Module 2-2
Export and Import
13-1
Learning Objectives
To introduce the idea of exporting and profile its elements To introduce the idea of importing and profile its elements To identify the problems and pitfalls that challenge international traders To identify the resources and assistance that helps international traders To discuss the idea of an export plan To outline the practice of countertrade
13-2
Introduction
Exporting and importing are the most common modes of international business Exporting and importing are one of the fastest growing activities in the world
13-3
Introduction
Environmental Factors Influencing Export and Import Operations
13-4
Exporting
Learning Objective 1: To introduce the idea of exporting and profile its elements
13-5
Exporting
Exporting
the sale of goods or services produced by a company based in one country to customers that reside in a different country
Non-exporter Occasional exporter Regular exporter
Types of exporters
13-6
Exporting
Entry mode is influenced by Ownership advantages
the firms core competencies
Location advantages
the combination of sales opportunity and investment risk that creates favorable locations in foreign markets
reflect companies response to market imperfections that often create uncertainties
13-7
Internalization advantages
Characteristics of Exporters
Size Large
Small and medium-sized enterprises (SMEs)
Management commitment Efficiency Cost structure
13-8
Why Export?
Reasons to export include Profits Productivity Diversification
13-9
Exporters: Initiation and Development
Two approaches Incremental internationalization exporting is a learning process Born global instant internationalization global focus
13-10
Approaches to Exporting
Export approaches include
Direct exporting involves independent representatives, distributors, or retailers outside of the exporters 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
13-11
Importing
Learning Objective 2: To introduce the idea of importing and profile its elements
13-12
Importing
Importing
the purchase of a good or service by a buyer in one country from a seller in another Input optimizers Opportunistic Arbitrageurs
Types of importers
13-13
Characteristics of Importers
Size
most are also exporters
Efficiency Innovation Commitment
13-14
Why Import?
Reasons to import
Specialization of labor Global rivalry Local unavailability Diversification Top management outlook
13-15
Importing and Exporting: Problems and Pitfalls
Learning Objective 3: To identify the problems and pitfalls that challenge international traders
13-16
Importing and Exporting: Problems and Pitfalls
Financial risks Customer management Lack of international business experience Marketing barriers Top management commitment Trade regulations Trade documentation
13-17
Importing and Exporting: Problems and Pitfalls
Types of Export Documents
13-18
Importing and Exporting: Resources and Assistance
Learning Objective 4: To identify the resources and assistance that helps international traders
13-19
Importing and Exporting: Resources and Assistance
Companies can get resources and assistance from Government agencies The Department of Commerce: DGFT EXIM Bank Trade Consultants Chamber of Commerce and Industry Associations
13-20
Importing and Exporting: Resources and Assistance
Trade Information by Type and Source
13-21
Importing and Exporting: Resources and Assistance
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)
13-22
Importing and Exporting: Resources and Assistance
Customs agents
enforce the rules of trade for a particular country help importers navigate the regulations imposed by customs agencies
Customs brokers
13-23
Importing and Exporting: Resources and Assistance
Where the Trading is Easy and Where it is Not
13-24
Importing and Exporting: Resources and Assistance
Freight forwarders
the largest export/import intermediary in terms of value and weight of products shipped internationally
13-25
Importing and Exporting: Resources and Assistance
Third party logistics (3PLs) move cargo and provide a range of logistics options work in partnership with manufacturers, shippers, and retailers
13-26
Reconciling Opportunity and Challenge: An Export Plan
Learning Objective 5: To discuss the idea of an export plan
13-27
Reconciling Opportunity and Challenge: An Export Plan
Export plan identifies useful resources, assigns responsibility, and stipulates controls
13-28
Reconciling Opportunity and Challenge: An Export Plan
An Export Plan
13-29
Countertrade
Learning Objective 6: To outline the practice of countertrade
13-30
Countertrade
Countertrade
different arrangements that parties use to trade products via transactions that use limited or no currency or credit
inefficient risky cumbersome build mutually beneficial relationships
13-31
Costs
Benefits
Countertrade
Common Types of Countertrade
13-32
Technology and International Trade
Advances in technology are leveling the playing field for SMEs
Online platform Software platform Logistics platform
13-33
