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	The Importance of Developing a Vision to Successfully Expand Internationally Over the past thirty years, the speed of globalization and world trade has expanded at an accelerated pace making it difficult for small-to-medium sized entities to keep up. Such an environment makes it critical to establishing a strategic plan that contains your company’s vision and expansion initiatives. In order to export successfully, small-to-medium sized enterprises (SMEs) must develop a vision and a strategy for entering and staying in foreign markets. A SMEs’ vision can be developed by identifying its core competencies. Currently, over 4,000 manufacturing and 1,200 service companies in Virginia export on an annual basis. Manufacturing companies export $11.6 billion dollars annually while service companies export $6.5 billion. The majority of the value of export shipments go to Canada and China, while the fastest growing export destination is Portugal, to which Virginia exported 410% more than the previous year. Overall, small-to-medium sized business account for the majority of the overall increase seen in new exporters in the United States and make up 97% of all U.S. exporters. Moreover, as the dollar weakens, overseas sales of U.S. products will strengthen and more firms will be enjoy an increased position in international markets. It is important to define your company’s core competencies, which will serve as the basis of your vision. A business’s core competencies are its unique products and/or services that it can leverage. If a firm does not have a core competency, one must first be cultivated. Core competencies are critical because they are firms’ inherent advantages in international trade via comparative advantages. When a firm has a comparative advantage—or a cost or differentiation advantage—it means that it has a product or service that is not easily replicated in terms of price or form. In addition, a firm’s core competency is vital to its international export plans, as core competencies not only provide trading advantages, but also because they are vital in developing a business vision. In developing a vision, strategic managers should brainstorm about where they want their company to be in the future and how they want to get there by setting goals for the immediate future. These goals include leveraging the agreed-upon core competencies, and setting specific targets for what the company’s revenue size and growth should be in order to remain sustainable. The vision should further specify the company’s intended market position—whether it plans to have a limited geographic focus or whether it plans to become an international player in the export market. The standard timeline for a vision is 3 years for technically related companies and 5 for manufacturing or traditional ones. A firm’s vision is essential to its survival during expansion. A vision provides a strategic framework and is extremely helpful because it specifically outlines a business’s path. Expressing its goals via strategic plan is highly beneficial because firms can plan and develop implementation strategies early and preemptively, which is important for international expansion. SMEs would thoroughly benefit from predetermining their target markets—i.e. who their exporting targets would be, which should in turn be determined by where the SMEs have the greatest cost and differentiation advantage. Also, SMEs should determine, based on their cost structures and ability to bear risks, what their mode of market penetration should be. As many SMEs are, by definition, smaller and not able to benefit from economies of scale, they should choose entry methods which minimize costs and mitigate risks. Accordingly, SMEs should strongly consider penetrating international markets by exporting, licensing, or engaging in joint ventures as these types of entry typically involve less investment and low risks. In order to determine which of these entries, strategic managers be wary of and must analyze trade barriers such as tariffs and quotas, overseas patent protection, and partner-risk. A vision is important for every company because it serves as a guide for strategic initiatives. It is a platform upon which companies can build business cases and rationales over others. Accordingly, managers can build and implement plans around a vision and can even use it as a litmus test while analyzing different scenarios—it can, for example, be used as a useful mechanism to vet strategies in different markets. Clearly, then, because a vision is such a valuable tool, it must be carefully constructed. Strategic planners should care, though, to ensure that a vision in implemented with some flexibility. After all, if used appropriately, a vision is a dynamic statement that should be annually revisited. For additional information on international expansion and strategic planning contact Capstone Strategic, Inc. at 202-776-0500.