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Chapter 13

Export and Import

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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

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World Trade 1960-2010

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Exporting
Exporting
the sale of goods or services produced by a
company based in one country to customers
that reside in a different country

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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
Internalization advantages
reflect companies response to market
imperfections that often create uncertainties
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Why Export?
Reasons to export include
Profits
Productivity
Diversification

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Importing and Exporting:
Problems and Pitfalls
Financial risks
Dealing with Customer demand
Dealing with communication technology
Lack of international business experience
Marketing challenges
Top management commitment
Government regulation
Trade documentation

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Exporters: Initiation
and Development
Two approaches
Incremental internationalization
exporting is a learning process

Born global
instant internationalization

global focus

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Approaches to Exporting
Export approaches include
Direct exporting
involves independent intermediaries-
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
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Importing and Exporting:
Resources and Assistance
Indirect Selling:
Export intermediaries
third party firms that market products and
services abroad on behalf of manufacturers,
farm groups, and distributors
Export management company (EMC):
contractual basis as an agent.
Export trade companies (ETC):
not a perfect solution, often have limited resources,
assume too much control.

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Direct Selling
Distributor
Foreign retailers and end users
Selling over the internet.

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Importing
Importing
the purchase of a good or service by a buyer in
one country from a seller in another
Types of importers
Input optimizers: sourcing as a part of their
global supply chain
Opportunistic: looking for products that
generates profit for them
Arbitrageurs: highest quality products in
lowest price

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Why Import? strategic
advantages
Reasons to import
Specialization of labor
Global rivalry
Local unavailability
Diversification

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Importing and Exporting:
Resources and Assistance
Customs agents
enforce the rules of trade for a particular
country
Customs brokers
help importers navigate the regulations
imposed by customs agencies

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Countertrade
Countertrade
different arrangements that parties use to
trade products via transactions that use limited
or no currency.

Benefits
build mutually beneficial relationships

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Countertrade
Common Types of Countertrade

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