THE ROLE OF STRATEGIC EXPORTING IN THE GROWTH OF AN ECONOMY

(THE NIGERIAN PERSPECTIVE)

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ABSTRACT

The study was determined to examine the role of strategic exporting in the growth of an economy. The research design used descriptive and survey method of data collection in an attempt to empirically examine the role of strategic exporting in the growth of an economy. The population of the study was made of the entire staffs of Dangote Group of companies, and Intel’s in Port Harcourt. Therefore the population of the study is unknown. The sample size of this study is judgmental sample of 100 respondents which comprise of both the senior and junior staffs of Dangote Group of companies and Intel’s. the Chi-Square statistical tool was used to test the hypothesis. Findings reveal that there is a significant relationship between strategic exporting and the growth of Nigeria Economy. Based on the findings of the study summary, conclusion and recommendations are made that exporters should try and identify some current evolving foreign marketing strategies that can be applied for export capacity consolidation in Nigeria.They should also be conscious and as such analyze and identify the problems associated with foreign marketing towards ensuring export in Nigeria, the identification of necessary import and export documentation for foreign marketing must always be taken into consideration to ensure an effective exportation.

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The foreign exchange market is a global decentralized market for the trading of currencies. Foreign exchange market is made up of banks, commercial companies, central bank, investment management firms, retail forex brokers and investors. Foreign market also refers to the global market where currencies are traded virtually around the clock.

Berger (1998), analyzed the term export as derived from the conceptual meaning as to ship the goods and services out of the port of a country. Akinyele, (2011) asserted that the seller of such goods and services is referred to as the “exporter” who is based in the country of export, whereas the overseas based buyers is referred to as an” importer”. In addition, Krugman (1987) further contends that foreign marketing strategy begins with designing a strategic export plan to tailor leverage competencies and designed to achieve profitability, through providing multilingual sales supports to help sale effortlessly. According to Brassinton, (2000) this can be accomplished with the manufacturer exporting direct without recording to local distribution thus eliminating mark-ups.

Charnes, (1985) is of the opinion that these strategies are captured in the international marketing plan; which are flexible document that will likely be reviewed, revised and modified throughout the exporting activities. In relation to the above analysis, Erie, (1973) contends that basic marketing formula, which is the four “PS” of marketing product, price, promotion, and place is just the beginning when it comes to exhibiting export strategies.

Grant (1991) also asserted that the foreign marketing plan will need to address many other factors, such as payment practices, partnerships and protection relating to payments, intellectual property or travel and many more. Collis (1991) further argued that understanding all these facets of international business, will transform the organizations foreign marketing plan into marketing action that will facilitate exporting for business and economic growth, which is the foundation for this research study.

1.2 STATEMENT OF THE PROBLEM

Developed countries supply grants in aid to developing countries. Firms from one country may wish to acquire capital asset of set up subsidiaries on another. All these are example of transactions between countries that require the movement of funds (cash flow), which may sometimes not in currency but in the correct value of capital flow, proper conversion rate and the fluctuating issues of foreign currencies. However, all these processes often raise some challenges and problems for many developing countries like Nigeria, which are stated as follows:

  1. Often time, the problems of high level of corruption, among certain authorities who handle certain responsibilities for the nation’s foreign marketing activities thereby limiting the nation’s exporting capacity.
  2. In Nigeria, problems arise in exporting because of the inefficiency in our financial system which brings limitations between the time payment are made for goods and the time fund were received.
  3. There are the problems of manipulation of this balance of payment changes and the casual relationship with the capital movement.
  4. The remittance exchange rate of foreign marketing transaction process also put the nations into such challenge that the element of cost that were born by the importers and in some case put pressure on the country’s balance payment.

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to evaluate the role of strategic exporting in the growth of Nigeria Economy. The specific objectives are as follows:

  1. To examine the extent to which exporting strategies enhance the growth of the Nigerian Economy.
  2. To find out the steps and legal considerations for successful exporting in Nigeria.
  3. To identify the essential elements of marketing strategies for exporting in Nigeria.
  4. To understand the current trends and department that aid marketing strategies for exporting in Nigeria.

1.4 SIGNIFICANCE OF THE STUDY

This study firstly, will proffer suggestion on alternative mode of transaction with the problems necessitated with import and exports as well as educating importers and exporters on all exporting strategies, the study will also help the government implement policies that will guide foreign trade, and exportation in Nigeria and ensure efficiency/effectiveness in the export sector. The study will also be of important as it will add to literature on the subject matter.

1.5 RESEARCH QUESTIONS

The following shall be the research questions for this study.

  1. To what extent does exporting strategies enhance the growth of the Nigerian Economy?
  2. What are the steps and legal considerations for a successful exporting in Nigeria?
  3. What are the essential elements of marketing strategies for exporting in Nigeria?
  4. What are the current trends and department that aid marketing strategies for exporting in Nigeria?

1.6 RESEARCH HYPOTHESES

Following the above research question the hypothesis for this study is stated below as follow:

H0; There is no significant relationship between strategic exporting and the growth of Nigeria Economy.

HI; There is a significant relationship between strategic exporting and the growth of Nigeria Economy.

1.7 SCOPE OF THE STUDY

The study is centered on designing strategic exporting towards a successful exporting in Nigeria. This study is focused on Nigeria. It will be too large to study Nigeria at large, so we limit the study to some selected multinational firms in Rivers State Nigeria. They include Dangote Group of companies and Intel’s.

1.8 LIMITATION OF THE STUDY

This research work was intended to examine the role of strategic exporting in the growth of the Nigerian Economy. However, in composing this study the researcher encountered challenges of limited funds to source for information related to the subject matter. Other limitations include the lack of adequate time frame and materials needed respectively.

1.9 DEFINITION OF RELATED TERMS

Economy: The state of a country or region in terms of the production and consumption of goods and services and the supply of money.

Exporting: Is shipping of the goods and services out of the port of one country to another.

Exchange Rate: This is the rate at which various currencies exchange with one another.

Strategy: A game plan designed to achieved desired goods and objectives.

Tariff: A standard instrument for commercial policy, essentially a relieved a government on goods entering a country.

Marketing strategy: Is a process that can allow an organization to concentrate its limited resources on the greatest opportunities.

Import license: Specific commodities placed on license so that the numbers of people that will be importing the commodity will be reduced.

Exchange rationing: This involves the allocations of foreign exchange to some government authorities. These authorities in turn rotate the foreign exchange among the competing demands.

Embargo: An outright prohibitation in the importation of some items. The purpose of embargo it is to encourage local industries and cut down on the use of foreign exchanges as well as cutting down harmful commodities like cocaine cigarette, etc. anyone caught importing these commodities will be punishable by law.

International Trade: International trade means transaction between country and other countries of the world.

 

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