Copyright © 2011 Pearson Education 13-1 International Business Environments and Operations, 13/e Global Edition Part 5 Global Strategy, Structure, and.

Copyright © 2011 Pearson Education

13-1

International BusinessEnvironments and Operations,

13/eGlobal Edition

Part 5

Global Strategy, Structure, and Implementation


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Chapter 13

Export and Import Strategies


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Chapter Objectives

• To introduce the ideas of export and import• To identify the elements of export and

exporting strategies• To compare direct and indirect selling of

exports• To identify the elements of import and

importing strategies• To discuss the types and roles of third-party

intermediaries• To profile the role of counter-trade


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Exporting and Importing

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

• Importing is the converse: the purchase of products by a company based in one country from sellers that reside in another.


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World’s Top Trading Countries


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Environmental Factors Influencing Export and Import Operations


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Export Strategy

• Advantages to exporting– Requires less expertise, time, and capital

than other modes of entry– Operational control– Helps companies expand and diversify

sales as well as achieve economies of scale


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Questions to Consider

Companies typically consider the following questions in evaluating the export option:

• What do we want to gain from exporting?• Is exporting consistent with our goals?• Will exporting put undue demands on our resources? If so, how

will we meet them?• Does exporting leverage our core competency?• Does exporting fit the current configuration of our value chain?• Do our coordination systems support the needs posed by

exporting?• Are the projected benefits of exporting worth the costs?• Would our resources be better used to develop new domestic

business?


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Characteristics of Exporters

• Although the largest companies are the biggest exporters, small companies are also expanding their export capability.

• Firm characteristics moderate its export intensity. Size plays a role, but often management commitment, efficiency, and cost structure matter more.


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Two Views of Export Development

Two views of export shape interpretation:

The slow, sequential dynamic of incremental

internationalization and the instant

internationalization of the born global


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Phases ofExport Development


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Pitfalls of Exporting

• Adjusting Financial Management• Adjusting Customer Management• Adjusting for Information Technology• Additional Stumbling Blocks


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Designing an Export Strategy

1. Assess the company’s export potential by examining its opportunities and resources.

2. Obtain expert counseling on exporting.

3. Select a market or markets.

4. Formulate and implement an export strategy.


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Import Strategy

There are three types of importers:

• Those looking for any product around the world to import and sell.

• Those looking for foreign sourcing to get their products at the cheapest price.

• Those using foreign sourcing as part of their global supply chain.


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Advantages of Importing

• Specialization of Labor

• Global Rivalry

• Local Unavailability

• Diversification of Operating Risks


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Import Brokers

• Key Broker Functions:– Valuing products in such a way that they qualify

for more favorable duty treatment– Qualifying for duty refunds through drawback

provisions– Deferring duties by using bonded warehouses and

foreign trade zones– Document and paper-flow management– Limiting liability by properly marking an import’s

country of origin


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Customs Agencies

• Procedural Assistance

• Efficiency Improvement


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Future: The Technology of Trade

• Advances in transportation and communication increases trade

• Collaborative software allows smaller companies to engage in international trade more efficiently

• 3rd Party Logistics


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Import Documentation

• Bureaucratic Impediments– The efficiency of importing is challenged by

delays, documents, and fees.


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The Export Process

Principal types of exporting:• Direct—products sold to an independent

party outside of the exporter’s home country.

• Indirect exports—products sold to an intermediary in the domestic market, which then sells the goods in the export market.


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Indirect Selling

• Export Intermediaries– Export Management Companies: operate

on a contractual basis—usually as an agent of the exporter.

– Export Trading Companies: operate based on demand rather than supply. They identify suppliers who can fill orders in overseas markets.


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Direct Selling

• Direct selling involves sales representatives, distributors, or retailers.– Direct Selling to Foreign Retailers and End

Users– Direct Selling over the Internet


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Export Documentation

Key export documents are:• Pro forma invoice• Commercial invoice• Bill of lading• Consular invoice• Certificate of origin• Shipper’s export declaration• Export packing list


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Sources of Regulatory Assistance

In the United States, a number of institutions,

most notably the Department of Commerce

and its affiliates, help firms identify and

realize export and import opportunities.


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Freight Forwarders

A foreign freight forwarder is an export or import specialist dealing in the movement of goods from producer to consumer.

• Primary transportation modes include:– Surface freight (truck and rail), ocean

freight, and airfreight.– Intermodal transportation—the movement

across different modes from origin to destination.


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Counter-trade

This is an umbrella term for several sorts of

trade, such as barter or offset, in which the

seller accepts goods or services, rather than

currency or credit, in payment for its products.


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United States of America.

Copyright © 2011 Pearson Education 13-1 International Business Environments and Operations, 13/e Global Edition Part 5 Global Strategy, Structure, and.

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