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Module 2-2

Export and Import

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Learning Objectives To introduce the idea of exporting and

profile its elements To introduce the idea of importing and

profile its elements To identify the problems and pitfalls that

challenge international traders To identify the resources and assistance

that helps international traders To discuss the idea of an export plan To outline the practice of countertrade

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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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IntroductionEnvironmental Factors Influencing Export and Import Operations

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ExportingLearning Objective 1: To introduce the idea of exporting and profile its elements

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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

Types of exporters Non-exporter Occasional exporter Regular exporter

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Exporting Entry mode is influenced by Ownership advantages

the firm’s 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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Characteristics of Exporters

Size Large Small and medium-sized enterprises

(SMEs) Management commitment Efficiency Cost structure

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Why Export? Reasons to export include

Profits Productivity Diversification

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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 representatives,

distributors, or retailers outside of the exporter’s 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 Learning Objective 2: To introduce the idea of importing and profile its elements

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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 Opportunistic Arbitrageurs

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Characteristics of Importers

Size most are also exporters

Efficiency Innovation Commitment

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Why Import? Reasons to import

Specialization of labor Global rivalry Local unavailability Diversification Top management outlook

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Importing and Exporting: Problems and Pitfalls

Learning Objective 3: To identify the problems and pitfalls that challenge international traders

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Importing and Exporting: Problems and Pitfalls

Financial risks Customer management Lack of international business experience Marketing barriers Top management commitment Trade regulations Trade documentation

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Importing and Exporting: Problems and Pitfalls

Types of Export Documents

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Importing and Exporting: Resources and AssistanceLearning Objective 4: To identify the resources and assistance that helps international traders

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Importing and Exporting: Resources and Assistance

Companies can get resources and assistance from Government agencies The Department of Commerce: DGFT EXIM Bank Trade Consultants Chamber of Commerce and Industry

Associations

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Importing and Exporting: Resources and Assistance

Trade Information by Type and Source

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Importing and Exporting: Resources and Assistance

Export intermediaries third party firms that market products and

services abroad on behalf of manufacturers, farm groups, and distributors

Export management company (EMC) Export trade companies (ETC)

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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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Importing and Exporting: Resources and Assistance

Where the Trading is Easy – and Where it is Not

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Importing and Exporting: Resources and Assistance

Freight forwarders the largest export/import intermediary in terms

of value and weight of products shipped internationally

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Importing and Exporting: Resources and Assistance

Third party logistics (3PLs) move cargo and provide a range of

logistics options work in partnership with manufacturers,

shippers, and retailers

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Reconciling Opportunity and Challenge: An Export

Plan Learning Objective 5: To discuss the idea of an export plan

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Reconciling Opportunity and Challenge: An Export

Plan Export plan

identifies useful resources, assigns responsibility, and stipulates controls

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Reconciling Opportunity and Challenge: An Export

PlanAn Export Plan

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CountertradeLearning Objective 6: To outline the practice of countertrade

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Countertrade Countertrade

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

Costs inefficient risky cumbersome

Benefits build mutually beneficial relationships

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CountertradeCommon Types of Countertrade

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Technology and International Trade

Advances in technology are leveling the playing field for SMEs Online platform Software platform Logistics platform