export strategies

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International Business

Chapter Thirteen

Export and ImportStrategies


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Strategy of the MultinationalsPrice

Quality

Competitive

Advantage

Export Strategy

Investment /

Collaborative strategy

Manufacturing / Supply

chain strategy

MarketingFinance

AccountingHuman Resource

R&D


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Export Strategy of the Firm

Firms export in order to. increase revenues

achieve economies of scale

alleviate excess capacity

minimize risk and diversify markets Firms consider the following factors to

export:

Ownership advantages

Location advantages

Internalization advantages


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Phases of Export Development


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Steps Involved in DesigningExport Strategy

Assess companys export potential

Obtain export counseling

Select a market or markets

Formulate and implement an exportstrategy

Table 13.2 Export Business Plan has thedetails


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Export Intermediaries

Export can be conducted directly, indirectly or

through third party intermediaries.

Export management company (EMC): a firm thateither acts as a manufacturers agent or buysmerchandise from manufacturers for international

distribution.Export trading company (ETC): a large,

independent broker whose primary purpose is tomatch suppliers to foreign customers for a fee.

Foreign freight forwarder: an international trade

specialist who assists in the delivery of goodsfrom producer to customer


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Import Strategy of the Firm

Why import? Basic imports include: industrial and consumer goods and

services

intermediate goods and services

Strategic advantages of imports

Specialization of labor

Global rivalry

Local unavailability

Diversification of operation risks

Gain knowledge from abroad


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Export Import Process

Informs

Exporter

Exporter

s Bank

Importer

Importers

Bank

Receivespayment

Ships

Bill of lading

Informs

Reimbursement

Payment Opens Letter of Credit


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Export Documentation

Key export documents include: pro forma invoice: outlines the terms of

sale, price, and delivery details commercial invoice: detailed legal

document-see example in the text shippers export declaration: used to

monitor exports and compile tradestatistics

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


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Countertrade

Countertrade: is good when afirm/government lacks sufficient funds orconvertible currency to pay for imports

Two basic types of countertradetransactions include: barter [based on clearing arrangements

used to avoid money-based exchange] buybacks, offsets, and counterpurchase

[all of which are used to imposereciprocal commitments]

Countertrade can be inefficient orinflexible


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Chapter 13: Discussion Questions

1. Explain why firms export or import. Whatdo they gain from export-import?

2. Discuss the functions of Export

Intermediaries.3. Describe the export-import process and

explain the role of various exportdocumentation involved in the process.

4. What is countertrade? Why firms orgovernments engage in countertrade?

export strategies

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