Barcelona Export, the expert in leading an export group

admin on November 6, 2016

- Barcelona Export, the expert in leading an export group

What is a export group?

A export group is constituted by a group of exporting companies with complementary products that join together to open a new international market, thus sharing experience, effort and cost, while strengthening their product offering.

What are the determining factors in deciding whether to export alone or as part of an export group?

Some of the factors that we should study and that will help us to make our decision to be part of an export group are: our previous export experience, the existence of complementary products to ours, the difficulty of the target market, whether we have an extensive or reduced range of products, investment capacity, capacity to attend special orders, involvement of the management in the export project, company size, international marketing knowledge, possibility of establishing synergies and collaborations with other companies, etc.

What are the characteristics of an export group?

An export group is a voluntary cooperation between companies that have complementary products with which they can reinforce their global offer and that have defined common objectives. In addition, they coincide in time , prospecting the same final market, sharing budget and business plan. Thanks to the export group, they share costs and risk.

The main characteristics are:

1. Collaborative Structure:

  • Partnerships and Alliances: An export group is made up of multiple companies (often from the same or related industries) that work together with a shared goal of expanding into international markets. Each member typically retains independence, but benefits from collective cooperation.
  • Common Goals: The group’s main aim is to facilitate trade and overcome barriers that may be too difficult or costly for individual members to address alone.

2. Resource Sharing:

  • Cost Sharing: Members share the costs associated with international trade, such as marketing, shipping, market research, and participation in trade fairs.
  • Shared Knowledge: Members exchange information and experiences about entering foreign markets, including regulatory insights, customer preferences, and best practices in logistics or negotiation.
  • Shared Infrastructure: Some export groups may establish common logistical or distribution channels to lower the cost of transport, warehousing, and distribution in international markets.

3. Targeted International Market Expansion:

  • Market Entry: Export groups help small and medium-sized enterprises (SMEs) enter foreign markets more effectively by offering access to distribution networks, local agents, or partners already in place.
  • Geographical Focus: The group might focus on specific international regions or countries where individual businesses might not have the resources to expand independently.

4. Diverse Member Profiles:

  • Varied Company Sizes: Members can range from small enterprises to larger firms, each contributing different strengths. Smaller companies benefit from the collective marketing and market entry support provided by the group.
  • Industry-Specific or Cross-Industry: Some export groups are formed by businesses within a specific industry, while others might include companies from different sectors that share common export interests or synergies.

5. Joint Marketing and Branding Efforts:

  • Cooperative Marketing: Export groups often participate in joint marketing campaigns, including shared advertising, promotional events, and exhibitions at trade shows.
  • Shared Branding: A group may create a collective brand or logo to enhance its credibility and recognition in international markets, helping individual companies gain visibility and trust.

6. Risk Mitigation:

  • Shared Risk: The risks involved in international trade (e.g., financial, logistical, legal, and political risks) are distributed across the members. This makes entering new markets less risky for individual businesses.
  • Access to Insurance or Financial Support: Some export groups can offer or help members obtain trade credit, insurance, or government-backed export finance options.

7. Access to Support Services:

  • Expertise and Training: Export groups often provide access to training, seminars, or workshops to help members understand the complexities of international trade, including compliance, documentation, and cultural differences.
  • Advisory Services: Many groups provide advisory services, such as market research, regulatory guidance, and export planning, often facilitated by industry experts or government programs.

8. Governance and Organization:

  • Formal or Informal Structure: Export groups can be formal (with legal agreements, governance structures, and membership fees) or informal (looser collaborations without binding agreements).
  • Management and Coordination: A managing body or coordinator often oversees the group’s activities, ensuring that resources are efficiently used, strategies are aligned, and communication is streamlined among members.

9. Innovation and Continuous Improvement:

  • Market Adaptation: The group adapts to market trends and evolving international trade dynamics, providing members with up-to-date insights on consumer preferences, technological innovations, and potential growth areas.
  • Feedback Loop: Export groups encourage feedback from members to continuously improve operations, refine strategies, and better serve international customers.

