What are some of the costs associated with exporting? How can firms deal with these
costs?
What will be an ideal response?
Exporting is a popular internationalization vehicle with small firms because the costs of entering new markets are
relatively minimal with this vehicle. Exporters generally use local representatives or distributors to sell their
products in new international markets. The main costs associated with exporting are transportation and meeting
the packaging and ingredient requirements of the target country. Consequently, exporting is most common to
international markets that are relatively close to the domestic market or to markets in which competitors and
substitutes for the firm's products are not readily available. A large percentage of born-global firms use exporting
as a vehicle to go global quickly.
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