© 2011 South-Western | Cengage Learning Importing, Exporting, and Trade Relations 6-1 Importing...

© 2011 South-Western | Cengage Learning

Importing, Exporting, and Trade Relations

6-1 Importing Procedures6-2 Exporting Procedures6-3 Importance of Trade Relations6-4 The Nature of Competition

CHAPTER 6

INTERNATIONAL BUSINESS, 4e CHAPTER

SLIDE 2© 2011 South-Western | Cengage Learning

6LESSON 6-1

Importing Procedures

GOALSGOALSExplain the importance of

importing.Identify the four steps for importing.



6

Importance of Importing

Product demandLower costsProduction inputs



6

Importing Activities

STEP 1: Determine demand

STEP 2: Contact suppliers

STEP 3: Finalize purchase

STEP 4: Receive goods



6

Import Assistance

Customs and Border Protection (CBP)Food and Drug Administration (FDA)U.S. Department of Agriculture (USDA)



6LESSON 6-2

Exporting Procedures

GOALSGOALSIdentify the steps of the exporting

process.Describe the exporting of services.



6

The Exporting Process

STEP 1: Find potential customers

STEP 2: Meet the needs of customers

STEP 3: Agree on sales terms

STEP 4: Deliver products or services

STEP 5: Complete the transaction



6

Sales Terms

Free on board (FOB)Cost, insurance, and freight (CIF)Cost and freight (C&F)



6

Export Documents

Bill of ladingCertificate of origin



6

Obstacles to Exporting

No company representatives in foreign countriesProducts not appropriate for foreign consumersInsufficient production facilities to manufacture

enough goods for exportingHigh costs of doing business in other countriesDifficulty understanding foreign business

proceduresDifficulty obtaining payment from foreign

customers



6

Commonly Exported Services

HospitalityHotels, food service

EntertainmentMovies, music, television production,

amusement parks

Financial servicesInsurance, real estate



6LESSON 6-3

Importance of Trade Relations

GOALSGOALSIdentify the economic effects of

foreign trade.Describe the types of trade

agreements between countries.



6The Economic Effect of Foreign Trade

Balance of tradeTrade deficitTrade surplus

Balance of paymentsPositive, or favorableNegative, or unfavorable



6

Trade Agreements

Promote economic developmentEncourage international business activities



6

The World Trade Organization

Deals with rules of trade between nationsHelps producers of goods and services,

exporters, and importers conduct their business

Encourages international trade



6

Regional Cooperation

Economic communityCommon market



6

Barter Agreements

Direct barterCountertrade



6

Free-Trade Zones

An area designated by a government for duty-free entry of nonprohibited goods

Commonly located at a point of entry into a nation



6LESSON 6-4

The Nature of Competition

GOALSGOALSList factors that affect international

business competition.Explain the types of competitive

market situations.



6International Business Competition

Factors affecting competitionNumber of companiesBusiness costsProduct differences

Benefits and concerns of competition



6

Types of Competitive Situations

Pure competitionMonopolistic competitionOligopolyMonopoly



6

Competitive Market Situations

Monopolistic Competition● Many sellers● Slightly different product

Monopolistic Competition● Many sellers● Slightly different product

Oligopoly● Few sellers● Slightly different product

Oligopoly● Few sellers● Slightly different product

Pure Competition ● Many sellers● Same product

Pure Competition ● Many sellers● Same product

Monopoly● One seller● Usually government

regulated

Monopoly● One seller● Usually government

regulated

© 2011 South-Western | Cengage Learning Importing, Exporting, and Trade Relations 6-1 Importing...

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