10. Compliance with Regulations:

  • Legal and Regulatory Knowledge: An export group often helps its members navigate the complex world of international regulations, tariffs, and trade laws, ensuring compliance with local and global standards.
  • Standardized Documentation: The group may provide standardized export documentation (invoices, customs declarations, etc.) to ensure all members meet the necessary legal requirements when exporting goods.

11. Joint Networking:

  • Shared Network Access: Members benefit from the established networks of other group participants, including trade representatives, local business associations, and governmental trade promotion bodies.
  • Collaborative Networking: Export groups offer opportunities for networking at events, exhibitions, and trade missions, which may be difficult for individual firms to access on their own.

12. Strategic Focus on Long-Term Growth:

  • Sustainability: Export groups often have a long-term focus, aiming not just for short-term market access but for sustainable and diversified growth in multiple international markets.
  • Scalability: The collective nature of the group can provide a foundation for scalable growth, as businesses can increase exports in a coordinated manner.

13. Support from Government or Trade Organizations:

  • Government and Institutional Support: Some export groups are formed or supported by governmental trade bodies, export councils, or industry associations. These bodies may offer additional funding, training, or market intelligence.
  • Incentives and Grants: Governments and trade organizations may offer incentives or grants to encourage small businesses to join export groups and promote national exports.

What advantages does it offer?

There are many advantages and it is worth bearing them in mind: an exporting group allows you to share experience with other companies in the same sector with which you can empathise in terms of needs and problems, reduce the costs of international prospecting, increase economies of scale, reinforce the offer, have a greater impact on the channel and lower HR costs.

  1. Cost Sharing and Economies of Scale: Export groups can pool resources for joint marketing, shipping, and distribution, reducing individual costs. This collective approach allows smaller companies to benefit from the economies of scale typically enjoyed by larger firms.
  2. Access to New Markets: Export groups often have better access to international markets due to their collective experience and networks. They may have established relationships with distributors, retailers, or agents in foreign countries, helping businesses tap into new markets faster and more effectively.
  3. Risk Diversification: By being part of a group, the risks of international trade (e.g., currency fluctuations, political instability, or changing regulations) are shared among the members. This can make entering foreign markets less risky for individual companies.
  4. Improved Bargaining Power: A group of companies can negotiate better terms with suppliers, freight forwarders, and other service providers due to the combined volume of exports. This improved bargaining power can lead to lower costs for logistics, customs, and other trade-related services.
  5. Sharing of Knowledge and Expertise: Export groups often provide members with access to specialized knowledge, advice, and expertise on international trade practices, regulations, marketing strategies, and market trends. This can help businesses navigate complex export processes more efficiently.
  6. Increased Competitiveness: By collaborating with other companies, members of an export group can improve their competitive edge, as they are better equipped to handle challenges in international markets. This can lead to enhanced product offerings and more effective marketing strategies.
  7. Stronger Market Presence: Export groups often participate in international trade shows and promotional activities as a collective. This helps increase the visibility of all member companies in foreign markets, amplifying their presence and credibility.
  8. Export Incentives and Support: Some governments and trade organizations offer incentives, grants, or funding to export groups, making it more affordable for small and medium-sized businesses to explore new markets. Additionally, export groups may be able to access specialized training, trade missions, and networking opportunities.
  9. Compliance and Regulation Support: Navigating international regulations, tariffs, and trade laws can be complex. Export groups often provide resources to help members stay compliant with foreign trade regulations, minimizing the risk of legal issues or fines.
  10. Shared Logistics and Distribution Networks: Export groups can create shared logistics and distribution systems to streamline the movement of goods. By pooling resources, companies can ensure better, more reliable delivery to international markets, while lowering individual logistics costs.

In short, being part of an export group allows businesses to lower costs, reduce risks, and increase efficiency in expanding internationally. This collaborative approach can provide invaluable support, especially for smaller companies with limited resources.

Are there any disadvantages?

Like any other decision we make, however positive it may be, it will also have some disadvantages. In this case we should highlight the loss of autonomy, and the tensions derived from the different business conceptions, company image and work rhythms.

If you wish to be part of an export group, please do not hesitate to get in touch with us.