A Model for Explaining the Relationship between Export Market Expansion Strategy and Export Performance

The purpose of this research is to explain the relationship between export market expansion strategies and export performance and to detect factors affecting this relationship. We study factors influencing export market expansion strategy and impacts of this strategy on export performance simultaneously using the profile deviation approach to test the concept of co-alignment. Results (obtained by studying food manufacturer exporters in Iran during 2003-2005) show that market concentrators and market spreaders do not differ in most export performance dimensions (including export level and relative export growth). These findings are in accordance with the contingency approach, stating that the success of an export market expansion strategy depends on many different situational factors as well as the alignment between these factors and strategy. Findings show factors as gaining more market share as an export objective, product adaptation to customer needs in target markets, solving logistic problems, management international outlook, production capabilities, competitive pricing and regular visits to target markets to be the determinants that fit the market concentration strategy. On the other hand, more sales volume, coping with pricing constraints, production capabilities and marketing capabilities are the factors that fit the market spreading strategy