InternationalBusinesschapter.ppt

Developing an export strategy: a four-step model
(1) identify a potential market. Chapter 12. perform market research and interpret the results.
Focus on one or only a few market. (2) match needs to abilities. Satisfy the needs of the local market.
lowLeabharlann Importer’s risk
high
Documentary collection
exporter
(1)contract (3)Ships good
importer
(2)draft
(9) (4) payments
documents
Exporter’s bank
(8) payments (5) documents
Providing import, export and countertrade services, developing and expanding distribution channel, providing storage facilities, financing trading and investment projects, and even manufacturing products.
Avoiding export and import blunders
(1) many businesses fail to conduct adequate market research before exporting
(2) many companies fail to obtain adequate export advice
(4) switch trading. Practice in which on company sells to another its obligation to make a purchase in a given country.
(5) buyback. Export of industrial equipment in return for products produced by that equipment.
with a fixed salary plus commissions based on the value of their sales. b): distributors. Reduce an exporter’s risk. Waken an exporter’s control over
compensated in the form of commissions on the value of their sales. Careful selection. Agents often represent several indirect exporters
simultaneously.
(2)
(11)
(9) apply for letter payment of credit
documents
Exporter’s bank
(10) send payments (8) documents (3) issue letter of credit
Importer’s bank
2 contractual entry modes
(3) offset. Agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future.
(6) (7) payments bill of lading
Importer’s bank
Letter of credit
exporter
(1)contract (5)ships goods
importer
(7) check and (4)inform (6) payments
documents
Freight forwarder: specialist in export-related activities such as customs clearing, tariff schedules, and shipping and insurance fees.
Type of countertrade
Degree of export
involvement
(1) direct export. A company sells its products directly to buyers in a target
market. Not users. a): sales representatives. They are hired by a company and are compensated
than other entry modes. c): licensing can help reduce the likelihood that a licensor’s product will appear on
the price buyer’s are charged.
(2) indirect export. Sell products to intermediaries who resell to buyers.
a): agents. Individuals or organizations represent one or more indirect exporters in a target market.
If not, rule out entry into the market. (3) initiate meetings. Holding meetings early with potential local
distributors, buyers is a must. Building trusts. Making negotiations, agreements and signing contracts. (4) commit resources. It is time to put the company’s human, financial, and physical resource to work. Chapter 11.
Advantages: a): licensors can use licensing to finance their international expansion. b): licensing can be a less risky method of international expansion for a licensor
(1) licensing: practice by which one company owning intangible property
(the licensor) grants another firm (the licensee) the right to use that property for a specified period of time. Patents, copyrights, special formulas and designs, trademarks, and brand names. Process technologies.
b): export management companies (EMC)
Company that exports products on behalf of indirect exporters. Restricted to export-related activities.
EMC services: gathering market information, formulating promotional strategies, performing specific promotional duties, researching customer credit, making shipping arrangements, coordinating export documents.
Chapter 13 selecting and managing entry
modes
Main content
In this chapter, we explore the following three categories of entry modes:
1 exporting, importing, and countertrade 2 contractual entry modes 3 investment entry modes
Countertrade: practice of selling goods or services that are paid for, in whole or part, with other goods or services.
(1) barter. Exchange of goods or services directly for other goods or services without the use of money.
(2) diversify sales. They can offset sales in one national market with increased sales in another.
(3) gain experience. Companies use exporting as a low-cost, low-risk way to gain valuable international experience.
(2) counter-purchase. Sale of goods or services to a country by a company that promises to make a future purchase of a specific product from the country.
Advantage: deep understanding of conditions of the target market.
Disadvantage: hinder the development of exporter’s own international expertise.
c): export trading companies (ETC)
Export/import financing
Risk of alternative export/import financing methods
high
Exporter’s risk
● open account ●documentary collection
●letter of credit ●advance payment
1 exporting, importing, and countertrade
Three reasons that why companies export
(1) expand sales. Domestic market has become saturated. Going international is one way to achieve economies of scale.