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Modes of Trading Internationally (IMPORTING AND EXPORTING: PROBLEMS AND…
Modes of Trading Internationally
Exports and imports -->an important facet of the global economy.
Factors Influencing Export and Import Operations
Operating environment
Physical and social factors
Competitive environment
Operations
Objectives
Strategy
Exporting
Sale of goods or services produced by a firm based in one country to customers that reside in another country
A product need not physically leave a country to qualify as an export. Rather, it need only earn foreign currency.
WHO ARE EXPORTERS?
Non-Exporters
Occasional Exporters
Regular Exporters
Advantages?
Ownership Advantages
Location Advantages
Internalization Advantages
In exporting, company size matters in interesting ways.
Many see great potential in small and medium-sized enterprises (SMEs)
WHY EXPORT?
PROFITABILITY
Potential to become more profitable
PRODUCTIVITY
Tied to increasing econo- mies of scale
Selling more products in more markets drives productivity gains
DIVERSIFICATION
Diversify company's activities, fortifying their adaptability to market trends and disruptive innovations.
EXPORT: INITIATION AND DEVELOPMENT
SEQUENCES AND INCREMENTS
Initially, companies find it easier and less risky to trade with customers in countries that share geographic, cultural, linguistic, political, and legal commonalities.
Initial success trading with similar foreign customers, by developing managers’ outlook and competencies, moderates ensuing export activity
BORN GLOBALS
Rather than methodically engaging a sequence of increas- ingly dissimilar foreign markets, born globals step onto the world stage immediately upon their founding or soon after.
INTERACTION: TIME AND PLACE
THE WILDCARD ROLE OF SERENDIPITY
APPROACHES TO EXPORTING
Direct Exporting
The company directly sells its products to an indepen- dent intermediary who then sells the product to the local consumer.
Indirect Exporting
A company can use distributors, agents, or export management companies to export its products
Passively Filling Orders from Domestic Buyers Who Then Export the Product
Essentially, a buyer contacts the company, submits an order, takes delivery, and exports the product
Selling to Domestic Buyers Who Represent Foreign End Users or Customers
WHICH APPROACH WHEN?
Technology’s Role
Mix-and-Match
IMPORTING
WHO ARE IMPORTERS?
INPUT OPTIMIZERS
OPPORTUNISTIC
ARBITRAGEURS
CHARACTERISTICS OF IMPORTERS
SPECIALIZATION OF LABOR
GLOBAL RIVALRY
LOCAL UNAVAILABILITY
DIVERSIFICATION
IMPORTING AND EXPORTING: PROBLEMS
AND PITFALLS
FINANCIAL RISKS
CUSTOMER MANAGEMENT
NTERNATIONAL BUSINESS EXPERTISE
MARKETING CHALLENGES
TOP MANAGEMENT COMMITMENT
GOVERNMENT REGULATION
TRADE DOCUMENTATION
IMPORTING AND EXPORTING: RESOURCES
AND ASSISTANCE
GOVERNMENT AGENCIES
EXPORT INTERMEDIARIES
EMC
ETC
Fees
CUSTOMS BROKERS
Finding Help
FREIGHT FORWARDERS
THIRD-PARTY LOGISTICS