Analysing the External Environment

• The Patidar Exports Private Limited cannot influence the external factors in its
favour, and in contrast, these factors directly affect the operations and workings
of the company.

• What international structure are you most familiar with?  

• What worked in that structure?  what did not? 

• Which structure is the most e cient?  

The complexity of operations in international trade makes the support of

a global logistics operator essential so that the exporting company can
focus on developing its competitive advantages.

A trading house serves as an intermediary. It might purchase

t-shirts wholesale from China, then sell them to a retailer in
the United States. The U.S. retailer would still
receive wholesale pricing, but the price would be slightly
higher than if the retailer purchased directly from the Chinese
company. The trading house must mark up the price of the
goods it sells to cover its costs and earn a pro t, however, the
t-shirt retailer avoids the hassles of importing. The retailer
also may be able to simplify its operations by dealing with one
or two trading houses to get its inventory instead of dealing
directly with numerous wholesalers. Small businesses that
use a trading house can bene t from its expertise and insight
into international markets they operate in, as well as get
access to vendor nancing through direct loans and trade
credits

• Trading houses are intermediaries used by

manufacturers to facilitate trade in a foreign location
• Trading houses offer a variety of services, from serving
as agents for the manufacturer in the foreign market to
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 easing the import-export process through connections

with local liaisons
• Although a retailer has to pay a marked-up price for
products imported or sold through a trading house, it can
avoid the hassles of importing and bene t from trading
houses' expertise in foreign markets, discounted rates,
and currency exchange complications

A trade agent is someone who connects manufacturers of products

to distributors or end users.

SMEs traditionally don't have the resources to look beyond their

own local markets, even though other international markets
might offer fantastic growth potential. For Example, Jason
Bruges Studio an art installation business attracted clients like
TTC but with around 25 employees there was always limited
scope when it came to spreading their message and tapping into
these lucrative international opportunities. They recruited a
Canadian agent from an artist representation firm. The agent
uses their local market insights and breadth of contacts to bring
in new business leads and the company risks very little by only
paying for the projects delivered.
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