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Chapter 14 : Modes of trading internationally (Why import ?…
Chapter 14 : Modes of trading internationally
Exports & imports : Important facet of global economy
Emerging markets
Iris food/drinks exports to China +47%
South Africa exports to China : +43%
US companies trade now with 233 countries
World trade as percent of world GDP in $ : 55% in 2010
Definition : Exporting is the sale of goods or services produced by a firm based in one country to customers that reside in another country.
To be qualified as an export product, the product must leave the country OR earn foreign currency
Who are exporters ?
Non exporters : Some companies grows in their own market without exporting because what they product don't interest foreign markets
Occasional Exporters : They use foreign markets just as an option occasionaly.
Regular exporters : It is a company that aggresively uses global markets. They are regular exporters and they know the codes of international exchanges
In USA the 500 biggest companies account for nearly 60% of total exports value.
Why export ?
Profitability : The main goal is to become more profitable. Indeed, abroad companies can often sell theirs products for higher price.
Productivity : More productivity and more economies of scale
Diversification : Exporting enables companies to become more diversify and innovator
Exports/Imports of USA
TOP 3 exports partners
Mexico
China
Canada
TOP 3 imports partners
Canada
Mexico
China
Who are the importers ?
Input optimizers
Opportunistic : Import znd profitably sell to local citizens
Abitrageurs : Try to get the higest quality ressource from abroad at the lowest price possible
Definition : Importing is the purchase of good or service by a buyer in one country.
Why import ?
Specialization of labor
Local unavailability
Global rivalry
Diversification