International Business

Chapter Seventeen
Export and Import Strategies

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2004, Prentice Hall, Inc 17-1
2004, Prentice Hall, Inc
Chapter Objectives
Identify key elements of export and import
strategies
Compare direct and indirect selling of exports
Discuss role of several types of trading
companies in exporting
Show how freight forwarders help exporters with
the movement of goods
Identify methods of receiving payment for
exports and the financing of receivables
Discuss the role of countertrade in international
business
17-2
2004, Prentice Hall, Inc
Entry Modes
Entry modes depend of several
factors
Ownership advantages of the company
Location advantages of the market
Internationalization advantages of
integrating transactions within the
company
International experience
Ability to develop differentiated products
17-3
2004, Prentice Hall, Inc
Exporting and Importing
17-4
2004, Prentice Hall, Inc
Export Issues
What does the company want to gain from
exporting
Is exporting consistent with company
goals
What demands will exporting place on:
Key management and personnel
Production capacity
Financing
Are the benefits worth the costs
Could resources be better used developing
new domestic business
17-5
2004, Prentice Hall, Inc
Characteristics of Exporters
Probably of being an exporter
increases with company size defined
by revenues
Export intensity, the % of revenues
coming from exports, is not
positively correlated with company
size
17-6
2004, Prentice Hall, Inc
Phases of Export Development
17-7
2004, Prentice Hall, Inc
Potential Pitfalls of Exporting
Failure to obtain qualified export
counseling and to develop a master
international marketing plan
Insufficient commitment by top managers
Insufficient care in selecting overseas
agents or distributors
Chasing orders from around the world
instead of establishing a base of profitable
operations and orderly growth
17-8
2004, Prentice Hall, Inc
Potential Pitfalls of Exporting, cont
Neglecting export business when the
domestic market booms
Failure to treat international
distributors on an equal basis with
their domestic counterparts
Unwillingness to modify products to
meet other countries regulations or
cultural preferences
17-9
2004, Prentice Hall, Inc
Direct Selling
Selling through sales representative, distributors,
or to foreign retailers or final end users
Considerations:
Size and capability of sales force
Sales records
Analysis of its territory
Current product mix
Facilities and equipment
Marketing policies
Customer profile
Principles it represents
Promotional strategies
17-10
2004, Prentice Hall, Inc
Export Documentation
Pro forma invoice
Commercial invoice
Bill of lading
Consular invoice
Certificate of origin
Shippers export declaration
Export packing list
17-11
2004, Prentice Hall, Inc
Letter-of-Credit Relationships
17-12
2004, Prentice Hall, Inc
Methods of Payment
Cash in advance
Letter of credit
Draft or bill of exchange
Open account
Consignment sales
Countertrade
17-13
2004, Prentice Hall, Inc
17-14
2004, Prentice Hall, Inc
Types of Importers
Those looking for any product that
they can import
Specialized
Generalized
Those looking at foreign sourcing to
get their products at the cheapest
prices
Those looking for foreign sourcing as
a part of their global supply chain
17-15
2004, Prentice Hall, Inc
Using Import Brokers to Minimize
Duties
Value product in such a way that
they qualify for more favorable duty
treatment
Qualify for duty refunds through
drawback provisions
Deferring duties by using bonded
warehouses and foreign trade zones
Limiting liability by properly marking
an imports country of origin

17-16
2004, Prentice Hall, Inc
Offset Transactions
17-17
2004, Prentice Hall, Inc
Chapter Review
Identify key elements of export and import
strategies
Compare direct and indirect selling of exports
Discuss role of several types of trading
companies in exporting
Show how freight forwarders help exporters with
the movement of goods
Identify methods of receiving payment for
exports and the financing of receivables
Discuss the role of countertrade in international
business
17-18