global distribution decisons
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Global distributionTRANSCRIPT
Distribution Distribution Channels and Channels and Global MarketsGlobal Markets
Sources for Finding Intermediaries
Governmental Agencies US Department of Commerce Trade Opportunity Program (TOP) Country Directories of International Contacts (CDIC) The US Exporters Yellow Pages, Commercial News
USA Private Sources
Trade directories Banks Airlines Chambers of Commerce
Small Businesses as Global Enterprises
Globalization - The expansion of international business, promoted by
converging market preferences, falling trade barriers, and the integration of national economies.
- Size does not limit a firm’s international activity, and small companies often become global competitors to take advantage of their unique resources.
Emerging Global Markets
Before Going Global
Decide if firm is up to the task of globalization. Firms need to obtain adequate, initial exporting
knowledge Study the different cultural, political and
business practices in foreign markets. Identify viable sales prospects abroad Understand business protocols
Be prepared to modify products to meet design specifications that may vary from country to country.
Select suitable target markets abroad
Questions to Consider Before Going Global
Performance Problems and Remedies When Using Overseas Distributors
Separate Ownership
• Divided Loyalties• Seller-Buyer Atmosphere• Unclear Future Intentions
Offering good incentives, helpful support schemes, discussing plan frankly, and interacting a mutually beneficial way
Geographic:Economic: andCultural Separation
• Communication Blocks• Negative Attitudes towards foreigners• Physical Distribution Strains
Marking judicious use of two-way visits, establishing a well-managed communication program, including distributor advisory council
Different Rules of Law
• Vertical Trading Restrictions
Full compliance with the law, drafting a strong distributor agreement
Seiko’s Authorized and Unauthorized Channels of Distribution
Japan UnitedStates Rest of
the World
K. Hattori & Co. Ltd.
Tokyo, Japan
Unauthorized Importers Authorize
d Importers
Seiko Time Corp.
(Importer)
Regional Distributor
s
15 Regional
Distributors
Unauthorized
Distributors
Regional Distributor
s
Numerous
Retailers
15,000 to 20,000
RetailersAuthorized Seiko Dealers
Unauthorized
Retailers
Numerous Retailers
Japanese Consumer
sAmerican Consumers
Other Consumers
E-Commerce
Marketers are networking and selling products and services through the Internet. Delivery can be outsourced by DHL, FedEx, and UPS
Popular websites are as follows Priceline.com http://www.priceline.com eBay http://www.ebay.com Quadrem http://www.quadrem.com ECnet http://www.ecnet.com Alibaba http://www.alibaba.com Even Facebook is used for marketing
Global Logistics and Materials Management
Involves making decisions on the following issues Channel Structure Channel Design Channel Management Selection of Intermediaries Channel Management E-commerce
International Logistics Defined
International logistics refers to the design and management of a system that controls the flow of materials. It involves… Materials management- the timely movement of raw
materials, parts, and supplies into and through the firm Physical distribution- involves the movement of the firm’s
finished product to it’s customers Supply Chain Management- refers to the whole system of
value-adding activities connecting the source to the end-user Complexities of logistics
Evaluation Transportation Choices
Mode of Transportation______________________________________________
Characteristics of Mode Air Pipelines Highway Rail Water__________________________________________________________________________Speed (1=fastest) 1 4 2 3 5Cost (1=highest) 1 4 2 3 5Loss and Damage (1=least) 3 1 4 5 2Frequency *(1=best) 3 1 2 4 5Dependability (1=best) 5 1 2 3 4Capacity+ (1=best) 4 5 3 2 1Availability (1=best) 3 5 1 2 4____________________________________________________________________________*Frequency: number of times mode is available during a given time period.+Capacity: ability of mode to handle large or heavy goods.
Documentation for an International Shipment
Documentation is sometimes considered to be a trade barrier
Trading regions such as the European Union have greatly simplified their documentation requirements
Bill Of Lading
Inland Bill Of LadingA legal document required for the transportation of materials over land. An inland bill of lading serves as both the carrier's receipt to the shipper and the carriage contract. The document specifies the details of the goods being transported, such as quantity, type and destination.A bill of lading (sometimes abbreviated as B/L or BoL) is a document issued by a carrier which details a shipment of merchandise and gives title of that shipment to a specified party.
Dock ReceiptDocument issued by a shipping company to acknowledge that goods have been received for shipment. Dock receipt transfers the accountability for the safe custody of the cargo from the shipper to the carrier, and serves as the basis for preparing the bill of lading
Consular InvoiceA document certifying a shipment of goods and shows information such as the consignor, consignee and value of the shipment. A consular invoice can be obtained through a consular representative of the country you're shipping to. The consular invoice is required by some countries to facilitate customs and collection of taxes.
A letter of credit is a document issued by a financial institution or a similarly accredited professional party. The letter assures payment to a seller of goods or services provided certain documents have been presented to the bank.
Documentation for an International Shipment – Bill of Lading
International Inventory Issues
Order Cycle Time The length of the total order cycle : order transmission,
order filling, packing and preparation for shipment, and transportation
Consistency Customer Service Levels
How is a firm able to fill all orders within a set time, quality of service
Inventory as a Strategic Tool Avoid currency risk and high inflation
International Storage Issues
Customers expect quick responses to orders and rapid delivery.
Warehousing space is expensive. The trade-offs between service and cost
International Storage Issues
Outsourcing Shifting of traditional corporate activities to
parties outside of the firm and often outside of the country
Foreign Trade Zones (FTZ) Trade zones are considered to be outside the
customs territory of the country within which they are located
International Packaging Issues
Climate Transportation mode The weight Customer Requirements Government Requirements Cost (shipping, insurance, pilferage)
Management of International Logistics
Centralized logistics management - Headquarters retain decision-
making power and control over logistic activities Decentralized
Each subsidiary is made a profit center Leads to greater local management satisfaction and
better adaptation to local market condition Contract logistics (Outsourcing)
Helps firms improve service at equal or lower cost Leads to loss of the firm’s control in the supply chain
International Transportation Issues
International transportation is one of the major concerns because it determines how and when goods will be received. The concerns are… Transportation infrastructure The availability of modes Choice of modes depends on transit time,
reliability/predictability, cost, noneconomic factors
Logistics and Security
Terrorists Government Cargo Security Impact of security measures for international
shipment Affect the firm’s ability to plan their international
shipments and distributions Increases the cost of supply chain activities
THANX