The legal environment
            arrowThe economic environment
                  Gross domestic product (GDP)
                  Disposable income
                  Demographic factors
                  Competitive and complementary products
                  Industrialised vs developing countries
                  Industrialised vs developing countries
                  Degree of government intervention
                  International trade agreements
                  Trading blocs
            The political environment
            The technological environment
            The physical environment
      The various barriers you may face
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More information on Step 1
Learning to export... The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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