Exporting and Growth for Small Business Research Paper

Exporting and Growth for Small Business - Research Paper Example Wadia, a manufacturer of high end premium priced compact disk players in the United States faces a similar predicament as the prevailing market niche in the U.S for its products are unsustainable to run a small enterprising business in the industry. Wadia is therefore forced to go an extra mile in the foreign market and export its products. Currently Wadia ships 70 to 80 percent of its manufactured products. The international market has enabled the two companies sell their items at recommendable rates by increasing the economies of scale leading to a profitable venture with an advantage of expanding their market size (Hill, 2011). In a business setting that lacks exportation, Morgan Motors would be confined to its local market which is uneconomical in sustaining its productivity. Dependence on local sales would be disastrous as the company would lose its ready and large external market translating to a large decrease in sales and profits. Economies of scale would also be at their disadvantage. In a case where the company does not incorporate importation of its raw materials, they would not manage to produce their products as they import most of their raw materials. Alternatively, they may be forced to purchase all raw materials locally which would be expensive and not profitable in the long run as desirable sales are not met locally. Generally if a company like Morgan Motors does not engage in importation and exportation business, it would simply go bankrupt, get its assets frozen and shut down (Yager, 2009). There exist impediments to efficient exporting for companies like Morgan and Wadia as they may have the need to maximize on their capacity production but encounter difficulties in getting access to working capital loans for expanding their international market. In tackling this issue and improving their efficiency in production and market demands, these companies can approach banking institutions,