THE DIAGNOSIS POTENTIAL OF EXPORTATION

Contact: Javier de Vicente Fernández, Net Craman Abogados
Posted Mar 4, 2019

During recent years, the administrative bodies of companies have searched to supply the decline of the internal demand of the national market and they have found the remedy to be able to maintain the level of sales, expand their business and ultimately to improve their income statement.

To start a process of globalisation implies the assumption of a long-term compromise in which the company, with the intention of becoming globalised, should undertake prior analysis both internal and external depending on what product/ service is exported and market destination. Not all the companies are willing to conduct this internal analysis, that is to say, a lack of knowledge of their existence or to have false security in their exporting capacity.

In order to successfully complete the globalisation process, it is necessary to know the company’s export potential from the beginning. This export potential is measured through the Diagnosis Potential of Exportation (DPE), an evaluation system which is capitalised by a set of four factors, two internal (company and staff) and two external (industry/ market product) which, in turn, is divided in to five elements for each one of these (product appeal, degree of barriers, available resources, strategic match, level of flexibility, etc). Once the five elements from each factor have been analysed you gain a qualitive score which allows, following the application of a series of variables, to gain a vision of the globalisation process on the whole, from the point of view of the company and see if the company is able to face up to it, what weaknesses exist and what internal aspects must be strengthened and/ or worked on before the start of the process.

The DPE should be seen as an essential requirement before taking the decision to globalise, as it will equip the management team, and ultimately be responsible for the success or failure of the globalisation, for the tools and necessary knowledge of certain aspects of the company, so that these strategic areas can be reinforced in order to appropriately deal with the difficulties that globalisation entails.

With that in mind, the DPE is a very useful tool in order to know the starting point of the company in the globalisation process, providing valuable information which will significantly reduce the risks, both economic and of image, and possible failures, that, in the medium-long term would end, with a high probability of negatively affecting the company.

Net Craman Abogados has a lot of experience in the globalisation of Spanish companies in foreign markets. Thanks to our offices in Asia and South America , we can give legal advice with a joint vision and a global perspective to companies about their globalisation, either in an initial phase through the implementation of DPE, in the intermediate advisory phase, in the distribution and/ or agency phase, or in the final phase, providing support with the physical implementation in the country in question through the opening of subsidiaries and/ or Joint Ventures.