3. Make economies of scale Export i

3. Make economies of scale
Export is an excellent way to enjoy pure economies of scale with products that are more "global" in scope and have a wider range of acceptance around the world (in other words, they can be used in other parts of the world without much adaptation). This is in contrast to products that must be adapted for each market, which is expensive and time consuming and requires more of an investment. The newer the product, the wider range of acceptance in the world, especially to younger "customers," often referred to as the "global consumer".
With increased export production and sales, you can achieve economies of scale and spread costs over a larger volume of revenue. You reduce average unit costs and increase overall profitability and competitiveness. Long-term exports may enable a company to expand its production facilities in order to achieve an economic level of production. (This should not be confused with increased throughput on existing capacity, as discussed above.)
4. Extend the product life-cycle
All products go through a product life-cycle. In the beginning they are novel and sales increase quite dramatically, then sales level off and they become what is referred to as mature products and eventually sales start to decrease and the product goes into decline. Now, a product that has entered its decline stage may have a life elsewhere in the world and by finding a market where this product could be sold anew, you are essentially extending the life-cycle of the product. Alternatively, even if it is a fairly common product, it may also be nearing the end of its life cycle in other overseas markets (particularly in bigger markets such as Germany, the UK and the US) and they may decide to discontinue the product. Although the market may have declined to a point that makes it uneconomical for these companies to continue manufacturing the product in question, the market may still be big enough for you to supply the declining market. This has the effect of making more efficient use of the existing factory infrastructure and other investment spent on producing the product. This extends sales, lowers the unit costs even further and may allow for higher margins to be generated. When you have a product that is nearing its life cycle, you should always strive to see if you can find a market for the product abroad.