Chapter 12Assignmentp. 354 Review questions 3 E 9(3) What are four caveats that exporting SMEs would do well to observe when developing their export strategy? Discussion.The term export means to ship goods and services out of a country's port. The export of a good occurs when ownership changes from resident to non-resident. Export methods include a product, good, or information sent by post, hand-delivered, shipped by air, shipped by ship, or even downloaded from an Internet site. When an SME considers exporting abroad, there are four caveats it should observe when developing its export strategy. The four caveats that exporting SMEs would do well to observe when developing their export strategy are: (1) initial entry should be small scale to minimize risk, (2) offer a minimum number of product lines until a foothold is established, (3) hire and engage local staff within your organization as early as possible, and (4) consider the degree of difficulty in reducing bureaucracy when developing your export strategy agency. First, exporting SMEs would do well to ensure that initial entry should be small-scale to minimize risks when crafting their export strategy. The advantages of locating a particular market are a combination of market potential and investment risk. As you might expect, lower export risk typically translates into a lower rate of return on sales than is possible with other modes of international business. In other words, the usual return on export sales may not be great, but neither is the risk. Secondly, exporting SMEs would do well to observe the offering of a minimum number of product lines until a foothold has been established when... .middle of paper... alerts, the degree safety integrated into product design, donations to good causes and sales of addictive products (tobacco, alcohol). For example, some standard Canadian promotional techniques are not always successful in other countries. Many Europeans believe that a product must be inherently substandard if a company engages in hard-sell marketing. Finally, an SME should be familiar with the various corruption strategies present in the international business market. For example, in Canada and the United States, bribes are considered unethical and illegal. In 2006, the Gemological Institute of American fired several employees after they accepted bribes from diamond traders. In exchange for the bribes, the employees valued the dealers' diamonds higher than they should have been. This also allowed the deals to sell the diamonds at a much higher price.