ExportCompass - strategy tool for CEO. World Trade center "Riga". 2 Elizabetes Str., LV-1340, Riga, Latvia.

First steps

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ExportCompass Desktop has been created for an export manager to easy and in a transparent way make export assessments by varying the different assessment criteria. For example, it is possible to evaluate attractiveness of countries only by their market size, ending with a set of complicated considerations, taking into account all 11 evaluation criteria.

ExportCompass Desktop software has 2 main sections:

• Export Index and
• Benchmarking.

Starting the work for the first time, the following principle should be observed:

1. Choose the product for which export countries’ assessment is to be made Load > appropriate data file (.txt extension)
2. Set the significance of evaluation criteria in the Export Index section;
3. If necessary, limit the list of countries in the Benchmarking section by setting limit values to any of the evaluation criteria;
4. Save and/or print the obtained results.

When continuing the work, the user may, at its own discretion, make an evaluation - a repeated evaluation or by using the results saved in the previous session of work.

Export Index section

In this section the overall evaluation of export attractiveness is made:

1. 1) By taking into account each factor value and significance;
2. 2) By dropping those countries which do not comply with any of the limiting market values (settings from the Benchmarking section); when starting work, no restrictions are applied, i.e. the list shows all countries.

Explanations. Overall evaluation of export attractiveness – In the Export Index section it is shown on the last column on the right side of the table. The result is an indexed figure which shows evaluation of a certain country in relation to others. For example, if for a country A the evaluation is 23 points and for a country B it is 5 points, the country A is, of course, more attractive. Whereas, if for a country C the evaluation is 21 points, the country C also has a rather attractive market. Factor value – factor is expressed in each column in Export Index section, and factor value is the figure for the respective country in the column. Those values vary from 1 to 0, where 1 is the highest evaluation and 0 is the lowest. For example, the market size factor value for the country A is 0.8; this means that import market of the country A is very large. Factor significance – these are values that are shown in the upper part of the columns in Export Index section and which an export manager can change in the range of 0 to 10.

In each evaluation factor (market size, market volume changes, market saturation, etc.) countries are compared with one another, where the highest evaluation given to one of the countries is 1 and the lowest evaluation which is 0 is given to the country whose market indicator is the lowest.

Example: If you look at the Market size column, then for one of the countries (country A) evaluation will be 1 and for any other (country B) it could be near 0.5. This means that import market size of the country B is two times smaller than that of the country A, besides import market size of the country A is the largest in the world. The interpretation of these values in absolute terms (e.g. imported tonnes per annum) may be seen in the Benchmarking section by finding the respective country.

Each evaluation factor has its significance, where 10 is the highest degree of significance and 1 is the lowest. To exclude a factor from evaluation completely, significance degree 0 should be applied.

Example: To evaluate countries only by their market size, in the Factor significance row significance degree 0 should be chosen for all the rest factors, leaving value only to the Market size factor. Thus in the table of the Export Index section all countries will be listed in a descending order according to their market size – the first row will show the country with the largest import market, and the last one will show the country with the smallest import market. After this evaluation is done it can be extended by adding any other market value, e.g. market distance (Distance). If for the Market size factor and for the Distance factor the value 10 is set leaving for the rest of factors the value 0, then evaluation of countries is obtained which shows the largest and nearest import markets.

When starting work with ExportCompass Desktop software, automatically those factor significance values are applied which have been set as default. Those values correspond to the standard evaluation, i.e. the most typical factor significance for an average exporter. Those factor values are the following:

• Market size - 3
• Market volume changes - 8
• Market saturation - 2
• Price - 8
• Price changes - 6
• Competition - 6
• Distance - 10
• Purchasing power - 1
• Political risk - 5
• Commercial risk - 8
• Import barriers - 8

However, it should be noted that this standard evaluation is very subjective; each company uses its own considerations regarding the advancement of production in the market.

Example: This standard situation cannot be applied to high quality goods and value added goods which can be transported freely all over the world and transportation of which has a negligible impact on their final price and quality. An example could be small developing wood toys for children. In this case, the significance value 10 of the Distance factor should be changed to a much lower one, ranging from 0 to 3, for example. For such a product, it would be more important to increase significance of such factors as Competition, Purchasing power, Political risk and Commercial risk.

When changing each factor’s significance also the overall evaluation of export attractiveness will change, and the software will calculate it and arrange the countries in a descending order each time. Thus the results will be demonstrated on the display and it will be possible to see the changes.

When looking at the obtained overall evaluation of export attractiveness of the countries it is possible to compare separate countries to make any choice. This choice could be, for example, visiting an exhibition in Germany or Belgium.

However, it is also possible to separate several groups of countries which could be regarded as most attractive, medium attractive or not attractive. Those groups can be separated on the basis of the obtained points, e.g. by including in the group of the most attractive countries those countries whose total evaluation ranges between 30 and 20.

Benchmarking section

This section of the display shows absolute values for all data and for all countries. This is the most significant and fundamental difference from the Export Index section. The indices of those absolute numbers are the following:

Market size	Import market size (MT/year, kgs/year, pcs/year, m2/year, etc.)
Market volume changes	Import market volume changes (in the last 5 years – average per annum),%
Market saturation	Import volume per capita (kgs, MT, pcs, etc.)
Price	Average import selling price (USD/kg, USD/MT, USD/pcs. etc.)
Price changes	Average import selling price changes (in the last 5 years – average per annum),%
Competition	Local competition (local export in relation to import volume)
Distance	Market distance, km (from Riga, London, Prague, etc.)
Purchasing power	Buying power of inhabitants, USD
Political risk	Short-term political risk with regard to export transactions, expressed in evaluation from 1–7 (1 – negligible risk; 7 – serious risk)
Commercial risk	Commercial risk with regard to export transactions, expressed in evaluation from 1-3 (1 – negligible risk; 3 – serious risk)
Import barriers	Percentage of import tariffs and non-tariff barriers in relation to exporter

In this section an export manager can limit the list of countries by determining in each of the factors the highest and the lowest values on the basis of data seen on the display.

This is an important operation to drop those countries in respect of which any of the market characteristics are unacceptable for a manager, e.g., the market is too small. By limiting the list of countries in this way, it is possible not only to drop the less important countries but also to select special groups of countries characterised by any feature.

To perform this operation the user enters the minimum and/or maximum value in any of the factors (in the upper edge of the display). For choosing values the user can examine the market information in the table below and also be guided by the average value which is calculated for each factor.

The selection principles apply only after the entered values are activated by pressing the “Apply” command button. To clear the entered values press the “Reset” command button.

When activating the selection conditions in the Export Index section, the countries which do not comply with the settings of the Benchmarking section will be shown in grey colour, and thus it will be possible to clearly see the selected and dropped countries in the total list.

When starting work, the programme enters in the selection criteria columns the default values which comply with the minimum and maximum values in each of the factor columns. This means that by default the restrictions cover factor values of all countries, and a complete list of countries is seen. By changing this value corridor the list of countries will be limited.

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