In preparation for most of our work, we use a multi-step analysis that is based on existing international toolkits and several in-house methodologies for identifying export potential and assessing trade competitiveness for both goods and services on foreign markets.
To run numerous calculations required to produce valuable insights contained in each study or project, a computing framework and modern Business Intelligence (BI) technologies are used. No field studies, surveys, interviews or other forms of primary research are normally conducted but are optional if the client desires to cover the costs of such endeavors.
This piece is written to summarize the way we conduct our studies for potential clients and our current and future partners.
The International Trade Centre’s (ITC) Export Potential Assessments methodology, originally designed to prioritize products, sectors, and markets to better target trade support interventions by government agencies and trade promotion organizations, can also be used quite effectively to spot new opportunities in foreign markets by individual companies.
However, the original ITC methodology in our projectwork is slightly modified to adjust for several factors, including but not limited to:
- Data distortions, potentially steering the analysis towards wrong conclusions, caused by the prevalence of manufacturers and exporting companies owned by large transnational corporations;
- Additional weighting factors to identify smaller niche products missed by traditional customs data and only reflected in parcel data (E-commerce);
- Actual costs of freight vs. simple distances between exporter and importer.
Moreover, our data collection system that substantially improves the available data used for calculations compare to more traditional sources like UN Comtrade database, allows to further improve the quality of our findings. More on that will be covered in the next Blog post.
To differentiate from the supply and demand factors discussed above, an additional transactional cost's layer is added to assess the exporter’s trade competitiveness on a target market. The in-house trade competitiveness analysis methodology uses the following indicators:
Finally, by combining both Export Potential and Trade Competitiveness sub-indicators into a composite index, it is possible to create a ranking for each possible combination of markets and products according to our client's needs.