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Daniels15 - 14 - Export and Import

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211 views18 pages

Daniels15 - 14 - Export and Import

Uploaded by

Nahid Sultana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Chapter 14

Export and Import

Copyright © 2015 Pearson Education, Inc. 14-1


Competitive Advantage and the
Strategy of the Multinationals

Export Strategy
Price
Investment /
Collaborative strategy  
Competitive
Manufacturing / Supply   Advantage
chain strategy
 
Marketing Quality
Finance
Accounting  
Human Resource  
R&D
Export Strategy of the Firm

 Exporting and importing are the most common


modes of international business; and, one of the
fastest growing activities in the world
 Why Export….
 Profitability-increase revenues
 Productivity-achieve economies of scale,
alleviate excess capacity
 Diversification-minimize risk and diversify
markets

3
Export- The Matter of Advantages

Firms’ “entry strategy/mode” is influenced by


Ownership advantages
 the firm’s core competencies
Location advantages
 the combination of sales opportunity and
investment risk that creates favorable locations
in foreign markets
Internalization advantages
 reflect companies’ response to market
imperfections that often create uncertainties

Copyright © 2015 Pearson Education, Inc. 14-4


Exporters: Initiation and
Development
 Two approaches
 Incremental internationalization
 exporting is a learning process

 Born global
 instant internationalization

 global focus

Copyright © 2015 Pearson Education, Inc. 14-5


Exporters: Initiation and
Development
Top Trade Partners of the United States: Exports and Imports

Copyright © 2015 Pearson Education, Inc. 14-6


Approaches to Exporting
 Export approaches include
 Direct exporting
 involves independent representatives,
distributors, or retailers outside of the
exporter’s home country
 Indirect exporting
 products are sold to an intermediary in the
domestic market, which then exports them
 Passively filling orders from domestic buyers
who then export the product
 Selling to domestic buyers who represent
foreign end users or customers
Copyright © 2015 Pearson Education, Inc. 14-7
Export Import Process
Ships
Exporter Importer
Bill of lading

Receives Payment
Informs Opens Letter of Credit
payment
   

Reimbursement Importer’s
Exporter’s
Bank Bank
Informs
Types of Exports Documents

 Pro Forma Invoice: outlines the terms of sale,


price, and delivery details, it is the basis for
Commercial Invoice
 Shipper’s Export Declaration: used to monitor
exports and compile trade statistics
 Bill of Lading: a detailed receipt from the carrier
transporting the cargo
 Consular Invoice: required to monitor imports
 Certificate of Origin: determines the tariff
 Export Packing List: lists the cargo details
 Commercial Invoice: details of sale according
to Pro Forma Invoice, it is legal document

9
Types of Exports Documents

10
Import Strategy of the Firm

 Why import? Strategic advantages of


import….
 Specialization of labor
 Global rivalry
 Local unavailability
 Diversification of operation risks

11
Issues in Exporting/Importing

 Financial risks
 Customer management
 Lack of international business experience
 Marketing challenges
 Top management commitment
 Government regulation
 Trade documentation

Copyright © 2015 Pearson Education, Inc. 14-12


Support, Resources and Assistance
 Companies can get support, resources and
assistance from
 Government agencies
 The U.S. Department of Commerce
International Trade Administration
 The Small Business Administration

Copyright © 2015 Pearson Education, Inc. 14-13


Support, Resources and Assistance
Trade Assistance by Type and Source

Copyright © 2015 Pearson Education, Inc. 14-14


Export/Import Intermediaries

 Export intermediaries: third party firms that market


products and services abroad on behalf of
manufacturers, farm groups, and distributors
 Export management company (EMC)

 Export trade companies (ETC)

 Customs agents: enforce the rules of trade for a


particular country
 Customs brokers: help importers navigate the
regulations imposed by customs agencies
 Freight forwarders: the largest export/import
intermediary in terms of value and weight of products
shipped internationally
Copyright © 2015 Pearson Education, Inc. 14-15
An Export Plan
An Export Plan

Copyright © 2015 Pearson Education, Inc. 14-16


Countertrade
 Countertrade
 different arrangements that parties use to trade
products via transactions that use limited or no currency
or credit
 Examples of countertrade transactions….
 barter [based on clearing arrangements used to

avoid money-based exchange]


 buybacks, offsets, and counter purchase [all of which

are used to impose reciprocal commitments]


 Costs and Benefits of Countertrade
 Costs: inefficient, risky, cumbersome
 Benefits: build mutually beneficial relationships

Copyright © 2015 Pearson Education, Inc. 14-17


Types of Countertrade
Common Types of Countertrade

Copyright © 2015 Pearson Education, Inc. 14-18

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