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Exporting and Global Sourcing, Benefits of Global Sourcing, Ability to…
Exporting and Global
Sourcing
Describe how to manage export-import transaction
Incoterms (International Commerce
Terms)
FOB Free on
board
CIF Cost，insurance，and
freight
EXW Exworks
Methods of Payment
Cash in
Advance
Open
Account
Letter of
Credit
Export Documentation
Bill of lading
Shipper’s export declaration
Commercial invoice
Certificate of origin
• Quotation or pro forma invoice
Insurance certificate
Countertrade
定义：1.all or
partial payments are made in kind rather than cash.2.Common in large-scale government procurement.3.Risky
Types of Countertrade
Barter:全货
Compensation deal半货
Counterpurchase合同
Buy-back agreement区别第一个，第一个一般是一次性的而这个是长久的
Understand exporting as a foreign market entry
strategy.
firm’s first foreign entry strategy.
Low risk, low cost, and flexible
Advantages of Exporting
Increase sales volume; improve market share.
• Generate better profit margins.
• Increase economies of scale - reducing per-unit costs of manufacturing.
• Diversify customer base – reducing dependence on home markets.
• Stabilize sales fluctuations – associated with economic cycles/seasonality of demand.
• Minimize market entry costs – to test new markets before committing greater resources through FDI
• Minimize risk.
• Maximize flexibility.
• Leverage the capabilities of foreign distributors
Services are Exported as Well：most services are provided to foreign customers via
entry strategies other than exporting, especially FDI
Disadvantages of Exporting
Firm must acquire and dedicate new capabilities
Exposes the firm to tariffs and other trade barriers as
well as fluctuating exchange rates
Compared to FDI，exporting offers fewer opportunities
to learn about customers, competitors，and other
aspects of foreign markets
A Systematic Approach to Exporting
1.Assess global market opportunity2.Organize fol
exporting3.Acquire needed
skills and competencies4.Implement
exporting strategy
Export Intermediation Options
Indirect exporting2.Direct exporting:3.Company-owned foreign subsidiary
Understand outsourcing, global sourcing, and
offshoring.
Drivers of Global Sourcing
Falling costs
Entrepreneurship and rapid economic transformation
Technological advances in communications
Two Key Decisions Regarding Global
Sourcing
Decision 1: Outsource or Not?
Decision 2: Where in the World Should Value-Adding Activities Be
Located?
定义：Global Sourcing
Also called global outsourcing, global procurement
or global purchasing, importing
Business Process Outsourcing (BPO)
Contract Manufacturing
Global Sourcing from Subsidiaries versus
Independent Suppliers，独立供应商：特定技能，成本优势
子公司：更好的控制与知识产权保护
ex：Captive sourcing
Offshoring
地理位置的变化
Understand global sourcing strategies and supplychain managemen
Corporate Social Responsibility
Useful Public Policy for Minimizing the
Harm of Global Sourcing
Reshoring and Nearshoring
Strategies for Minimizing Risk in Global
Sourcing
Go offshore for the right reasons.
Get employees on board
Choose suppliers carefully
Emphasize communications and collaboration with
suppliers
Safeguard interests
Global Supply Chain Management
Describe the benefits and risks of global sourcing
Explain identifying and working with foreign
intermediaries
Working with Foreign Intermediaries
Types of Exporting Intermediaries
Foreign distributor经销商
Trading company
Manufacturer’s representative代理商，区别经销商无货物所有权
Export management company (EMC)：Based in the home market
Common Dispute Areas with
Intermediaries
Criteria for Evaluating Export
Intermediaries
Product-Related
Factors
Marketing
Capabilities
Organizational
Strengths
Managerial
Commitment
Benefits of Global Sourcing
Risks in Global Sourcing
• Weak legal environment, which can affect protection of intellectual property.
• Inadequate or low-skilled workers.
• Overreliance on suppliers.
• Risk of creating competitors.
• Erosion of morale and commitment among homecountry employees, due to outsourcing jobs
• Environmental factors, such as exchange rate fluctuations, trade barriers, and labor strikes.
Lower-than-expected cost savings.
Cost Efficiency：due to lower wages
abroad, leading to improve profitability
Ability to Achieve Strategic Goals
– Technological flexibility
– Access to new markets.
– Increased speed to market.
– Business process redesign.
– Improved productivity and service.
– Access to qualified personnel.
Faster corporate growth.
