AN EXPLORATORY ANALYSIS OF SUCCESS FACTORS IN EXPORTING SME'S
Leo Simpson, Eastern Washington University, Cheney, WA 99004 Robert L. McGinty, Eastern Washington
University, Cheney, WA 99004 Kevin Coleman, Eastern Washington University, Cheney, WA 99004
The fundamental purpose of this research project is to profile exporting firms and the strategies utilized by small
businesses exporting from the Pacific Northwest to the countries of the Pacific Rim and Eastern Europe. The profiles of
these small exporters are developed using data collected from a survey sent to 1,150 small exporting businesses.
Specific research objectives include the following:
1. To identify common critical factors in effective multinational strategies that allow small or medium sized enterprises
(SME's) to trade with Pacific Rim and Eastern European markets,
2. To isolate factors necessary to be successful and effective in developing and maintaining a profitable export market,
3. To determine if exporting SME's differentiate between international and domestic markets in strategy and structure.
Only one method of measurement is being used since the study is exploratory in nature, and because the researchers
wanted to provide an open format for receiving additional information. A pretested mail questionnaire was sent to
1,150 SME's in the Pacific Northwest. The returns suggest differences between international and domestic customers;
differences in marketing strategies based on product line and mix and country being targeted; and differences based on
a SME's overall mix of primary international trading activities.
Current developments in U.S. export markets in the orient and in Eastern Europe, both political and economic, provide
research opportunities to explore small and medium sized enterprise export and import activities. The strategies
associated with a small business entering the international arena are largely unknown and have been researched very
little. Further, there is a lack of empirical support for specific measures that determine organizational effectiveness in
these environments. Kirchoff found no single predictor of firm effectiveness (6). Yet, proxy measures of sales, ROI,
and so forth appear to correlate to exporting success.
It is a challenge for small businesses worldwide to become involved in international markets. According to Daniels, et
al. (1984) many entrepreneurs do not move into international markets because of ignorance, fear, or both. Many of
those who do make the effort find there are many barriers to success. Some have succeeded, however, and are enjoying
tremendous success. Currently, the news is full of larger firms racing to establish economic ties with Eastern Europe.
For example, it is estimated that Eastern Germany wi11 import $ll0,000,000 of computers; Poland, $400,000,000 of
food and medical equipment; Romania, $680,000,000 of high tech investment goods; and Hungary, over $320,000,000
of chemicals, pharmaceutical supplies, and farm machinery (14). Smaller firms have not developed strategic plans to
compete, but are seeking information which is unavailable. Where and how to access this is invaluable information is a
critical success factors for SME's that export and import.
Almost all for-profit firms operating in the inland northwest are classified as a SME (small or medium-sized enterprise)
(5). The success of these businesses in entering international markets is vital to the economic health of an economic
region according to the 1988 Washington State Economic Development Agenda. One of the goals is to "enhance a
state's stature as a center for international trade." This could be accomplished through "strategic partnerships" designed
to combined SME's in a given region with international firms to expand overseas markets for a state's products and to
encourage foreign investment (9). Additional joint ventures with existing government agencies or larger firms also
offer tremendous opportunities for SME's to develop international markets and acquire the knowledge to successfully
serve these markets: e.g., U.S. Department of International Trade, State Departments of Trade, Small Business
Association, and U.S. Customs to name a few.
Considering the role of SME's in the regional economies and the importance of fostering economic development in the