5 Keys to Export Diversification


Renee Justin, Negosentro | Diversification is one of the most commonly used risk management strategies in most industries, including international trade. During the past few decades, export diversification has become deeply ingrained into the very fabric of many economies and a “must-learn” for any export companies aiming to manage their significant capital or merely succeed in the trading world.

Export diversification, as the name implies, involves offering new products or entering a new market with high potential for growth. According to research by Policy Options, small- and medium-sized enterprises that export to emerging markets perform better on average than those that export to other foreign destinations. However, since there is a higher risk associated with emerging markets, companies looking to use this concept must undertake in-depth research and seek the guidance of an international trade expert.

To further explore this concept, here the critical takeaways from the infographic below provided by Alba Logistics, discussing the five essential aspects of export diversification that exporters should consider to survive and succeed in today’s business environment.


  • New Target Market


Export diversification typically means venturing into a new market which can include:

  • New industrial sales markets in addition to the traditional outlets.
  • Exports to other developed and developing countries.
  • Exports to the emerging markets of Asia, Latin America and Africa.

Furthermore, penetrating a new target market also requires careful deliberation of many factors, such as the viability of the market, current regulatory and entry barriers, and the presence of competitors in the target area.


  • Your USP and the Competition


A company planning to diversify into a new market must also identify their Unique Selling Proposition (USP), and the existing leverage that their competitors have. Thorough internal and external analysis will allow for benchmarking on critical success areas such as sales, growth, and sales force which can help determine if the company can compete in the new market.


  • Entry Option  


An export company can enter a new market using different approaches such as:


  • Partnering with distributors
  • Selling through agents
  • Buying or merging with a local company
  • Building from the ground (establishing a company on the new target market country)


Each entry option has their own merits and demerits, so consider those first and see which one fits the capability of your business.


  • New Connections


Having reliable networks in a new market is a vital factor in market intelligence gathering, as well as in finding potential customers and business partners. They are also an provide valuable insight of the local culture, trends, and business practices.

Some ways to find new connections in a new market are:

  • Tradeshows
  • Networking (either online or in-person)
  • Partnering with local agents, distributor or suppliers
  • Partnering with another company
  • Establishing a new thought leadership
  • Joining associations
  • Through digital marketing


  • Logistics Operations


Finally, a successful export diversification requires an efficient and productive logistics operations. Transporting goods to a new and foreign territory is much more complicated than delivering new products domestically. As such, your company’s competitive advantage should be supported by capable and efficient logistics operation to ensure a successful diversification.

Check the infographic below to learn more about export diversification.


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